10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2024

or

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

For the transition period from                  to                 

Commission File Number: 001-37758

MOLECULIN BIOTECH, INC.
(Exact name of registrant as specified in its charter)
Delaware	2834	47-4671997
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification Number)

5300 Memorial Drive, Suite 950
Houston, TX	77007
(Address of principal executive offices)	(Zip Code)

713-300-5160

(Registrant’s telephone number, including area code)

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 Registration S-T 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 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 ☐	Smaller reporting company ☒
Non-accelerated filer ☒	Emerging growth company ☐
Accelerated filer ☐

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 ☒

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

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MBRX	The NASDAQ Stock Market LLC

The registrant had 2,311,536 shares of common stock outstanding at May 1, 2024.

Moleculin Biotech, Inc.

Form 10-Q

Table of Contents

		Page
	PART I – FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	19
	PART II – OTHER INFORMATION	20
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered sales of Equity Securities and Uses of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	21
	Signatures	22

2

PART 1 FINANCIAL INFORMATION

Item 1. Financial Statements

Moleculin Biotech, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share data)

(Unaudited)

	March 31,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	16,824		$	23,550
Prepaid expenses and other current assets		2,133			2,723
Total current assets		18,957			26,273
Furniture and equipment, net		240			272
Intangible assets		11,148			11,148
Operating lease right-of-use asset		500			524
Total assets	$	30,845		$	38,217
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,104		$	2,498
Accrued expenses and other current liabilities		3,304			4,317
Total current liabilities		5,408			6,815
Operating lease liability - long-term, net of current portion		450			474
Warrant liability - long-term		3,400			4,855
Total liabilities		9,258			12,144
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 2,311,536 and 2,227,516 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		2			33
Additional paid-in capital		158,177			157,653
Accumulated other comprehensive income (loss)		(18	)		(9	)
Accumulated deficit		(136,574	)		(131,604	)
Total stockholders’ equity		21,587			26,073
Total liabilities and stockholders’ equity	$	30,845		$	38,217

See accompanying notes to condensed consolidated financial statements.

3

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Revenues	$	—		$	—
Operating expenses:
Research and development		4,252			5,687
General and administrative		2,393			2,637
Depreciation and amortization		32			30
Total operating expenses		6,677			8,354
Loss from operations		(6,677	)		(8,354	)
Other income:
Gain from change in fair value of warrant liability		1,455			39
Other income, net		11			8
Interest income, net		241			392
Net loss	$	(4,970	)	$	(7,915	)
Net loss per common share - basic and diluted	$	(2.02	)	$	(4.13	)
Weighted average common shares outstanding, basic and diluted		2,466,174			1,916,665
Net Loss	$	(4,970	)	$	(7,915	)
Other comprehensive loss:
Foreign currency translation		(9	)		(4	)
Comprehensive loss	$	(4,979	)	$	(7,919	)

See accompanying notes to condensed consolidated financial statements.

4

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(4,970	)	$	(7,915	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		32			30
Stock-based compensation		493			499
License rights expense settled in stock		—			772
Change in fair value of warrant liability		(1,455	)		(39	)
Operating lease, net		108			110
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		590			427
Accounts payable		(394	)		(156	)
Accrued expenses and other current liabilities		(1,121	)		255
Net cash used in operating activities		(6,717	)		(6,017	)
Cash flows from financing activities:
Proceeds from sale of common stock, net of issuance costs		—			141
Net cash provided by financing activities		—			141
Effect of exchange rate changes on cash and cash equivalents		(9	)		(4	)
Net decrease in cash and cash equivalents		(6,726	)		(5,880	)
Cash and cash equivalents, - beginning of period		23,550			43,145
Cash and cash equivalents, - end of period	$	16,824		$	37,265

See accompanying notes to condensed consolidated financial statements.

5

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except for shares)

(Unaudited)

	Three Months Ended March 31, 2024
	Common Stock										Accumulated
	Shares		Par Value Amount			Additional Paid-In Capital		Accumulated Deficit			Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance, December 31, 2023		2,227,516	$	33		$	157,653	$	(131,604	)	$	(9	)	$	26,073
Issuance of common stock in connection with Consulting Agreements		6,834		—			37		—			—			37
Reverse stock split		77,186		(31	)		31		—			—			—
Stock-based compensation		—		—			456		—			—			456
Net loss		—		—			—		(4,970	)		—			(4,970	)
Cumulative translation adjustment		—		—			—		—			(9	)		(9	)
Balance, March 31, 2024		2,311,536	$	2		$	158,177	$	(136,574	)	$	(18	)	$	21,587

	Three Months Ended March 31, 2023
	Common Stock									Accumulated
	Shares		Par Value Amount		Additional Paid-In Capital		Accumulated Deficit			Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance, December 31, 2022		1,908,522	$	29	$	153,985	$	(101,835	)	$	12		$	52,191
Issuance of common stock with equity purchase agreement		10,026		—		141		—			—			141
Common stock issued for license rights		54,808		1		771		—			—			772
Stock-based compensation		—		—		499		—			—			499
Net loss		—		—		—		(7,915	)		—			(7,915	)
Cumulative translation adjustment		—		—		—		—			(4	)		(4	)
Balance, March 31, 2023		1,973,356	$	30	$	155,396	$	(109,750	)	$	8		$	45,684

See accompanying notes to condensed consolidated financial statements.

6

Moleculin Biotech, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business 

The terms “MBI” or “the Company”, “we”, “our” and “us” are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015, with clinical programs for hard-to-treat cancers and viruses. The Company has three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas. The Company has two wholly owned subsidiaries, Moleculin Australia Pty. Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe. The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials. The physician-sponsored trials utilize primarily external funds, such as grant funds, which are not presented in these financial statements. The Company does not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, the Company does not have a sales organization. The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.

In 2019, the Company sublicensed its technologies to Animal Life Sciences, Inc. (ALI), to enable research and commercialization for non-human use and share development data. As part of this agreement, ALI issued to the Company a 10% equity interest in ALI. 

On May 5, 2023, the Company received a letter from the Nasdaq Capital Market (Nasdaq) notifying the Company that for the prior 30 consecutive business days the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (Bid Price Rule). The deficiency letter did not result in the immediate delisting of the Company's common stock from the Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days, until  November 1, 2023, to regain compliance with the Bid Price Rule. On November 2, 2023, the Company received a 180-calendar day extension, until  April 29, 2024, from the Nasdaq to regain compliance with Bid Price Rule. On March 5, 2024, the Board of Directors approved a reverse 1-for-15 reverse stock split effective 11:59 P.M. (Eastern time) on March 21, 2024, with trading to commence on a split-adjusted basis on March 22, 2024. On April 8, 2024, the Company received a letter from Nasdaq notifying the Company that it had regained compliance with Bid Price Rule 5550(a)(2) as a result of the closing bid price of the Company's common stock being at $1.00 per share or greater for the 10 consecutive business days from March 22, 2024 through April 5, 2024. Accordingly, the Company is in compliance with the Bid Price Rule and Nasdaq considers the matter closed.

2. Basis of presentation, principles of consolidation, and significant accounting policies and liquidity 

Reverse Stock Split - On March 22, 2024, the Company completed a reverse stock split of all the issued and outstanding shares of the Company's common stock at a ratio of 1 to 15. The accompanying consolidated financial statements and notes to the consolidated financial statements gives retroactive effect to the reverse stock split for all periods presented. Certain amounts previously reported include rounding up of fractional shares as a result of the reverse stock split.

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of  December 31, 2023 and for the year then ended, including the notes thereto contained in the Form 10-K filed with the SEC on March 22, 2024.

Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S.

7

 

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to the significant accounting policies during the three months ended March 31, 2024.

Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. 

Going Concern and Liquidity - These condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. As of  March 31, 2024, the Company had an accumulated deficit of $136.6 million since inception and had not yet generated any revenues from operations. Additionally, management anticipates that its cash on hand of $16.8 million as of March 31, 2024 is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company intends to seek additional funding through one or more of the following: a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. There can be no assurance that such events or a combination thereof can be achieved.

 In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended  March 31, 2024 and 2023, the Company expensed approximately $0.1 million and $0.5 million, respectively, in related general and administrative fees and expenses. The Company is in the process of filing a claim with its insurance carriers related to this loss which may cover a portion of the related expenses but not all. The claim is currently under review by the insurance company. The claim has not yet been approved nor has a reimbursement amount been determined which, if any, would be limited by the applicable retention as defined under the policy. Accordingly, the Company has not recorded any provision for insurance reimbursement. The Company expects to record the insurance reimbursement at the time that the amount to be reimbursed is determined and approved by the insurance carrier. Any insurance reimbursement receivable will be recorded at an amount not to exceed the recorded loss and only if the terms of the legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible, or if recovery of the loss is probable.

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. 

Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

8

 

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 4.

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2024 and December 31, 2023 (table in thousands): 

Description	Fair Value		Level 1		Level 2		Level 3
Fair value of warrant liability as of March 31, 2024:	$	3,400	$	—	$	—	$	3,400
Fair value of warrant liability as of December 31, 2023:	$	4,855	$	—	$	—	$	4,855

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. 

Three Months Ended March 31, 2024	Warrant Liability Long-Term
Balance, December 31, 2023	$	4,855
Change in fair value - net		(1,455	)
Balance, March 31, 2024	$	3,400

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the three months ended March 31, 2024 and 2023, approximately 1.7 million and 0.4 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 8 - Subsequent Events. 

Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 

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3. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following components (in thousands):

	March 31, 2024		December 31, 2023
Accrued research and development	$	1,565	$	2,845
Accrued payroll and bonuses		1,092		765
Accrued legal, regulatory, professional and other		477		547
Operating lease liability - current		109		100
Accrued liabilities due to related party		61		60
Total accrued expenses and other current liabilities	$	3,304	$	4,317

Additionally, accounts payable includes $74,000 and $67,000 as of March 31, 2024 and December 31, 2023, respectively, for related party payables.

4. Warrants

Liability Classified Warrants

The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Only the volatility of the Company's own stock is used in the Black-Scholes option pricing model. 

The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2% to 5.5%	3.8% to 5.4%
Volatility	88.1% to 108.7%	79.5% to 108.7%
Expected life (years)	0.1 to 4.7	0.3 to 5.0
Dividend yield	—%	—%

A summary of the Company's liability classified warrant activity during the three months ended March 31, 2024 and related information follows: 

	Number of Shares			Range of Warrant Exercise				Weighted Average		Weighted Average Remaining Contractual
	Under Warrant			Price per Share				Exercise Price		Life (Years)
Balance at January 1, 2024		1,082,895		$	9.60	$	157.50	$	24.32		5.1
Expired warrants		(17,573	)	$	99.00	$	99.00	$	99.00		—
Balance at March 31, 2024		1,065,322		$	9.60	$	157.50	$	23.09		4.4
Exercisable at March 31, 2024		1,065,322		$	9.60	$	157.50	$	23.09		4.4

For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2024, see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.

Equity Classified Warrants

In March 2024, the Company granted equity-classified warrants to purchase up to 3,334 shares of Company common stock with a ten-year term and an exercise price of $9.15. The warrants vest annually over four years while services are being performed.

At March 31, 2024, the Company had 292,611 equity classified warrants outstanding and 266,591 warrants were exercisable. At  December 31, 2023, the Company had 289,276 equity classified warrants outstanding and 266,350 warrants were exercisable.

10

 

The Company recorded stock compensation expense for the non-employee consulting agreements of $34,000 and $46,000 for the three months ended  March 31, 2024 and 2023, respectively. At  March 31, 2024, there was $344,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

5. Equity 

Lincoln Park Equity Line

The Company did not utilize the 2021 Lincoln Park purchase agreement during the three months ended March 31, 2024. The 2021 Lincoln Park Agreement, which has $19.8 million available as of March 31, 2024, terminates on July 1, 2024. The Company is in discussions with Lincoln Park Capital to effect the extension of this agreement. The Company intends to seek an extension of this agreement prior to termination, however no agreement has been reached as of the date these unaudited consolidated financial statements were issued. In the  December 2023 Offering, the Company agreed not to utilize the Lincoln Park Agreement or any such extension thereof, until after  June 26, 2024.

Other Components of Equity 

In March 2024, the Company issued 6,834 shares of common stock to consultants in exchange for services to be provided. 

Stock-Based Compensation and Outstanding Awards

The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants. In May 2023 and 2022, the 2015 Stock Plan (the Plan) was amended to authorize an additional 116,667 shares and 133,334 shares, respectively, such that 366,667 total shares may be issued under the Plan. As of March 31, 2024, there were 2,053 shares remaining to be issued under the 2015 Stock Plan. 

Stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively, is as follows (table in thousands): 

	Three Months Ended March 31,
	2024		2023
General and administrative	$	381	$	369
Research and development		112		130
Total stock-based compensation expense	$	493	$	499

On May 8, 2024 the Company issued 1,000 options to purchase the company stock under the 2015 Stock Plan each to two Science Advisory Board members.

6. Income Taxes  

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2024 as a result of the losses recorded during the three months ended March 31, 2024 and the additional losses expected for the remainder of 2024 and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As a result, as of March 31, 2024 and  December 31, 2023 the Company maintained a full valuation allowance for all deferred tax assets.

The Company recorded no income tax provision for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 is nil. The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section 162(m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

11

 

7. Commitments and Contingencies

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2024.

Lease Obligations Payable

The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2024 and 2023, respectively (table in thousands):

	Three Months Ended March 31,
	2024		2023
Lease cost:
Operating lease cost	$	38	$	33
Variable lease cost		2		7
Total	$	40	$	40

In September 2023, the Company executed an amendment to extend the corporate office lease until August 31, 2029, with an option to renew. The Company is required to remit base monthly rent of approximately $4,700 which will increase at an average approximate rate of 2% each year. The Company is also required to pay additional rent in the form of its pro-rata share of certain specified operating expenses of the building. 

In June 2022, the Company extended the lab lease until September 30, 2027, with no further right or option to renew. The Company recorded approximately $12,000 in sublease income from a related party for the three months ended March 31, 2024 and 2023, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases was $29,000 and $38,000 for the three months ended  March 31, 2024 and 2023, respectively.

Licenses 

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson were $54,000 and $64,000 for the three months ended March 31, 2024 and 2023, respectively.

HPI - The Company has two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI) with total expenses of $59,000 for each of the three months ended March 31, 2024 and 2023, respectively.

Sponsored Research Agreements - The expenses recognized under the agreements were $156,000 and $155,000 for the three months ended March 31, 2024 and 2023, respectively.

8. Subsequent Events

In addition to the subsequent events discussed elsewhere in these notes, no other subsequent events were noted as occurring after March 31, 2024.

12

 

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

This Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements.

Forward-looking statements include, but are not limited to, statements about: 

• Our ability to continue our relationship with MD Anderson, including, but not limited to, our ability to maintain current licenses and license future intellectual property resulting from our sponsored research agreements with MD Anderson;

• The success or the lack thereof, including the ability to recruit subjects on a timely basis, for a variety of reasons, of our clinical trials through all phases of clinical development;

• Our ability to satisfy any requirements imposed by the US Food & Drug Administration (FDA) (or its foreign equivalents) as a condition of our clinical trials proceeding or beginning as planned;

• World-wide events including the wars in Ukraine and in Israel, the COVID-19 pandemic, and the general supply chain shortages effects on our clinical trials, clinical drug candidate supplies, preclinical activities and our ability to raise future financing;

• Our ability to obtain additional funding to commence or continue our clinical trials, fund operations and develop our product candidates;

• The need to obtain and retain regulatory approval of our drug candidates, both in the United States and in Europe, and in countries deemed necessary for future trials;

• Our ability to complete our clinical trials in a timely fashion and within our expected budget and resources;

• Our ability to source our drug products at reasonable prices;

• Compliance with obligations under intellectual property licenses with third parties;

• Any delays in regulatory review and approval of drug candidates in clinical development;

• Potential efficacy of our drug candidates;

• Our ability to commercialize our drug candidates;

• Market acceptance of our drug candidates;

• Competition from existing therapies or new therapies that may emerge;

• Potential product liability claims;

• Our dependency on third-party manufacturers to successfully, and timely, supply or manufacture our drug candidates for our preclinical work and our clinical trials;

• Our ability to establish or maintain collaborations, licensing or other arrangements;

• Our ability and third parties’ abilities to protect intellectual property rights;

• Our ability to adequately support future growth; and

• Our ability to attract and retain key personnel to manage our business effectively.

We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

Our Business

We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses. We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from the University of Texas MD Anderson Cancer Center (MD Anderson) in Houston, Texas. Three of our six drug candidates have shown human activity in clinical trials and are currently or have been in Phase 1B/2 or Phase 2 clinical trials. Since our inception and as of March 2024, our drugs have completed, are currently in, or have been permitted to proceed in, thirteen clinical trials. Annamycin is our lead molecule and is in three Phase 1B/2 clinical trials - one for treating Acute Myeloid Leukemia (AML) and two for treating Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases, STS lung mets, or Advanced STS).

One of our core management beliefs is that anthracyclines represent the most important treatment for AML and Advanced STS, and we believe Annamycin may, for the first time ever, allow a majority of these patients to benefit from this treatment. This belief leads us to currently focus mainly on the development of Annamycin.

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Our Core Technologies

Our core technologies consist of the following programs:

a) Annamycin or L-Annamycin is a “next generation” anthracycline (one of the most widely used classes of chemotherapy), designed to be different than currently approved anthracyclines, which are limited in utility because of cardiotoxicity risks and their susceptibility to multidrug resistance mechanisms. Annamycin was designed to avoid multidrug resistance and to be non-cardiotoxic and has shown no cardiotoxicity in subjects treated in clinical trials to date. Furthermore, we have demonstrated safe dosing beyond the dose limitations imposed by regulatory authorities upon currently prescribed anthracyclines due to their inherent cardiotoxicity. As of March 2024, Annamycin demonstrated efficacy in two of its Phase 1B/2 trials in subjects with AML and Advanced STS. We believe that Annamycin has potential to fill an unmet need as a second line therapy (2nd line or 2L) in AML and potentially as first line therapy in Advanced STS.

As part of our Annamycin clinical trials, we have engaged an independent expert to assess cardiotoxicity associated with chemotherapy at the Cleveland Clinic (Expert or Independent Expert). The data made available to the Expert includes left ventricular ejection fraction (LVEF) as determined by echocardiograms, and ECHO strain imaging, as well as Troponin levels (a biochemical marker of acute heart damage). “ECHO strain imaging” is a method in echocardiography (medical ultrasound) for measuring regional or global deformation (contraction or beating) of the myocardium (heart muscle). By strain rate imaging, the simultaneous function of different regions can be displayed and measured. Cardiac health biomarkers such as blood Troponin levels are considered an indicator of potential long-term heart damage. The Expert has issued and will continue to issue periodic reports as additional data are provided to him in batches of subject data. Such data include some data which are preliminary and subject to change. In our discussions regarding the lack of Annamycin's cardiotoxicity, we rely on the Expert's assessment.

Annamycin benefits from a promising advancement in lipid enabled drug delivery developed in collaboration with and exclusively licensed from MD Anderson. The unique patented lipid composition allows us to combine a new concept in chemotherapeutic agents within a lipid structure that helps target the delivery of the payload and reduce the potential for toxicity. In the case of Annamycin, our unique use of lipid technology enables improved tissue/organ distribution, and as demonstrated in multiple clinical trials, dramatically reduced toxicity, including cardiotoxicity.

b) Our WP1066 Portfolio includes WP1066, WP1193 and WP1220, three of several Immune/Transcription Modulators in the portfolio designed to inhibit p-STAT3 (phosphorylated signal transducer and activator of transcription) among other transcription factors associated with tumor activity. These also stimulate a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs). WP1066, in oral formulation, has been in two clinical trials, including compassionate use cases. WP1066 and WP1193 are being tested in preclinical programs in intravenous (IV) formulations. WP1066 and WP1220 have been in clinical trials in a topical formulation. WP1066 and WP1220 have both independently successfully completed Phase 1 clinical trials and have demonstrated efficacy.

c) Our WP1122 Portfolio contains compounds (including WP1122, WP1096, and WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG). We believe such compounds may provide an opportunity to cut off the energy supply of tumors by taking advantage of their high degree of dependence on glucose in comparison to healthy cells, as well as viruses that also depend upon glycolysis and glycosylation to infect and replicate. WP1122 has completed a Phase 1 clinical study, successfully establishing a Recommended Phase 2 Dose or RP2D.

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Recent Business Developments 

Below are recent business developments.

Annamycin 

Clinical Trial for the Treatment of AML in Combination with Cytarabine (MB-106)

Table 1

Study MB-106 Combination Therapy – Phase 1B/2 with Ara-C + Annamycin "5+3"	All Lines (Range 1-7)	1st Line	2nd Line
All Subjects
Recruited and Evaluable	20	3	10
Subjects Evaluable Not Dosed Per Protocol	2	0	1
Median Age - Years (Range)	69 (19 - 78)	49 (19 - 69)	71 (53 - 78)
Complete Remissions (CR)	8	2	5
CR with incomplete recovery (CRi)	1	0	1
Total Composite Complete Remission (CRc)	9	2	6
Complete Remission (CR) Rate	40%	67%	50%
Complete Remission Composite (CRc) Rate	45%	67%	60%
Partial Remission (PRs)	2	0	1
Overall Response Rate (CRc's + PRs) or ORR	55%	67%	70%
CRc Relapsed or Death To Date	2	0	2
BMT to Date (in CR's)	2	0	1
See Note 1 below

Note 1 for Table 1: Data from MB-106 is for Intent To Treat (ITT) subjects and is preliminary and subject to change. Median Durability of CRc is 4.9 months and climbing.

On May 7, 2024, our management held a Key Opinion Leader conference call with Dr. Martin Tallman and Dr. Michael Andreeff. Management made a presentation of the data above and discussion ensued with Drs Tallman and Andreeff on the significance of this data. Both Drs. Tallman and Andreeff are members of our Science Advisory Board.

The call included a discussion of the results to date for MB-106. We believe that the Phase 1B/2 trial has been successful in establishing safety and efficacy of Annamycin in combination with Cytarabine (AnnAraC) for the treatment of AML, and in providing sufficient data to support a Phase 2 registration-directed clinical trial (MB-108) to further provide data for efficacy which we intend to use to support an eventual application for New Drug Approval (NDA).

Preliminary Safety, Efficacy and Durability Data

The preliminary data for MB-106 demonstrate a CRc rate of 45% and an ORR of 55% for all subjects, regardless of the number of prior treatments (N=20). Segmenting the MB-106 subject population for 1^st line (N=3) and, most notably, 2^nd line (N=10) therapies in the trial, yields a CRc rate of 67% and 60% and an ORR of 67% and 70%, both respectively. We believe the CR and CRc rates demonstrated by AnnAraC in 2^nd line patients substantially exceeds the performance reported by any drug currently approved for use in 2^nd line AML.

Median durability of remission (DoR) for the 9 CRcs is approximately 4.9 months and developing with one death (related to pneumonia) and one relapse to date out of the ten CRcs. The first subject with a CRc (and who has yet to relapse) was treated in February 2023. The DoR is being measured from the initiation of treatment to relapse or death.

Cardiovascular safety of Annamycin is thoroughly monitored as independent assessments are made by an independent expert cardio-oncologist from Cleveland Clinic. As of April 1, 2024, data from 84 subjects across five trials (AML & STS, internal and externally funded trials) have been reviewed. Of note, most of these subjects have received greater than the lifetime cumulative anthracycline dose above 550 mg/m2 associated with increased risk of cardiomyopathy. Some subjects have received four times this amount following Annamycin administration(s). No signal of cardiotoxicity has been identified.

15

U.S Patents for Annamycin 

On April 9, 2024, the United States Patent and Trademark Office (USPTO) issued U.S. Patent number 11,951,118 titled, “Preparation of Preliposomal Annamycin Lyophilizate” (the ‘118 patent’) to Moleculin and The University of Texas System Board of Regents. On April xx, 2024, we received an Issue Notification from the USPTO for an additional patent (U.S. Patent number 11,980,634) titled “Method of Reconstituting Liposomal Annamycin” (the ‘634 patent’) to be issued on May 14, 2024.

The ‘118 patent provides claims to compositions that contain Annamycin, and the ‘634 patent, when issued, will provide claims to liposomal Annamycin suspension compositions, both with a base patent term extending until June 2040, subject to extension to account for time required to fulfill regulatory requirements for FDA approval. Moleculin’s novel candidate for the treatment of acute myeloid leukemia (AML) and soft tissue sarcoma lung metastases (STS lung mets) uses a unique lipid-based delivery technology. In addition to the issued ‘118 and expected ‘634 U.S. patents, we have additional patent applications pending in major jurisdictions worldwide. 

EMA issues ODD to Annamycin for the treatment of AML

We announced that the European Medicines Agency (EMA) has granted Orphan Drug Designation (ODD) to Annamycin for the treatment of AML. Combined with the Orphan Drug Designation we have in the US and with the new composition of matter and formulation patents just awarded by the US Patent and Trademark Office with coverage through 2040, we believe the commercial exclusivity of Annamycin is now well protected.

The EMA grants orphan drug designation to drugs and biologics intended for the treatment, diagnosis or prevention of rare, life-threatening or chronically debilitating diseases or conditions that affect fewer than five in 10,000 people in the European Union. Orphan designation potentially allows companies certain benefits, including reduced regulatory fees, clinical protocol assistance, research grants and up to 10 years of potential market exclusivity in the European Union if approved. 

AACR Presentation of Data Demonstrating High Anti-Cancer Activity of Annamycin and Non-Cardiotoxic Properties

Preclinical data regarding the Company’s next-generation anthracycline, Annamycin, was presented at the American Association for Cancer Research (AACR) Annual Meeting, which took place April 5-10, 2024 in San Diego, CA. The poster titled, Non-cardiotoxic Properties of Annamycin, a Clinically Evaluated Anthracycline and Potent Topoisomerase 2β Poison, was presented in the “Late-Breaking Research: Experimental and Molecular Therapeutics 2” session held on Monday, April 8^th. The presented poster outlined results from the assessment and comparison of the potency of doxorubicin (a commonly prescribed anthracycline) and Annamycin, Moleculin’s next-generation anthracycline, against topoisomerase II-alpha and II-beta and determine their impact on physiology of human cardiomyocytes demonstrating no pathologic changes in mice hearts following chronic in vivo exposure.

WP1066

We continue discussions with two US academic institutions and another foreign academic institution for externally funded trials for the use of WP1066 for the treatment of glioblastomas and/or pediatric brain tumors. Of note, we have finalized an agreement with Northwestern University (NU) and we expect NU to initiate an investigator initiated glioblastoma study in the near-term (Clinicaltrials.gov ID: NCT05879250). We do not expect the pediatric study to begin until an adult brain tumor trial commences and generates additional data.

Regarding an intravenous formula for WP1066, we believe that substantial progress has been made and we will be able to announce an IV formulation in the near term.

WP1122

With the data generated from the MB-301 clinical trial setting an RP2D for WP1122 and additional sponsored research, we continue to explore avenues of external funding for further development of this portfolio. For this study, we have submitted the final clinical study report in late October 2023.

16

Results of Operations

The following table sets forth, for the periods indicated, data derived from our statement of operations (table in thousands) and such changes in the periods are discussed below in approximate amounts:

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Revenues	$	—		$	—
Operating expenses:
Research and development		4,252			5,687
General and administrative		2,393			2,637
Depreciation and amortization		32			30
Total operating expenses		6,677			8,354
Loss from operations		(6,677	)		(8,354	)
Other income:
Gain from change in fair value of warrant liability		1,455			39
Other income, net		11			8
Interest income, net		241			392
Net loss	$	(4,970	)	$	(7,915	)

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Research and Development Expense. Research and development (R&D) expense was $4.3 million and $5.7 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $1.4 million is mainly related to the clinical trials activity levels.

General and Administrative Expense. General and administrative expense was $2.4 million and $2.6 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $0.2 million is mainly related to a decrease in regulatory and legal fees.

Gain from Change in Fair Value of Warrant Liability. We recorded a net gain of $1.5 million in the first quarter of 2024 as compared to a net gain of $0.04 million in the first quarter of 2023, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with certain of our previous stock offerings. We are required to revalue our liability-classified warrants at the time of each warrant exercise, if applicable, and at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of the warrant in the period in which the change occurred. We calculated the fair value of the warrants outstanding using the Black-Scholes model. A gain results principally from a decline in our share price during the period and a loss results principally from an increase in our share price.

Interest income, net. Interest income, net decreased by approximately $0.2 million for the comparable quarterly periods due to a decreasing cash balance during the past year.

17

Liquidity and Capital Resources

The following table sets forth our primary sources and uses of cash for the period indicated (table in thousands): 

	Three Months Ended March 31,
	2024			2023
Net cash used in operating activities	$	(6,717	)	$	(6,017	)
Net cash provided by financing activities		—			141
Effect of exchange rate changes on cash and cash equivalents		(9	)		(4	)
Net decrease in cash and cash equivalents	$	(6,726	)	$	(5,880	)

As of March 31, 2024, there was $0.4 million of cash on hand in a bank account in Australia and we know of no related limitations impacting our liquidity in Australia.

Cash used in operating activities

Cash used in operations was $6.7 million for the three months ended March 31, 2024. This $0.7 million increase over the prior year period of $6.0 million was primarily due to the timing of costs incurred and associated payments for drug production and clinical trial expenses. 

Cash provided by financing activities 

We did not sell any stock during the three months ended March 31, 2024. 

We believe that our existing cash and cash equivalents as of March 31, 2024 will be sufficient to fund our planned operations, which include our current Phase 1B/2 clinical programs and preparations for future clinical trials, into the fourth quarter of 2024, without the issuance of additional equity for cash. This takes into account cash outlays for preparations for clinical trials beyond the current active trials. The continuation of our Company as a going concern is dependent upon our ability to obtain necessary financing to continue operations and the attainment of profitable operations. We may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. We cannot provide assurance that such events or a combination thereof can be achieved. 

In March 2022, we received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are our officers or directors) and entities, and materials related to the development of and statements regarding our drug candidate for the treatment of COVID-19. We have received, and expect to continue to receive, periodic further requests from the SEC staff with respect to this matter. We are not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that we have made, we believe in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to us states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. We expensed approximately $0.1 million and $0.5 million in related general and administrative fees and expenses for the three months ended March 31, 2024 and 2023, respectively. 

Critical Accounting Policies and Significant Judgments and Estimates

There have been no material changes to our critical accounting policies and use of estimates from those disclosed in our Form 10-K for the year ended December 31, 2023. For a discussion of our critical accounting policies and use of estimates, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Estimates in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.

18

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable as we are a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that material information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that material information is accumulated and communicated to our management, including our Chief Executive Officer (CEO), who is our principal executive officer, and Chief Financial Officer (CFO), who is our principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosures. Our CEO and CFO have evaluated these disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q and have determined that such disclosure controls and procedures were effective as of March 31, 2024.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15-d-15(f) under the Exchange Act) during the three months ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

19

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

For information regarding factors that could affect our results of operations, financial condition and liquidity, refer to the section entitled “Risk Factors” in Part I, Item 1A in our annual report on Form 10-K for the year ended December 31, 2023. Except as updated below, there have been no material changes from the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2023, as filed with the SEC.

We must comply with indirect tax laws in multiple jurisdictions, as well as complex customs duty regimes worldwide. Audits of our compliance with these rules may result in additional liabilities for taxes, duties, interest and penalties related to our international operations which would reduce our profitability.

Our operations may be subject to audit by tax authorities in various countries. Many countries have indirect tax systems where the sale and purchase of goods and services are subject to tax based on the transaction value. These taxes are commonly referred to as value-added tax (“VAT”) or goods and services tax (“GST”). In addition, the distribution of our products subjects us to numerous complex customs regulations, which frequently change over time. Failure to comply with these systems and regulations can result in the assessment of additional taxes, duties, interest, and penalties. While we believe we are in compliance with local laws, we cannot assure that tax and customs authorities will agree with our reporting positions and upon audit such tax and customs authorities may assess additional taxes, duties, interest, and penalties against us. Adverse action by any government agencies related to indirect tax laws could materially and adversely affect our business, results of operations and financial condition.

Errors in our assumptions, estimates and judgments related to tax matters, including those resulting from regulatory reviews, could adversely affect our financial results.

We may be subject to routine tax audits on various tax matters around the world in the ordinary course of business (including income tax, business tax, customs duties, sales and use tax, and value added tax (“VAT”) matters). We regularly assess the adequacy of our uncertain income tax positions and other reserves, which requires a significant amount of judgment. Although we may accrue for uncertain income tax positions and other regulatory audits, negotiations with taxing and customs authorities may lead to adjustments in excess of our accruals, resulting in liabilities for additional taxes, duties, penalties and interest.

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

During the three months ended March 31, 2024, the Company issued warrants to purchase 3,334 shares of common stock with an exercise price of $9.15 per share to an entity providing consulting services, which warrants will vest annually over four years while services are being performed. The foregoing securities were issued pursuant to Section 4(a)(2) of the Securities Act.

During the three months ended March 31, 2024, the Company issued 6,834 shares of common stock to consultants in exchange for services to be provided. The foregoing securities were issued pursuant to Section 4(a)(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION. 

During the period covered by this Quarterly Report, none of the Company’s directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).

20

 

ITEM 6. EXHIBITS 

Exhibit No.	Description
3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Moleculin Biotech, Inc., filed with the Secretary of State of the State of Delaware (incorporated by reference to exhibit 3.1 of the Form 8-K filed March 19, 2024)
10.1	Amendment and Restated Employment Agreement between Moleculin Biotech, Inc. and Walter V. Klemp dated January 4, 2024 (incorporated by reference to exhibit 10.1 of the Form 8-K filed January 5, 2024)
10.2	Amendment and Restated Employment Agreement between Moleculin Biotech, Inc. and Jonathan P. Foster dated January 4, 2024 (incorporated by reference to exhibit 10.2 of the Form 8-K filed January 5, 2024)
10.3	Employment Agreement between Moleculin Biotech, Inc. and Donald Picker dated January 4, 2024 (incorporated by reference to exhibit 10.3 of the Form 8-K filed January 5, 2024)
31.1*	Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1*+	Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*+	Certification of Principal Accounting and Financial Officer Pursuant to Section 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 (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

+ The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MOLECULIN BIOTECH, INC.
Date: May 10, 2024	By:	/s/ Walter V. Klemp
		Walter V. Klemp,
		Chief Executive Officer and Chairman (Principal Executive Officer)
Date: May 10, 2024	By:	/s/ Jonathan P. Foster
		Jonathan P. Foster,
		Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)

22

EX-31.1

Exhibit 31.1

OFFICER’S CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walter V. Klemp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Moleculin Biotech, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

May 10, 2024

By: /s/ Walter V. Klemp

Walter V. Klemp

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

OFFICER’S CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jonathan P. Foster, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Moleculin Biotech, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

May 10, 2024

By: /s/ Jonathan P. Foster

Jonathan P. Foster

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

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 on Form 10-Q for the quarter ended March 31, 2024 of Moleculin Biotech, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Walter V. Klemp, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m or 78o(d)); and

• The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2024

By: /s/ Walter V. Klemp

Walter V. Klemp

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Moleculin Biotech, Inc. and will be retained by Moleculin Biotech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Moleculin Biotech, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan P. Foster, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m or 78o(d)); and

• The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2024

By: /s/ Jonathan P. Foster

Jonathan P. Foster

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to Moleculin Biotech, Inc. and will be retained by Moleculin Biotech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 01, 2024
Document Information [Line Items]
Entity Central Index Key	0001659617
Entity Registrant Name	Moleculin Biotech, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-37758
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-4671997
Entity Address, Address Line One	5300 Memorial Drive, Suite 950
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77007
City Area Code	713
Local Phone Number	300-5160
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	MBRX
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		2,311,536

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 16,824	$ 23,550
Prepaid expenses and other current assets	2,133	2,723
Total current assets	18,957	26,273
Furniture and equipment, net	240	272
Intangible assets	11,148	11,148
Operating lease right-of-use asset	500	524
Total assets	30,845	38,217
Liabilities, Current [Abstract]
Accounts payable	2,104	2,498
Accrued expenses and other current liabilities	3,304	4,317
Total current liabilities	5,408	6,815
Operating lease liability - long-term, net of current portion	450	474
Warrant liability - long-term	3,400	4,855
Total liabilities	9,258	12,144
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding	0	0
Common stock, $0.001 par value; 100,000,000 shares authorized; 2,311,536 and 2,227,516 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	2	33
Additional paid-in capital	158,177	157,653
Accumulated other comprehensive income (loss)	(18)	(9)
Accumulated deficit	(136,574)	(131,604)
Total stockholders’ equity	21,587	26,073
Total liabilities and stockholders’ equity	$ 30,845	$ 38,217

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par or stated value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	2,311,536	2,227,516
Common stock, shares outstanding (in shares)	2,311,536	2,227,516

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenues	$ 0	$ 0
Operating expenses:
Research and development	4,252	5,687
General and administrative	2,393	2,637
Depreciation and amortization	32	30
Total operating expenses	6,677	8,354
Loss from operations	(6,677)	(8,354)
Other income:
Gain from change in fair value of warrant liability	1,455	39
Other income, net	11	8
Interest income, net	241	392
Net loss	$ (4,970)	$ (7,915)
Net loss per common share - basic and diluted (in dollars per share)	$ (2.02)	$ (4.13)
Weighted average common shares outstanding, basic and diluted (in shares)	2,466,174	1,916,665
Net loss	$ (4,970)	$ (7,915)
Other comprehensive loss:
Foreign currency translation	(9)	(4)
Comprehensive loss	$ (4,979)	$ (7,919)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (4,970)	$ (7,915)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	32	30
Stock-based compensation	493	499
License rights expense settled in stock	0	772
Change in fair value of warrant liability	(1,455)	(39)
Operating lease, net	108	110
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	590	427
Accounts payable	(394)	(156)
Accrued expenses and other current liabilities	(1,121)	255
Net cash used in operating activities	(6,717)	(6,017)
Cash flows from financing activities:
Proceeds from sale of common stock, net of issuance costs	0	141
Net cash provided by financing activities	0	141
Effect of exchange rate changes on cash and cash equivalents	(9)	(4)
Net decrease in cash and cash equivalents	(6,726)	(5,880)
Cash and cash equivalents, - beginning of period	23,550	43,145
Cash and cash equivalents, - end of period	$ 16,824	$ 37,265

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2022	1,908,522
Balance at Dec. 31, 2022	$ 29	$ 153,985	$ (101,835)	$ 12	$ 52,191
Issuance of common stock in connection with Consulting Agreements (in shares)	10,026
Issuance of common stock in connection with Consulting Agreements	$ 0	141	0	0	141
Stock-based compensation	0	499	0	0	499
Net loss	0	0	(7,915)	0	(7,915)
Cumulative translation adjustment	$ 0	0	0	(4)	(4)
Common stock issued for license rights (in shares)	54,808
Common stock issued for license rights	$ 1	771	0	0	772
Balance (in shares) at Mar. 31, 2023	1,973,356
Balance at Mar. 31, 2023	$ 30	155,396	(109,750)	8	45,684
Balance (in shares) at Dec. 31, 2023	2,227,516
Balance at Dec. 31, 2023	$ 33	157,653	(131,604)	(9)	26,073
Issuance of common stock in connection with Consulting Agreements (in shares)	6,834
Issuance of common stock in connection with Consulting Agreements	$ 0	37	0	0	37
Reverse stock split (in shares)	77,186
Reverse stock split	$ (31)	31	0	0	0
Stock-based compensation	0	456	0	0	456
Net loss	0	0	(4,970)	0	(4,970)
Cumulative translation adjustment	$ 0	0	0	(9)	(9)
Balance (in shares) at Mar. 31, 2024	2,311,536
Balance at Mar. 31, 2024	$ 2	$ 158,177	$ (136,574)	$ (18)	$ 21,587

XML

Note 1 - Nature of Business

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Nature of Operations [Text Block]

1. Nature of Business 

The terms “MBI” or “the Company”, “we”, “our” and “us” are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015, with clinical programs for hard-to-treat cancers and viruses. The Company has three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas. The Company has two wholly owned subsidiaries, Moleculin Australia Pty. Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe. The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials. The physician-sponsored trials utilize primarily external funds, such as grant funds, which are not presented in these financial statements. The Company does not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, the Company does not have a sales organization. The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.

In 2019, the Company sublicensed its technologies to Animal Life Sciences, Inc. (ALI), to enable research and commercialization for non-human use and share development data. As part of this agreement, ALI issued to the Company a 10% equity interest in ALI. 

On May 5, 2023, the Company received a letter from the Nasdaq Capital Market (Nasdaq) notifying the Company that for the prior 30 consecutive business days the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (Bid Price Rule). The deficiency letter did not result in the immediate delisting of the Company's common stock from the Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days, until  November 1, 2023, to regain compliance with the Bid Price Rule. On November 2, 2023, the Company received a 180-calendar day extension, until  April 29, 2024, from the Nasdaq to regain compliance with Bid Price Rule. On March 5, 2024, the Board of Directors approved a reverse 1-for-15 reverse stock split effective 11:59 P.M. (Eastern time) on March 21, 2024, with trading to commence on a split-adjusted basis on March 22, 2024. On April 8, 2024, the Company received a letter from Nasdaq notifying the Company that it had regained compliance with Bid Price Rule 5550(a)(2) as a result of the closing bid price of the Company's common stock being at $1.00 per share or greater for the 10 consecutive business days from March 22, 2024 through April 5, 2024. Accordingly, the Company is in compliance with the Bid Price Rule and Nasdaq considers the matter closed.

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Note 2 - Basis of Presentation, Principles of Consolidation, and Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. Basis of presentation, principles of consolidation, and significant accounting policies and liquidity 

Reverse Stock Split - On March 22, 2024, the Company completed a reverse stock split of all the issued and outstanding shares of the Company's common stock at a ratio of 1 to 15. The accompanying consolidated financial statements and notes to the consolidated financial statements gives retroactive effect to the reverse stock split for all periods presented. Certain amounts previously reported include rounding up of fractional shares as a result of the reverse stock split.

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of  December 31, 2023 and for the year then ended, including the notes thereto contained in the Form 10-K filed with the SEC on March 22, 2024.

Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S.

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to the significant accounting policies during the three months ended March 31, 2024.

Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. 

Going Concern and Liquidity - These condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. As of  March 31, 2024, the Company had an accumulated deficit of $136.6 million since inception and had not yet generated any revenues from operations. Additionally, management anticipates that its cash on hand of $16.8 million as of March 31, 2024 is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company intends to seek additional funding through one or more of the following: a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. There can be no assurance that such events or a combination thereof can be achieved.

 In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended  March 31, 2024 and 2023, the Company expensed approximately $0.1 million and $0.5 million, respectively, in related general and administrative fees and expenses. The Company is in the process of filing a claim with its insurance carriers related to this loss which may cover a portion of the related expenses but not all. The claim is currently under review by the insurance company. The claim has not yet been approved nor has a reimbursement amount been determined which, if any, would be limited by the applicable retention as defined under the policy. Accordingly, the Company has not recorded any provision for insurance reimbursement. The Company expects to record the insurance reimbursement at the time that the amount to be reimbursed is determined and approved by the insurance carrier. Any insurance reimbursement receivable will be recorded at an amount not to exceed the recorded loss and only if the terms of the legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible, or if recovery of the loss is probable.

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. 

Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 4.

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2024 and December 31, 2023 (table in thousands): 

Description	Fair Value		Level 1		Level 2		Level 3
Fair value of warrant liability as of March 31, 2024:	$	3,400	$	—	$	—	$	3,400
Fair value of warrant liability as of December 31, 2023:	$	4,855	$	—	$	—	$	4,855

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. 

Three Months Ended March 31, 2024	Warrant Liability Long-Term
Balance, December 31, 2023	$	4,855
Change in fair value - net		(1,455	)
Balance, March 31, 2024	$	3,400

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the three months ended March 31, 2024 and 2023, approximately 1.7 million and 0.4 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 8 - Subsequent Events. 

Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 

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Note 3 - Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

3. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following components (in thousands):

	March 31, 2024		December 31, 2023
Accrued research and development	$	1,565	$	2,845
Accrued payroll and bonuses		1,092		765
Accrued legal, regulatory, professional and other		477		547
Operating lease liability - current		109		100
Accrued liabilities due to related party		61		60
Total accrued expenses and other current liabilities	$	3,304	$	4,317

Additionally, accounts payable includes $74,000 and $67,000 as of March 31, 2024 and December 31, 2023, respectively, for related party payables.

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Note 4 - Warrants

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Warrants Disclosure [Text Block]

4. Warrants

Liability Classified Warrants

The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Only the volatility of the Company's own stock is used in the Black-Scholes option pricing model. 

The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2% to 5.5%	3.8% to 5.4%
Volatility	88.1% to 108.7%	79.5% to 108.7%
Expected life (years)	0.1 to 4.7	0.3 to 5.0
Dividend yield	—%	—%

A summary of the Company's liability classified warrant activity during the three months ended March 31, 2024 and related information follows: 

	Number of Shares			Range of Warrant Exercise				Weighted Average		Weighted Average Remaining Contractual
	Under Warrant			Price per Share				Exercise Price		Life (Years)
Balance at January 1, 2024		1,082,895		$	9.60	$	157.50	$	24.32		5.1
Expired warrants		(17,573	)	$	99.00	$	99.00	$	99.00		—
Balance at March 31, 2024		1,065,322		$	9.60	$	157.50	$	23.09		4.4
Exercisable at March 31, 2024		1,065,322		$	9.60	$	157.50	$	23.09		4.4

For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2024, see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.

Equity Classified Warrants

In March 2024, the Company granted equity-classified warrants to purchase up to 3,334 shares of Company common stock with a ten-year term and an exercise price of $9.15. The warrants vest annually over four years while services are being performed.

At March 31, 2024, the Company had 292,611 equity classified warrants outstanding and 266,591 warrants were exercisable. At  December 31, 2023, the Company had 289,276 equity classified warrants outstanding and 266,350 warrants were exercisable.

The Company recorded stock compensation expense for the non-employee consulting agreements of $34,000 and $46,000 for the three months ended  March 31, 2024 and 2023, respectively. At  March 31, 2024, there was $344,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

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Note 5 - Equity

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Equity [Text Block]

5. Equity 

Lincoln Park Equity Line

The Company did not utilize the 2021 Lincoln Park purchase agreement during the three months ended March 31, 2024. The 2021 Lincoln Park Agreement, which has $19.8 million available as of March 31, 2024, terminates on July 1, 2024. The Company is in discussions with Lincoln Park Capital to effect the extension of this agreement. The Company intends to seek an extension of this agreement prior to termination, however no agreement has been reached as of the date these unaudited consolidated financial statements were issued. In the  December 2023 Offering, the Company agreed not to utilize the Lincoln Park Agreement or any such extension thereof, until after  June 26, 2024.

Other Components of Equity 

In March 2024, the Company issued 6,834 shares of common stock to consultants in exchange for services to be provided. 

Stock-Based Compensation and Outstanding Awards

The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants. In May 2023 and 2022, the 2015 Stock Plan (the Plan) was amended to authorize an additional 116,667 shares and 133,334 shares, respectively, such that 366,667 total shares may be issued under the Plan. As of March 31, 2024, there were 2,053 shares remaining to be issued under the 2015 Stock Plan. 

Stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively, is as follows (table in thousands): 

	Three Months Ended March 31,
	2024		2023
General and administrative	$	381	$	369
Research and development		112		130
Total stock-based compensation expense	$	493	$	499

On May 8, 2024 the Company issued 1,000 options to purchase the company stock under the 2015 Stock Plan each to two Science Advisory Board members.

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Note 6 - Income Taxes

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

6. Income Taxes  

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2024 as a result of the losses recorded during the three months ended March 31, 2024 and the additional losses expected for the remainder of 2024 and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As a result, as of March 31, 2024 and  December 31, 2023 the Company maintained a full valuation allowance for all deferred tax assets.

The Company recorded no income tax provision for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 is nil. The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section 162(m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

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Note 7 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

7. Commitments and Contingencies

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2024.

Lease Obligations Payable

The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2024 and 2023, respectively (table in thousands):

	Three Months Ended March 31,
	2024		2023
Lease cost:
Operating lease cost	$	38	$	33
Variable lease cost		2		7
Total	$	40	$	40

In September 2023, the Company executed an amendment to extend the corporate office lease until August 31, 2029, with an option to renew. The Company is required to remit base monthly rent of approximately $4,700 which will increase at an average approximate rate of 2% each year. The Company is also required to pay additional rent in the form of its pro-rata share of certain specified operating expenses of the building. 

In June 2022, the Company extended the lab lease until September 30, 2027, with no further right or option to renew. The Company recorded approximately $12,000 in sublease income from a related party for the three months ended March 31, 2024 and 2023, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases was $29,000 and $38,000 for the three months ended  March 31, 2024 and 2023, respectively.

Licenses 

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson were $54,000 and $64,000 for the three months ended March 31, 2024 and 2023, respectively.

HPI - The Company has two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI) with total expenses of $59,000 for each of the three months ended March 31, 2024 and 2023, respectively.

Sponsored Research Agreements - The expenses recognized under the agreements were $156,000 and $155,000 for the three months ended March 31, 2024 and 2023, respectively.

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Note 8 - Subsequent Events

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Subsequent Events [Text Block]

8. Subsequent Events

In addition to the subsequent events discussed elsewhere in these notes, no other subsequent events were noted as occurring after March 31, 2024.

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Insider Trading Arrangements

3 Months Ended

Mar. 31, 2024

Insider Trading Arr Line Items

Material Terms of Trading Arrangement [Text Block]

ITEM 5. OTHER INFORMATION. 

During the period covered by this Quarterly Report, none of the Company’s directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).

Rule 10b5-1 Arrangement Adopted [Flag]

false

Non-Rule 10b5-1 Arrangement Adopted [Flag]

false

Rule 10b5-1 Arrangement Terminated [Flag]

false

Non-Rule 10b5-1 Arrangement Terminated [Flag]

false

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Reverse Stock Split [Policy Text Block]

Reverse Stock Split - On March 22, 2024, the Company completed a reverse stock split of all the issued and outstanding shares of the Company's common stock at a ratio of 1 to 15. The accompanying consolidated financial statements and notes to the consolidated financial statements gives retroactive effect to the reverse stock split for all periods presented. Certain amounts previously reported include rounding up of fractional shares as a result of the reverse stock split.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of  December 31, 2023 and for the year then ended, including the notes thereto contained in the Form 10-K filed with the SEC on March 22, 2024.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S.

Significant Accounting Policies [Policy Text Block]

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to the significant accounting policies during the three months ended March 31, 2024.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. 

Going Concern Policy [Policy Text Block]

Going Concern and Liquidity - These condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. As of  March 31, 2024, the Company had an accumulated deficit of $136.6 million since inception and had not yet generated any revenues from operations. Additionally, management anticipates that its cash on hand of $16.8 million as of March 31, 2024 is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company intends to seek additional funding through one or more of the following: a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. There can be no assurance that such events or a combination thereof can be achieved.

 In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended  March 31, 2024 and 2023, the Company expensed approximately $0.1 million and $0.5 million, respectively, in related general and administrative fees and expenses. The Company is in the process of filing a claim with its insurance carriers related to this loss which may cover a portion of the related expenses but not all. The claim is currently under review by the insurance company. The claim has not yet been approved nor has a reimbursement amount been determined which, if any, would be limited by the applicable retention as defined under the policy. Accordingly, the Company has not recorded any provision for insurance reimbursement. The Company expects to record the insurance reimbursement at the time that the amount to be reimbursed is determined and approved by the insurance carrier. Any insurance reimbursement receivable will be recorded at an amount not to exceed the recorded loss and only if the terms of the legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible, or if recovery of the loss is probable.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. 

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 4.

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2024 and December 31, 2023 (table in thousands): 

Description	Fair Value		Level 1		Level 2		Level 3
Fair value of warrant liability as of March 31, 2024:	$	3,400	$	—	$	—	$	3,400
Fair value of warrant liability as of December 31, 2023:	$	4,855	$	—	$	—	$	4,855

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. 

Three Months Ended March 31, 2024	Warrant Liability Long-Term
Balance, December 31, 2023	$	4,855
Change in fair value - net		(1,455	)
Balance, March 31, 2024	$	3,400

Earnings Per Share, Policy [Policy Text Block]

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the three months ended March 31, 2024 and 2023, approximately 1.7 million and 0.4 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 8 - Subsequent Events. 

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 

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Note 2 - Basis of Presentation, Principles of Consolidation, and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Notes Tables

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

Description	Fair Value		Level 1		Level 2		Level 3
Fair value of warrant liability as of March 31, 2024:	$	3,400	$	—	$	—	$	3,400
Fair value of warrant liability as of December 31, 2023:	$	4,855	$	—	$	—	$	4,855

Three Months Ended March 31, 2024	Warrant Liability Long-Term
Balance, December 31, 2023	$	4,855
Change in fair value - net		(1,455	)
Balance, March 31, 2024	$	3,400

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Note 3 - Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	March 31, 2024		December 31, 2023
Accrued research and development	$	1,565	$	2,845
Accrued payroll and bonuses		1,092		765
Accrued legal, regulatory, professional and other		477		547
Operating lease liability - current		109		100
Accrued liabilities due to related party		61		60
Total accrued expenses and other current liabilities	$	3,304	$	4,317

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Note 4 - Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Notes Tables

Schedule of Warrants or Rights, Assumptions Used [Table Text Block]

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2% to 5.5%	3.8% to 5.4%
Volatility	88.1% to 108.7%	79.5% to 108.7%
Expected life (years)	0.1 to 4.7	0.3 to 5.0
Dividend yield	—%	—%

Schedule of Warrant Activity [Table Text Block]

	Number of Shares			Range of Warrant Exercise				Weighted Average		Weighted Average Remaining Contractual
	Under Warrant			Price per Share				Exercise Price		Life (Years)
Balance at January 1, 2024		1,082,895		$	9.60	$	157.50	$	24.32		5.1
Expired warrants		(17,573	)	$	99.00	$	99.00	$	99.00		—
Balance at March 31, 2024		1,065,322		$	9.60	$	157.50	$	23.09		4.4
Exercisable at March 31, 2024		1,065,322		$	9.60	$	157.50	$	23.09		4.4

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Note 5 - Equity (Tables)

3 Months Ended

Mar. 31, 2024

Notes Tables

Share-based Payment Arrangement, Expensed, Amount [Table Text Block]

	Three Months Ended March 31,
	2024		2023
General and administrative	$	381	$	369
Research and development		112		130
Total stock-based compensation expense	$	493	$	499

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Note 7 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended March 31,
	2024		2023
Lease cost:
Operating lease cost	$	38	$	33
Variable lease cost		2		7
Total	$	40	$	40

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Note 1 - Nature of Business (Details Textual)			6 Months Ended
	Mar. 22, 2024	Mar. 21, 2024	Apr. 29, 2024	Mar. 31, 2024	May 05, 2023 $ / shares
Number of Core Drug Technologies				3
NASDAQ Compliance, Minimum Closing Bid Price Per Share (in dollars per share)					$ 1
NASDAQ Compliance, Extension Period (Day)			180 days
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	15	15
Animal Life Sciences, Inc [Member]
Equity Method Investment, Ownership Percentage				10.00%

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Note 2 - Basis of Presentation, Principles of Consolidation, and Significant Accounting Policies (Details Textual) $ in Thousands, shares in Millions			3 Months Ended		12 Months Ended
	Mar. 22, 2024	Mar. 21, 2024	Mar. 31, 2024 USD ($) shares	Mar. 31, 2023 USD ($) shares	Dec. 31, 2022	Dec. 31, 2023 USD ($)
Number of Operating Segments					1
Retained Earnings (Accumulated Deficit)			$ (136,574)			$ (131,604)
Cash			$ 16,800
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares			1.7	0.4
General and Administrative Expense [Member]
Legal Fees			$ 100	$ 500
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	15	15

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Note 2 - Basis of Presentation, Principles of Consolidation and Significant Accounting Policies - Schedule of Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Warrant Liability Long Term [Member]
Balance	$ 4,855
Change in fair value - net	(1,455)
Balance	3,400
Fair Value, Recurring [Member] | Warrant Liability [Member]
Fair value of warrant liability	3,400	$ 4,855
Fair Value, Recurring [Member] | Warrant Liability [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of warrant liability	0	0
Fair Value, Recurring [Member] | Warrant Liability [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of warrant liability	0	0
Fair Value, Recurring [Member] | Warrant Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of warrant liability	$ 3,400	$ 4,855

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Note 3 - Accrued Expenses and Other Current Liabilities (Details Textual) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Accounts Payable, Current	$ 2,104,000	$ 2,498,000
Related Party [Member]
Accounts Payable, Current	$ 74,000	$ 67,000

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Note 3 - Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued research and development	$ 1,565	$ 2,845
Accrued payroll and bonuses	1,092	765
Accrued legal, regulatory, professional and other	477	547
Operating lease liability - current	109	100
Accrued Liabilities, Current	3,304	4,317
Related Party [Member]
Accrued Liabilities, Current	$ 61	$ 60

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Note 3 - Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities (Details) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Liabilities, Current [Abstract]
Accrued Liabilities, Current	$ 3,304	$ 4,317
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities, Current

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Note 4 - Warrants (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Share-Based Payment Arrangement, Expense	$ 493,000	$ 499,000
Equity Classified Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	3,334
Warrants and Rights Outstanding, Term (Year)	10 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 9.15
Class of Warrant or Right, Outstanding (in shares)	292,611		289,276
Class of Warrant or Right, Vested and Exercisable (in shares)	266,591		266,350
Share-Based Payment Arrangement, Expense	$ 34,000	$ 46,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 344,000

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Note 4 - Warrants - Assumptions Used (Details)	Mar. 31, 2024	Dec. 31, 2023
Minimum [Member] | Measurement Input, Risk Free Interest Rate [Member]
Warrants, assumptions	0.042	0.038
Minimum [Member] | Measurement Input, Price Volatility [Member]
Warrants, assumptions	0.881	0.795
Minimum [Member] | Measurement Input, Expected Term [Member]
Warrants, assumptions	0.1	0.3
Maximum [Member] | Measurement Input, Risk Free Interest Rate [Member]
Warrants, assumptions	0.055	0.054
Maximum [Member] | Measurement Input, Price Volatility [Member]
Warrants, assumptions	1.087	1.087
Maximum [Member] | Measurement Input, Expected Term [Member]
Warrants, assumptions	4.7	5

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Note 4 - Warrants - Warrant Activity (Details) - Liability Classified Warrants [Member] - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Balance (in shares)	1,082,895
Balance, weighted average remaining contractual life (Year)	4 years 4 months 24 days	5 years 1 month 6 days
Expired warrants (in shares)	(17,573)
Balance (in shares)	1,065,322	1,082,895
Exercisable (in shares)	1,065,322
Exercisable, weighted average remaining contractual life (Year)	4 years 4 months 24 days
Minimum [Member]
Balance, warrant exercise price (in dollars per share)	$ 9.6
Expired warrants (in dollars per share)	99
Balance, warrant exercise price (in dollars per share)	9.6	$ 9.6
Exercisable, warrant exercise price (in dollars per share)	9.6
Maximum [Member]
Balance, warrant exercise price (in dollars per share)	157.5
Expired warrants (in dollars per share)	99
Balance, warrant exercise price (in dollars per share)	157.5	157.5
Exercisable, warrant exercise price (in dollars per share)	157.5
Weighted Average [Member]
Balance, warrant exercise price (in dollars per share)	24.32
Expired warrants (in dollars per share)	99
Balance, warrant exercise price (in dollars per share)	23.09	$ 24.32
Exercisable, warrant exercise price (in dollars per share)	$ 23.09

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Note 5 - Equity (Details Textual) - USD ($) $ in Millions				3 Months Ended
	May 08, 2024	May 31, 2023	May 31, 2022	Mar. 31, 2024	Dec. 31, 2023
Stock Issued During Period, Shares, Issued for Services (in shares)				6,834
The 2015 Stock Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized (in shares)		116,667	133,334
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)		366,667
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)				2,053
The 2015 Stock Plan [Member] | Subsequent Event [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures (in shares)	1,000
Lincoln Park Transaction [Member]
Purchase Agreement, Common Stock, Available Amount					$ 19.8

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Note 5 - Equity - Stock based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-Based Payment Arrangement, Expense	$ 493	$ 499
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expense	381	369
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expense	$ 112	$ 130

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Note 6 - Income Taxes (Details Textual) - USD ($) Pure in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax Expense (Benefit)	$ 0	$ 0
Effective Income Tax Rate Reconciliation, Percent	0.00%	0.00%

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Note 7 - Commitments and Contingencies (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2023	Mar. 31, 2024	Mar. 31, 2023
Operating Lease, Monthly Rent Payment	$ 4,700
Operating Lease, Rent Expense, Annual Increase In Rent, Percent	2.00%
Sublease Income		$ 12,000	$ 12,000
Operating Lease, Payments		29,000	38,000
License Agreements Expense		156,000	155,000
Houston Pharmaceuticals, Inc [Member]
Related Party Transaction, Amounts of Transaction		59,000	59,000
MD Anderson [Member]
License Agreements Expense		$ 54,000	$ 64,000

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Note 7 - Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating lease cost	$ 38	$ 33
Variable lease cost	2	7
Total	$ 40	$ 40