Xenetic Biosciences(XBIO) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenue for the three months ended June 30, 2024, was $726,404, an increase of 11.6$651,005 for the same period in 2023[7]. - Net loss for the three months ended June 30, 2024, was $1,273,970, compared to a net loss of$1,050,963 for the same period in 2023, representing a 21.2% increase in losses[7]. - The total operating costs and expenses for the three months ended June 30, 2024, were $2,063,800, an increase from$1,849,193 for the same period in 2023, reflecting an increase of 11.6%[7]. - For the six months ended June 30, 2024, royalty revenue decreased by 1.6% to $1,237,221 compared to$1,256,849 for the same period in 2023[64]. - Net loss for the six months ended June 30, 2024 was $2,469,083, a 29.4$1,907,517 in the prior year[64]. Research and Development - Research and development expenses for the six months ended June 30, 2024, were $1,878,092, up from$1,498,519 for the same period in 2023, indicating a 25.4% increase[7]. - Research and development expenses for the quarter ended June 30, 2024 were $933,771, a 3.4$903,243 in the prior year[56]. - The company has paid approximately $0.9 million to Scripps Research to fund research related to its DNase oncology platform technology, with an option to acquire exclusive licensing rights[27]. - The company has entered into a research funding agreement with the University of Virginia, paying approximately$0.2 million to advance its systemic DNase program[29]. - The company is focused on advancing its systemic DNase program as an adjunctive therapy for pancreatic carcinoma and metastatic solid tumors[53]. Assets and Liabilities - Total current assets decreased to $8,014,978 as of June 30, 2024, down from$9,586,874 as of December 31, 2023, reflecting a decline of 16.4%[6]. - Total liabilities increased to $1,587,602 as of June 30, 2024, compared to$809,585 as of December 31, 2023, marking a significant rise of 96%[6]. - Stockholders' equity decreased to $7,445,728 as of June 30, 2024, down from$9,795,641 as of December 31, 2023, representing a decline of 24%[6]. - Working capital decreased by approximately $2.3 million to approximately$6.4 million at June 30, 2024, down from approximately $8.8 million at December 31, 2023[71]. - The company had approximately$7.3 million in cash and approximately $1.6 million in current liabilities at June 30, 2024, down from approximately$9.0 million in cash and approximately $0.8 million in current liabilities at December 31, 2023[71]. Cash Flow and Financing - Cash flows used in operating activities totaled approximately$1.7 million for the six months ended June 30, 2024, compared to approximately $2.4 million for the same period in 2023[74]. - The company anticipates needing additional capital in the long term to pursue its business initiatives, highlighting potential future financing needs[16]. - The company expects to continue incurring operating losses in the near term but believes existing resources will fund operations for at least twelve months from the issuance of the financial statements[72]. - There were no cash flows from investing or financing activities for the six months ended June 30, 2024 and 2023[75][76]. - The company anticipates needing additional capital in the long term to pursue business initiatives, with potential access to capital resources through various means[72]. Collaborations and Agreements - The company has a collaboration with Volition to develop NETs-targeted adoptive cell therapies, with Volition funding$26,000 to date[25]. - The Company has entered into various research, development, license, and supply agreements with Serum Institute, Pharmsynthez, and SynBio, with no revenue recognized from these agreements during the three and six months ended June 30, 2024 and 2023[30]. Stock and Equity - The Company granted 20,000 stock options during the three months ended June 30, 2024, with no stock option awards granted during the same period in 2023[40]. - Total share-based expense related to stock options and RSUs was approximately $42,000 for the three months ended June 30, 2024, compared to$0.1 million for the same period in 2023[38]. - The Company had approximately 462,963 Series A Warrants outstanding as of June 30, 2024, with an exercise price of $33.00 per share[35]. Tax and Valuation - The valuation allowance against deferred tax assets was approximately$40.4 million as of June 30, 2024, reflecting the Company's belief that it is more likely than not that these assets will not be realized[42]. - The Company did not record any unrecognized tax positions as of June 30, 2024[42]. - The Company has no financial instruments classified as Level 3 in the fair value hierarchy during the three and six months ended June 30, 2024 and 2023[32]. General Observations - The company has incurred substantial losses since inception and expects to continue incurring operating losses in the near term, indicating ongoing financial challenges[16]. - There have been no material changes to risk factors previously disclosed in the Annual Report for the year ended December 31, 2023[88].