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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 June 30, 2023

 

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

 

For the transition period from ___________ to ___________

 

GENELUX CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware   001-41599   77-0583529

(State or other jurisdiction of

incorporation or organization)

 

Commission

File Number

 

(IRS Employee

Identification No.)

 

2625 Townsgate Road, Suite 230, Westlake Village, California 91361

(Address of Principal Executive Offices)

 

(805) 267-9889

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

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

 

Title of each class registered:   Trading symbol:   Name of each exchange on which registered:
Common Stock, par value $0.001 per share   GNLX  

The Nasdaq Stock Market LLC

(Nasdaq Capital Market)

 

Securities registered under Section 12(g) of the Exchange Act: None

 

Indicate by check mark whether the issuer (1) 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

 

Large Accelerated Filer ☐ Non-Accelerated Filer
Accelerated Filer ☐ Smaller Reporting Company
  Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No

 

The number of shares issued and outstanding of each of the issuer’s classes of common equity as of August 9, 2023 was 26,182,892.

 

 

 

 

 

 

GENELUX CORPORATION

FORM 10-Q

June 30, 2023

TABLE OF CONTENTS

 

PART I— FINANCIAL INFORMATION  
     
Item 1. Condensed Financial Statements 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
Item 3 Quantitative and Qualitative Disclosures About Market Risk 34
Item 4. Control and Procedures 35
     
PART II— OTHER INFORMATION 36
     
Item 1 Legal Proceedings 36
Item 1A Risk Factors 36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 109
Item 3. Defaults Upon Senior Securities 110
Item 4. Mine Safety Disclosures 110
Item 5. Other Information 110
Item 6. Exhibits 110
     
SIGNATURES 111

 

2
 

 

Genelux Corporation

Condensed Balance Sheets

(In thousands, except for share amounts and par value data)

 

   June 30, 2023   December 31, 2022 
   (Unaudited)     
ASSETS          
Current Assets          
Cash  $27,140   $397 
Prepaid expenses and other current assets   1,543    1,495 
Total Current Assets   28,683    1,892 
           
Property and equipment, net   878    644 
Right of use asset   1,710    1,335 
Deferred offering costs   -    1,568 
Other assets   92    92 
Total Other Assets   2,680    3,639 
           
TOTAL ASSETS  $31,363   $5,531 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)          
Current Liabilities          
Accounts payable and accrued expenses  $4,484   $6,775 
Accrued compensation   2,684    2,852 
Accrued interest payable   -    1,178 
Accrued interest payable - director and shareholders   60    3,817 
Deferred revenue   -    170 
Warrant liabilities   -    169 
Lease liability, current portion   585    266 
Notes payable - shareholders, net of debt discount of $108 in 2022   -    992 
Convertible notes payable - shareholders, current portion, including $65 and $105 past due, respectively   65    15,407 
Total Current Liabilities   7,878    31,626 
           
Long-term Liabilities          
Lease liability, long-term portion   1,229    1,164 
Convertible notes payable, net of debt discount of $541 in 2022   -    8,524 
Total Long-term Liabilities   1,229    9,688 
           
Total Liabilities   9,107    41,314 
           
Shareholders’ Equity (Deficit)          
Preferred stock, Series A through K, par value $0.001, 10,000,000 shares authorized; no shares and 22,094,889 shares issued and outstanding, respectively;   -    22 
Common stock, par value $0.001, 200,000,000 shares authorized; 25,855,511 and 9,126,726 shares issued and outstanding, respectively   26    9 
Treasury stock, 433,333 shares, at cost   (433)   (433)
Additional paid-in capital   232,073    154,401 
Accumulated other comprehensive income   2    2 
Accumulated deficit   (209,412)   (189,784)
Total Shareholders’ Equity (Deficit)   22,256    (35,783)
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)  $31,363   $5,531 

 

The accompanying notes are an integral part of these condensed financial statements.

 

3
 

 

Genelux Corporation

Condensed Statements of Operations

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

 

                 
   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2023   2022   2023   2022 
   (Unaudited)   (Unaudited) 
                 
Revenues  $-   $-   $170   $- 
                     
Operating expenses:                    
Research and development   2,943    1,827    5,788    4,196 
General and administrative   2,452    972    6,239    2,067 
Total operating expenses   5,395    2,799    12,027    6,263 
                     
Loss from operations   (5,395)   (2,799)   (11,857)   (6,263)
                     
Other expenses:                    
Interest expense   (24)   (285)   (167)   (573)
Debt discount amortization   -    (50)   (649)   (99)
Financing costs   -    -    (3,110)   - 
Debt extinguishment costs   (402)   -    (402)   - 
Gain on forgiveness of PPP loan payable   -    314    -    314 
Total other expenses   (426)   (21)   (4,328)   (358)
                     
NET LOSS  $(5,821)  $(2,820)  $(16,185)  $(6,621)
                     
BASIC AND DILUTED LOSS PER COMMON SHARE  $(0.23)  $(0.31)  $(0.72)  $(0.73)
                     
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING -BASIC AND DILUTED  
 
 
 
 
25,068,334
 
 
 
 
 
 
 
9,111,694
 
 
 
 
 
 
 
22,334,311
 
 
 
 
 
 
 
9,111,039
 
 

 

The accompanying notes are an integral part of these condensed financial statements.

 

4
 

 

Genelux Corporation

Condensed Statements of Shareholders’ Equity (Deficit) (Unaudited)

(in thousands, except share amounts)

 

                               Accumulated         
   Preferred Stock                   Additional   Other         
   Series A through K   Common Stock   Treasury Stock   Paid-in   Comprehensive   Accumulated     
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Income   Deficit   Total 
                                         
Balance, March 31, 2023 (unaudited)   -   $-    24,553,470   $24    (433,333)  $(433)  $206,689   $      2   $(203,591)  $2,691 
                                                   
Stock compensation   -    -    -    -    -    -    240    -    -    240 
                                                   
Issuance of common shares upon the closing of private financings, net of offering costs   -    -    1,117,079    2    -    -    21,640    -    -    21,642 
                                                   
Conversion of notes payable-shareholders and accrued interest   -    -    73,134    -    -    -    1,865    -    -    1,865 
                                                   
Fair value of vested restricted stock units   -    -    -    -    -    -    429    -    -    429 
                                                   
Cost of stock option repricing   -    -    -    -    -    -    36    -    -    36 
                                                   
Issuance of common shares upon exercise of stock warrants   -    -    111,828    -    -    -    1,174    -    -    1,174 
                                                   
Net loss during the three months ended June 30, 2023   -    -    -    -    -    -    -    -    (5,821)   (5,821)
                                                   
Balance, June 30, 2023 (unaudited)   -   $-    25,855,511    26    (433,333)  $(433)  $232,073   $2   $(209,412)  $22,256 
                                                   
Balance, December 31, 2022   22,094,889   $22    9,126,726   $9    (433,333)  $(433)  $154,401   $2   $(189,784)  $(35,783)
                                                   
Stock compensation   -    -    -    -    -    -    467    -    -    467 
                                                   
Issuance of common shares upon the closing of the initial public offering, net of offering costs   -    -    2,653,000    3    -    -    12,629    -    -    12,632 
                                                   
Issuance of common shares upon the closing of private financings, net of offering costs   -    -    1,117,079    2    -    -    21,640    -    -    21,642 
                                                   
Issuance of common shares upon conversion of preferred stock   (22,094,889)   (22)   8,355,610    8    -    -    14    -    -    - 
                                                   
Issuance of common shares upon conversion of convertible notes payable, accrued interest and loan fees   -    -    4,134,367    4    -    -    29,892    -    -    29,896 
                                                   
Issuance of common shares upon conversion of preferred stock dividends payable   -    -    272,101    -    -    -    3,443    -    (3,443)   - 
                                                   
Fair value of vested restricted stock units   -    -    -    -    -    -    627    -    -    627 
                                                   
Cost of stock option repricing   -    -    -    -    -    -    2,642    -    -    2,642 
                                                   
Reclassification of warrant liabilities upon the closing of the initial public offering   -    -    -    -    -    -    169    -    -    169 
                                                   
Fair value of warrants issued in connection with the conversion of convertible notes payable   -    -    -    -    -    -    3,110    -    -    3,110 
                                                   
Conversion of notes payable-shareholders and accrued interest   -    -    73,134    -    -    -    1,865    -    -    1,865 
                                                   
Issuance of common shares upon exercise of stock warrants   -    -    123,494    -    -    -    1,174    -    -    1,174 
                                                   
Net loss during the six months ended June 30, 2023   -    -    -    -    -    -    -    -    (16,185)   (16,185)
                                                   
Balance, June 30, 2023 (unaudited)   -   $-    25,855,511   $26    (433,333)  $(433)  $232,073   $2   $(209,412)  $22,256 
                                                   
Balance, March 31, 2022 (unaudited)   22,094,889   $22    9,110,060   $9    (433,333)  $(433)  $152,238   $2   $(188,378)  $(36,540)
                                                   
Stock compensation   -    -    -    -    -    -    297    -    -    297 
                                                   
Shares issued upon exercise of stock warrant   -    -    3,333    -    -    -    -    -    -    - 
                                                   
Net loss during the three months ended June 30, 2022   -    -    -    -    -    -    -    -    (2,820)   (2,820)
                                                   
Balance, June 30, 2022 (unaudited)   22,094,889   $22    9,113,393   $9    (433,333)  $(433)  $152,535   $2   $(191,198)  $(39,063)
                                                   
Balance, December 31, 2021   22,094,889   $22    9,110,060   $9    (433,333)  $(433)  $151,866   $2   $(184,577)  $(33,111)
                                                   
Stock compensation   -    -    -    -    -    -    669    -    -    669 
                                                   
Shares issued upon exercise of stock warrant   -    -    3,333    -    -    -    -    -    -    - 
                                                   
Net loss during the six months ended June 30, 2022   -    -    -    -    -    -    -    -    (6,621)   (6,621)
                                                   
Balance, June 30, 2022 (unaudited)   22,094,889   $22    9,113,393   $9    (433,333)  $(433)  $152,535   $2   $(191,198)  $(39,063)

 

The accompanying notes are an integral part of these condensed financial statements.

 

5
 

 

Genelux Corporation

Condensed Statements of Cash Flows

(In thousands)

 

   2023   2022 
   Six Months Ended 
   June 30, 
   2023   2022 
   (Unaudited) 
Cash Flows from Operating Activities          
Net loss  $(16,185)  $(6,621)
           
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation expense   271    277 
Right-of-use asset   274    205 
Amortization of debt discount   649    99 
Stock compensation   467    669 
Fair value of restricted stock units   627    - 
Cost of stock option repricing   2,642    - 
Debt extinguishment costs   402    - 
Fair value of warrants issued in connection with the conversion of convertible notes payable   3,110    - 
Gain on forgiveness of PPP loan payable   -    (314)
Changes in Assets and Liabilities          
(Increase) Decrease in:          
Prepaid expenses and other assets   (48)   (514)
(Decrease) Increase in:          
Accounts payable and accrued expenses   (1,658)   940 
Accrued compensation   (168)   12 
Accrued interest payable   44    388 
Deferred revenue   (170)   5,460 
Lease liability   (265)   (184)
Net cash provided by (used in) operating activities   (10,008)   417 
           
Cash Flows from Investing Activities          
Purchases of property and equipment   (505)   (16)
Net cash used in investing activities   (505)   (16)
           
Cash Flows from Financing Activities          
Proceeds from notes payable - shareholders   900    - 
Repayment of notes payable - shareholders   (660)   - 
Repayment of convertible notes payable - shareholders   -    (130)
Payment of deferred offering costs   (303)   (564)
Proceeds from the exercise of stock warrants   1,174    - 
Proceeds from common stock issued for cash in connection with the closing of the IPO   14,503    - 
Proceeds from common stock issued for cash in connection with the closing of private financings   21,642    - 
Net cash provided by (used in) financing activities   37,256    (694)