0.260.830.582.3572466642867496509276328644400000812796--12-312023Q2falseP2YP1YP3MP3Y0.0670.067P2Y0.067P4Y0.0670.0670.0670.0010.0010000290857898418540.33330.33330000812796us-gaap:SeriesDPreferredStockMember2023-06-300000812796us-gaap:SeriesDPreferredStockMember2022-12-310000812796us-gaap:SeriesDPreferredStockMember2022-12-210000812796us-gaap:SeriesDPreferredStockMemberus-gaap:PreferredStockMember2022-12-310000812796sngx:PreFundedWarrantMemberus-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300000812796sngx:PreFundedWarrantMember2023-04-012023-06-300000812796sngx:PreFundedWarrantMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300000812796sngx:PreFundedWarrantMember2023-01-012023-06-300000812796sngx:SilkRoadMemberus-gaap:CommonStockMembersngx:ExclusiveOptionAgreementMember2023-04-012023-06-300000812796sngx:SilkRoadMemberus-gaap:CommonStockMembersngx:ExclusiveOptionAgreementMember2023-01-012023-06-300000812796us-gaap:CommonStockMembersngx:PublicOfferingMember2023-05-092023-05-0900008127962023-04-272023-04-270000812796sngx:AssetPurchaseAgreementMember2020-03-012020-03-310000812796us-gaap:CommonStockMember2022-04-012022-06-300000812796us-gaap:CommonStockMember2022-01-012022-06-300000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-06-082023-06-080000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-05-222023-05-220000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-05-102023-05-100000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-05-092023-05-090000812796sngx:PreFundedWarrantMemberus-gaap:CommonStockMember2023-04-012023-06-300000812796sngx:PreFundedWarrantMemberus-gaap:CommonStockMember2023-01-012023-06-3000008127962023-02-102023-02-100000812796us-gaap:RetainedEarningsMember2023-06-300000812796us-gaap:AdditionalPaidInCapitalMember2023-06-300000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300000812796us-gaap:RetainedEarningsMember2023-03-310000812796us-gaap:AdditionalPaidInCapitalMember2023-03-310000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100008127962023-03-310000812796us-gaap:RetainedEarningsMember2022-12-310000812796us-gaap:AdditionalPaidInCapitalMember2022-12-310000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000812796us-gaap:RetainedEarningsMember2022-06-300000812796us-gaap:AdditionalPaidInCapitalMember2022-06-300000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000812796us-gaap:RetainedEarningsMember2022-03-310000812796us-gaap:AdditionalPaidInCapitalMember2022-03-310000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100008127962022-03-310000812796us-gaap:RetainedEarningsMember2021-12-310000812796us-gaap:AdditionalPaidInCapitalMember2021-12-310000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000812796us-gaap:CommonStockMember2023-06-300000812796us-gaap:CommonStockMember2023-03-310000812796us-gaap:CommonStockMember2022-12-310000812796us-gaap:CommonStockMember2022-06-300000812796us-gaap:CommonStockMember2022-03-310000812796us-gaap:CommonStockMember2021-12-3100008127962023-04-270000812796us-gaap:CommonStockMembersngx:ExclusiveOptionAgreementMember2023-05-020000812796us-gaap:GrantMember2023-04-012023-06-300000812796us-gaap:GrantMember2023-01-012023-06-300000812796us-gaap:GrantMember2022-04-012022-06-300000812796us-gaap:GrantMember2022-01-012022-06-300000812796us-gaap:GovernmentContractMember2022-01-012022-06-300000812796sngx:PreFundedWarrantsMember2023-01-012023-06-300000812796sngx:PublicOfferingMember2023-05-092023-05-090000812796us-gaap:SeriesDPreferredStockMember2022-12-310000812796srt:MaximumMember2022-12-310000812796sngx:AssetPurchaseAgreementMember2014-09-012014-09-300000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300000812796us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300000812796us-gaap:RetainedEarningsMember2023-04-012023-06-300000812796us-gaap:RetainedEarningsMember2023-01-012023-06-300000812796us-gaap:RetainedEarningsMember2022-04-012022-06-300000812796us-gaap:RetainedEarningsMember2022-01-012022-06-3000008127962020-07-012020-07-310000812796sngx:PontifaxMedisonFinanceMemberus-gaap:ConvertibleDebtMember2023-04-190000812796sngx:HybryteMember2023-01-012023-06-300000812796sngx:CivaxMember2023-01-012023-06-300000812796sngx:NationalInstitutesOfHealthMember2023-06-300000812796sngx:SilkRoadMembersngx:ExclusiveOptionAgreementMember2023-04-012023-06-300000812796sngx:SilkRoadMembersngx:ExclusiveOptionAgreementMember2023-01-012023-06-300000812796sngx:PontifaxMedisonFinanceMemberus-gaap:ConvertibleDebtMember2023-04-182023-04-180000812796us-gaap:ConvertibleDebtMember2023-04-012023-06-300000812796us-gaap:ConvertibleDebtMember2022-04-012022-06-300000812796us-gaap:ConvertibleDebtMember2022-01-012022-06-300000812796srt:MinimumMemberus-gaap:MeasurementInputConversionPriceMember2023-06-300000812796srt:MaximumMemberus-gaap:MeasurementInputConversionPriceMember2023-06-300000812796us-gaap:MeasurementInputSharePriceMember2023-06-300000812796us-gaap:MeasurementInputRiskFreeInterestRateMember2023-06-300000812796us-gaap:MeasurementInputPriceVolatilityMember2023-06-300000812796us-gaap:MeasurementInputDiscountRateMember2023-06-300000812796srt:MinimumMemberus-gaap:MeasurementInputConversionPriceMember2023-04-190000812796srt:MaximumMemberus-gaap:MeasurementInputConversionPriceMember2023-04-190000812796us-gaap:MeasurementInputSharePriceMember2023-04-190000812796us-gaap:MeasurementInputRiskFreeInterestRateMember2023-04-190000812796us-gaap:MeasurementInputPriceVolatilityMember2023-04-190000812796us-gaap:MeasurementInputDiscountRateMember2023-04-190000812796srt:MaximumMemberus-gaap:ConvertibleDebtMember2020-12-310000812796us-gaap:ConvertibleDebtMember2020-12-310000812796us-gaap:OperatingSegmentsMembersngx:PublicHealthSolutionsMember2023-04-012023-06-300000812796us-gaap:OperatingSegmentsMembersngx:BioTherapeuticsMember2023-04-012023-06-300000812796us-gaap:CorporateNonSegmentMember2023-04-012023-06-300000812796us-gaap:OperatingSegmentsMembersngx:PublicHealthSolutionsMember2023-01-012023-06-300000812796us-gaap:OperatingSegmentsMembersngx:BioTherapeuticsMember2023-01-012023-06-300000812796us-gaap:CorporateNonSegmentMember2023-01-012023-06-300000812796us-gaap:OperatingSegmentsMembersngx:PublicHealthSolutionsMember2022-04-012022-06-300000812796us-gaap:OperatingSegmentsMembersngx:BioTherapeuticsMember2022-04-012022-06-300000812796us-gaap:CorporateNonSegmentMember2022-04-012022-06-300000812796us-gaap:OperatingSegmentsMembersngx:PublicHealthSolutionsMember2022-01-012022-06-300000812796us-gaap:OperatingSegmentsMembersngx:BioTherapeuticsMember2022-01-012022-06-300000812796us-gaap:CorporateNonSegmentMember2022-01-012022-06-300000812796sngx:ThirdTrancheMemberus-gaap:ConvertibleDebtMember2020-12-310000812796sngx:SecondTrancheMemberus-gaap:ConvertibleDebtMember2020-12-310000812796sngx:FirstTrancheMemberus-gaap:ConvertibleDebtMember2020-12-310000812796us-gaap:ConvertibleDebtMember2023-04-190000812796us-gaap:ConvertibleDebtMember2023-06-300000812796us-gaap:ResearchAndDevelopmentArrangementMember2023-06-300000812796us-gaap:LeaseAgreementsMember2023-06-3000008127962021-08-130000812796sngx:PreFundedWarrantMembersngx:PublicOfferingMember2023-05-090000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-06-080000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-05-220000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-05-100000812796us-gaap:CommonStockMembersngx:PublicOfferingMember2023-05-090000812796sngx:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-05-090000812796sngx:PreFundedWarrantsMembersngx:PublicOfferingMember2023-05-090000812796sngx:CommonWarrantsMembersngx:PublicOfferingMember2023-05-090000812796sngx:PublicOfferingMember2023-05-0900008127962021-12-310000812796us-gaap:OperatingSegmentsMembersngx:PublicHealthSolutionsMember2023-06-300000812796us-gaap:OperatingSegmentsMembersngx:BioTherapeuticsMember2023-06-300000812796us-gaap:CorporateNonSegmentMember2023-06-300000812796us-gaap:OperatingSegmentsMembersngx:PublicHealthSolutionsMember2022-12-310000812796us-gaap:OperatingSegmentsMembersngx:BioTherapeuticsMember2022-12-310000812796us-gaap:CorporateNonSegmentMember2022-12-310000812796srt:MaximumMemberus-gaap:ScenarioPlanMembersngx:AssetPurchaseAgreementMember2023-01-012023-06-300000812796us-gaap:WarrantMember2023-01-012023-06-300000812796us-gaap:EmployeeStockOptionMember2023-01-012023-06-300000812796us-gaap:ConvertibleDebtSecuritiesMember2023-01-012023-06-300000812796us-gaap:WarrantMember2022-01-012022-06-300000812796us-gaap:EmployeeStockOptionMember2022-01-012022-06-300000812796us-gaap:ConvertibleDebtSecuritiesMember2022-01-012022-06-300000812796us-gaap:AdditionalPaidInCapitalMembersngx:PublicOfferingMember2023-04-012023-06-300000812796us-gaap:AdditionalPaidInCapitalMembersngx:BRileySalesAgreementMember2023-04-012023-06-300000812796sngx:PublicOfferingMember2023-04-012023-06-300000812796sngx:BRileySalesAgreementMember2023-04-012023-06-300000812796us-gaap:AdditionalPaidInCapitalMembersngx:PublicOfferingMember2023-01-012023-06-300000812796us-gaap:AdditionalPaidInCapitalMembersngx:BRileySalesAgreementMember2023-01-012023-06-300000812796sngx:PublicOfferingMember2023-01-012023-06-300000812796sngx:BRileySalesAgreementMember2023-01-012023-06-300000812796us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300000812796us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300000812796sngx:PreFundedWarrantsMember2023-05-092023-05-0900008127962022-04-012022-06-300000812796sngx:PrincipalMember2023-06-300000812796sngx:InterestMember2023-06-300000812796sngx:BRileySalesAgreementMember2017-08-112017-08-110000812796us-gaap:SeriesDPreferredStockMemberus-gaap:PreferredStockMember2023-01-012023-06-300000812796us-gaap:SeriesDPreferredStockMember2023-06-300000812796us-gaap:SeriesDPreferredStockMember2022-12-212022-12-210000812796us-gaap:SeriesDPreferredStockMember2023-01-012023-06-300000812796sngx:AtMarketIssuanceSalesAgreementMember2023-01-012023-06-3000008127962023-02-092023-02-090000812796us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300000812796us-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300000812796us-gaap:CommonStockMember2023-04-012023-06-300000812796us-gaap:CommonStockMember2023-01-012023-06-300000812796us-gaap:OneTimeTerminationBenefitsMember2023-01-012023-06-300000812796srt:DirectorMember2023-01-012023-06-3000008127962022-06-300000812796us-gaap:CommonStockMembersngx:ExclusiveOptionAgreementMember2023-05-022023-05-020000812796sngx:AssetPurchaseAgreementMember2023-01-012023-06-300000812796srt:MinimumMember2023-01-012023-06-300000812796srt:MaximumMember2023-01-012023-06-3000008127962022-01-012022-06-300000812796sngx:PontifaxMedisonFinanceMemberus-gaap:ConvertibleDebtMember2023-04-192023-04-190000812796us-gaap:SubsequentEventMembersngx:BRileySalesAgreementMember2023-08-142023-08-140000812796us-gaap:OverAllotmentOptionMembersngx:BRileySalesAgreementMember2023-08-142023-08-140000812796sngx:FromPeriodTillNovember2024Member2023-06-300000812796sngx:FromPeriodTillLeaseExpiration2024Member2023-06-300000812796sngx:ForPeriodTillNovember2023Member2023-06-300000812796sngx:FromPeriodTillNovember2024Member2022-06-210000812796sngx:ForPeriodTillNovember2023Member2022-06-2100008127962022-06-210000812796sngx:LongTermReceivableMember2023-06-300000812796sngx:CurrentReceivablesMember2023-06-3000008127962023-06-300000812796sngx:LongTermReceivableMember2022-12-310000812796sngx:CurrentReceivablesMember2022-12-3100008127962022-12-310000812796sngx:LongTermReceivableMember2023-01-012023-06-3000008127962023-04-012023-06-300000812796us-gaap:ConvertibleDebtMember2023-01-012023-06-300000812796sngx:PontifaxMedisonFinanceMembersngx:NumberOfFirstEquityInstrumentsCommonStockIssuableUponConversionMemberus-gaap:ConvertibleDebtMember2023-04-192023-04-190000812796us-gaap:ConvertibleDebtMember2020-12-012020-12-3100008127962023-03-2800008127962022-01-020000812796sngx:AssetPurchaseAgreementMember2020-03-310000812796us-gaap:SubsequentEventMembersngx:BRileySalesAgreementMember2023-08-140000812796sngx:CurrentReceivablesMember2023-01-012023-06-3000008127962023-08-1400008127962023-01-012023-06-30xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:puresngx:Voteutr:sqftsngx:segment

Table of Contents

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

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 No. 001-14778

SOLIGENIX, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

  

41-1505029

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification Number)

29 EMMONS DRIVE, SUITE B-10 PRINCETON, NJ

  

08540

(Address of principal executive offices)

(Zip Code)

(609) 538-8200

(Registrant’s telephone number, including area code)

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 $.001 per share

SNGX

The Nasdaq Capital Market

Indicate by check whether the registrant (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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

As of August 14, 2023, 9,841,854 shares of the registrant’s common stock (par value, $.001 per share) were outstanding.

Table of Contents

SOLIGENIX, INC.

Index

    

Description

    

Page

Part I

FINANCIAL INFORMATION

Item 1

Consolidated Financial Statements

Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022

1

Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

2

Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

3

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity/(Deficit) for the Six Months Ended June 30, 2023 and 2022 (unaudited)

4

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity/(Deficit) for the Three Months Ended June 30, 2023 and 2022 (unaudited)

5

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (unaudited)

6

Notes to Consolidated Financial Statements (unaudited)

7

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

Item 3

Quantitative and Qualitative Disclosures About Market Risk

59

Item 4

Controls and Procedures

60

Part II

OTHER INFORMATION

Item 1

Legal Proceedings

61

Item 1A

Risk Factors

62

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

63

Item 6

Exhibits

63

SIGNATURES

64

i

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Soligenix, Inc. and Subsidiaries

Consolidated Balance Sheets

June 30, 

December 31, 

    

2023

    

2022

Assets

 

(unaudited)

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

13,160,939

$

13,359,615

Contracts and grants receivable

 

113,756

 

115,130

Research and development incentives receivable, current

 

25,284

 

104,198

Prepaid expenses and other current assets

 

171,327

 

274,209

Total current assets

 

13,471,306

 

13,853,152

Security deposit

 

22,777

 

22,777

Office furniture and equipment, net of accumulated depreciation of $118,141 and $114,766

 

15,106

 

18,481

Deferred issuance cost

 

17,867

 

20,206

Right-of-use lease assets

 

286,555

 

340,987

Research and development incentives receivable, net of current portion

 

12,642

 

24,114

Total assets

$

13,826,253

$

14,279,717

Liabilities, mezzanine equity and shareholders' equity/(deficit)

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable

$

2,472,327

$

3,865,796

Accrued expenses

 

2,346,361

 

2,307,746

Accrued compensation

 

73,861

 

336,692

Lease liabilities, current

 

115,221

 

108,948

Convertible debt, net of debt discount of $0 and $102,309

750,000

9,897,691

Total current liabilities

 

5,757,770

 

16,516,873

Non-current liabilities:

 

  

 

  

Convertible debt

 

2,094,000

 

Lease liabilities, net of current portion

 

174,283

 

233,627

Total liabilities

 

8,026,053

 

16,750,500

Commitments and contingencies

 

  

 

  

Mezzanine equity:

Series D preferred stock, $.001 par value; 0 and 50,000 shares authorized, none issued or outstanding as of June 30, 2023 and December 31, 2022, respectively

43

Shareholders’ equity/(deficit):

 

  

 

  

Preferred stock, 350,000 and 300,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively; none issued or outstanding

Common stock, $.001 par value; 75,000,000 shares authorized; 9,841,854 and 2,908,578 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively¹

 

9,842

 

2,909

Additional paid-in capital

 

228,005,876

 

217,064,964

Accumulated other comprehensive income

 

6,061

 

24,747

Accumulated deficit

 

(222,221,579)

 

(219,563,446)

Total shareholders’ equity/(deficit)

 

5,800,200

 

(2,470,826)

Total liabilities, mezzanine equity and shareholders’ equity/(deficit)

$

13,826,253

$

14,279,717

(1)Adjusted to reflect the reverse stock split of one-for-fifteen effective February 10, 2023

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

1

Table of Contents

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2023 and 2022

(Unaudited)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2023

    

2022

    

2023

    

2022

Revenues:

 

  

 

  

 

  

 

  

Licensing revenue

$

$

$

$

50,000

Grant revenue

 

206,929

 

228,640

 

464,107

 

366,703

Total revenues

 

206,929

 

228,640

 

464,107

 

416,703

Cost of revenues

 

(184,021)

 

(193,304)

 

(410,061)

 

(285,517)

Gross profit

 

22,908

 

35,336

 

54,046

 

131,186

Operating expenses:

 

  

 

  

 

  

 

  

Research and development

 

762,699

 

2,047,839

 

1,709,150

 

3,794,607

General and administrative

 

890,533

 

1,382,793

 

2,125,909

 

3,924,261

Total operating expenses

 

1,653,232

 

3,430,632

 

3,835,059

 

7,718,868

Loss from operations

 

(1,630,324)

 

(3,395,296)

 

(3,781,013)

 

(7,587,682)

Other income (expense):

 

  

 

  

 

  

 

  

Foreign currency transaction gain (loss)

 

3,722

 

94,900

 

3,356

 

(13,393)

Interest expense, net

 

(60,194)

 

(214,908)

 

(163,762)

 

(426,622)

Research and development incentives

6,209

(26,391)

12,657

136,981

Other income

2,354

43,223

Loss on extinguishment of debt

 

(393,791)

 

 

(393,791)

 

Change in fair value of convertible debt

460,000

460,000

Total other expense

18,300

(146,399)

(38,317)

(303,034)

Net loss before income taxes

 

(1,612,024)

 

(3,541,695)

 

(3,819,330)

 

(7,890,716)

Income tax benefit

 

 

1,154,935

 

1,161,197

 

1,154,935

Net loss applicable to common stockholders

$

(1,612,024)

$

(2,386,760)

$

(2,658,133)

$

(6,735,781)

Basic and diluted net loss per share (1)

$

(0.22)

$

(0.83)

$

(0.52)

$

(2.35)

Basic and diluted weighted average common shares outstanding (1)

 

7,246,664

 

2,867,496

 

5,092,763

 

2,864,440

(1)Adjusted to reflect the reverse stock split of one-for-fifteen effective February 10, 2023

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

2

Table of Contents

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Loss

For the Three and Six Months Ended June 30, 2023 and 2022

(Unaudited)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2023

    

2022

    

2023

    

2022

Net loss

$

(1,612,024)

$

(2,386,760)

$

(2,658,133)

$

(6,735,781)

Other comprehensive income (loss):

 

 

 

 

Foreign currency translation adjustments

(6,533)

(113,523)

(18,686)

(30,873)

Comprehensive loss

$

(1,618,557)

$

(2,500,283)

$

(2,676,819)

$

(6,766,654)

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

3

Table of Contents

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity/(Deficit)

For the Six Months Ended June 30, 2023 and 2022

    

    

    

    

Accumulated

    

    

Mezzanine Equity-

Additional

Other

Series D Preferred Stock

Common Stock

Paid–In

Comprehensive

Accumulated

Shares

Par Value

  

  

Shares

Par Value

Capital

Income (Loss)

Deficit

Total

Balance, December 31, 2022

 

$

43

2,908,578

$

2,909

$

217,064,964

$

24,747

$

(219,563,446)

$

(2,470,826)

Sale of common stock pursuant to B. Riley At Market Issuance Sales Agreement

 

851,130

 

851

 

3,090,611

 

 

 

3,091,462

Issuance costs associated with B. Riley At Market Issuance Sales Agreement

 

 

 

(95,348)

 

 

 

(95,348)

Redemption of Series D preferred stock

(43)

Issuance of common stock and pre-funded warrants in connection with May 2023 public offering

2,301,500

2,301

8,493,516

8,495,817

Issuance costs associated with May 2023 public offering

(834,061)

(834,061)

Issuance of common stock to vendors

 

50,000

 

50

 

72,950

 

 

 

73,000

Issuance of common stock upon exercise of pre-funded warrants

 

3,699,000

 

3,699

 

(400)

 

 

 

3,299

Issuance of common stock in connection with Silk Roads purchase option

31,646

32

49,968

50,000

Share-based compensation expense

 

 

 

163,676

 

 

 

163,676

Foreign currency translation adjustment

 

 

 

 

(18,686)

 

 

(18,686)

Net loss

 

 

 

 

 

(2,658,133)

(2,658,133)

Balance, June 30, 2023

 

$

9,841,854

$

9,842

$

228,005,876

$

6,061

$

(222,221,579)

$

5,800,200

    

    

    

    

Accumulated

    

    

Mezzanine Equity-

Additional

Other

Series D Preferred Stock

Common Stock

Paid–In

Comprehensive

Accumulated

Shares

Par Value

Shares

Par Value

Capital

Income (Loss)

Deficit

Total

Balance, December 31, 2021

 

$

2,858,244

$

2,859

$

216,442,904

$

41,942

$

(205,765,107)

$

10,722,598

Issuance of common stock to vendors

 

11,788

 

11

 

99,990

 

 

 

100,001

Share-based compensation expense

 

 

 

149,941

 

 

 

149,941

Foreign currency translation adjustment

 

 

 

 

(30,873)

 

 

(30,873)

Net loss

 

 

 

 

 

(6,735,781)

 

(6,735,781)

Balance, June 30, 2022

 

$

2,870,032

$

2,870

$

216,692,835

$

11,069

$

(212,500,888)

$

4,205,886

Adjusted to reflect the reverse stock split of one-for-fifteen effective February 10, 2023.

4

Table of Contents

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Deficit

For the Three Months Ended June 30, 2023 and 2022

    

    

    

    

Accumulated

    

    

Additional

Other

Common Stock

Paid–In

Comprehensive

Accumulated

Shares

Par Value

Capital

Income (Loss)

Deficit

Total

Balance, March 31, 2023

 

2,929,773

$

2,930

$

217,206,966

$

12,594

$

(220,609,555)

$

(3,387,065)

Issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement

 

829,935

 

830

 

3,019,902

 

 

 

3,020,732

Issuance costs associated with B. Riley At Market Issuance Sales Agreement

 

 

 

(93,007)

 

 

 

(93,007)

Issuance of common stock and pre-funded warrants in connection with May 2023 public offering

2,301,500

2,301

8,493,516

8,495,817

Issuance costs associated with May 2023 public offering

(834,061)

(834,061)

Issuance of common stock to vendors

 

50,000

 

50

 

72,950

 

 

 

73,000

Issuance of common stock upon exercise of pre-funded warrants

 

3,699,000

 

3,699

 

(400)

 

 

 

3,299

Issuance of common stock in connection with Silk Roads purchase option

31,646

32

49,968

 

50,000

Share-based compensation expense

 

 

 

90,042

 

 

 

90,042

Foreign currency translation adjustment

 

 

 

 

(6,533)

 

 

(6,533)

Net loss

 

 

 

 

 

(1,612,024)

 

(1,612,024)

Balance, June 30, 2023

 

9,841,854

$

9,842

$

228,005,876

$

6,061

$

(222,221,579)

$

5,800,200

    

    

    

    

Accumulated

    

    

Additional

Other

Common Stock

Paid–In

Comprehensive

Accumulated

Shares

Par Value

Capital

Income (Loss)

Deficit

Total

Balance, March 31, 2022

 

2,863,621

$

2,864

$

216,571,171

$

124,592

$

(210,114,128)

$

6,584,499

Issuance of common stock to vendors

 

6,411

 

6

 

49,994

 

 

 

50,000

Share-based compensation expense

 

 

 

71,670

 

 

 

71,670

Foreign currency translation adjustment

 

 

 

 

(113,523)

 

 

(113,523)

Net loss

 

 

 

 

 

(2,386,760)

 

(2,386,760)

Balance, June 30, 2022

 

2,870,032

$

2,870

$

216,692,835

$

11,069

$

(212,500,888)

$

4,205,886

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

5

Table of Contents

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2023 and 2022

(Unaudited)

    

2023

    

2022

Operating activities:

 

  

 

  

Net loss

$

(2,658,133)

$

(6,735,781)

Adjustments to reconcile net loss to net cash used in operating activities:

 

  

 

  

Amortization and depreciation

 

3,375

 

16,744

Non-cash lease expense

 

54,432

 

60,475

Share-based compensation

 

163,676

 

149,941

Issuance of common stock to vendors for services

 

73,000

 

100,001

Issuance of common stock to Silk Roads for purchase option

50,000

Loss on extinguishment of debt

 

393,791

 

Change in fair value of convertible debt

(460,000)

Amortization of deferred issuance costs associated with convertible debt

 

12,518

 

20,598

Change in operating assets and liabilities:

 

 

Licensing, contracts and grants receivable

 

1,374

 

(182,890)

Prepaid expenses and other current assets

 

102,882

 

45,768

Research and development incentives receivable

 

93,821

 

70,335

Operating lease liability

 

(53,071)

 

(60,244)

Deferred revenue

200,000

Accounts payable and accrued expenses

 

(1,604,414)

 

793,324

Accrued compensation

 

(262,831)

 

(245,174)

Net cash used in operating activities

 

(4,089,580)

 

(5,766,903)

Investing activities:

 

  

 

  

Purchases of office furniture and equipment

 

 

(13,073)

Net cash used in investing activities

 

 

(13,073)

Financing activities:

 

  

 

  

Proceeds from issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement

 

3,091,462

 

Costs associated with B. Riley At Market Issuance Sales Agreement

 

(93,009)

 

Proceeds from issuance of common stock and pre-funded warrants pursuant to public offering

8,495,817

Stock issuance costs associated with public offering

(612,611)

Proceeds from the exercise of pre-funded warrants

3,299

Convertible debt repayments

 

(7,000,000)

 

Net cash provided by financing activities

 

3,884,958

 

Effect of exchange rate on cash and cash equivalents

 

5,946

 

(106,229)

Net decrease in cash and cash equivalents

 

(198,676)

 

(5,886,205)

Cash and cash equivalents at beginning of period

 

13,359,615

 

26,043,897

Cash and cash equivalents at end of period

$

13,160,939

$

20,157,692

Supplemental information:

 

  

 

  

Cash paid for state income taxes

$

10,879

$

5,600

Cash paid for interest

$

424,660

$

432,751

Cash paid for lease liabilities:

 

 

  

Operating lease

$

66,650

$

66,650

Non-cash investing and financing activities:

 

  

 

  

Right-of-use assets and lease liabilities recorded

$

$

347,546

Deferred issuance cost reclassified to additional paid-in capital

$

2,339

$

Redemption liability for Series D preferred stock

$

43

$

Stock issuance costs included in accounts payable

$

221,450

$

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

6

Table of Contents

Soligenix, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Nature of Business

Basis of Presentation

Soligenix, Inc. (the “Company”) is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics and Public Health Solutions.

The Company’s Specialized BioTherapeutics business segment is developing and moving toward commercialization of HyBryte™ (a proposed proprietary name of SGX301 or synthetic hypericin sodium), a novel photodynamic therapy (“PDT”) utilizing safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With successful completion of the Phase 3 FLASH (Fluorescent Light And Synthetic Hypericin) study, regulatory approval is being pursued in the United States (“U.S.”) and Europe. Following submission of a new drug application (“NDA”) for HyBryte™ in the treatment of CTCL, the Company received a refusal to file (“RTF”) letter from the U.S. Food and Drug Administration (“FDA”). The Company had a Type A meeting with the FDA to clarify and respond to the issues identified in the RTF letter and to seek additional guidance concerning information that the FDA would require for a resubmitted NDA to be deemed acceptable to file, in order to advance HyBryte™ towards U.S. marketing approval and commercialization. In order to accept an NDA filing for HyBryte™, the FDA is requiring positive results from a second, Phase 3 pivotal study in addition to the Phase 3, randomized, double-blind, placebo-controlled FLASH study previously conducted in this orphan indication. The FDA indicated that it is open to engaging in protocol discussions regarding the second, Phase 3 pivotal study. Based on this feedback, the Company is collaboratively engaging in active discussions with the FDA in order to define the protocol and evaluate the feasibility of conducting the additional Phase 3 clinical trial evaluating HyBryte™ in the treatment of CTCL in support of potential FDA marketing approval.

Development programs in this business segment also include expansion of synthetic hypericin sodium (SGX302) into psoriasis, the Company’s first-in-class innate defense regulator (“IDR”) technology, dusquetide (SGX942) for the treatment of inflammatory diseases, including oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal (“GI”) disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203).

The Company’s Public Health Solutions business segment includes active development programs for RiVax®, its ricin toxin vaccine candidate and SGX943, its therapeutic candidate for antibiotic resistant and emerging infectious disease, and vaccine programs, including a program targeting filoviruses (such as Marburg and Ebola) and a program developing CiVax™, its vaccine candidate for the prevention of COVID-19 (caused by SARS-CoV-2). The development of the vaccine programs is currently supported by the heat stabilization platform technology, known as ThermoVax®. To date, this business segment has been supported with grant and contract funding from the National Institute of Allergy and Infectious Diseases (“NIAID”), the Biomedical Advanced Research and Development Authority (“BARDA”) and the Defense Threat Reduction Agency (“DTRA”).

The Company primarily generates revenues under government grants and contracts principally from the National Institutes of Health (“NIH”). The Company was awarded a subcontract that originally provided for approximately $1.5 million from a NIAID grant over two years for development of CiVax™ and a subcontract that originally provided for approximately $1.1 million from a FDA Orphan Products Development grant over four years for an expanded study of HyBryte™ in the treatment of CTCL. The Company will continue to apply for additional government funding.

7

Table of Contents

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with the FDA regulations, and other regulatory authorities, litigation, and product liability.

Results for the six months ended June 30, 2023 are not necessarily indicative of results that may be expected for the full year.

Liquidity

In accordance with Accounting Standards Codification 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of June 30, 2023, the Company had an accumulated deficit of $222,221,579. During the six months ended June 30, 2023, the Company incurred a net loss of $2,658,133 and used $4,089,580 of cash in operating activities. The Company expects to continue to generate losses in the foreseeable future. The Company’s liquidity needs will be determined largely by the budgeted operational expenditures incurred in regards to the progression of its product candidates. The Company’s plans to meet its liquidity needs primarily include its ability to control the timing and spending on its research and development programs and raising additional funds through potential partnership and/or financings. Based on the Company’s operating budget, current rate of cash outflows, cash on hand, and proceeds from government contract and grant programs, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next twelve months from issuance of these financial statements on this Quarterly Report on Form 10-Q.

As of June 30, 2023, the Company had cash and cash equivalents of $13,160,939 as compared to $13,359,615 as of December 31, 2022, representing a decrease of $198,676 or 1%. As of June 30, 2023, the Company had working capital of $7,713,536 as compared to a working capital deficit of ($2,663,721) as of December 31, 2022, representing an increase in working capital of $10,377,257 or 390%. The decrease in cash and cash equivalents was primarily related to the repayment of $7 million of debt principal and cash used in operating activities of approximately $4.1 million offset by the net proceeds of approximately $7.7 million from the public offering in May 2023 and approximately $3 million of proceeds from shares sold via the At Market Issuance Sales Agreement (“B.Riley Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley”) during the six months ended June 30, 2023. The increase in working capital is primarily the result of the net proceeds received from the  financing activities during the six months ended June 30, 2023 and the reclassification of $2,094,000 of the Company’s convertible debt balance from a current liability as of December 31, 2022 to a non-current liability as of June 30, 2023 (resulting from the amendment to the loan and security agreement with Pontifax Medison Finance (“Pontifax”) – see Note 5), partially offset by cash used in operating activities during the six months ended June 30, 2023.

Management’s business strategy can be outlined as follows:

Following positive primary endpoint results for the Phase 3 FLASH (Florescent Light Activated Synthetic Hypericin) clinical trial of HyBryte™ in CTCL as well as further statistically significant improvement in response rates with longer treatment (18 weeks compared to 12 and 6 weeks of treatment), collaboratively engage in discussions with the FDA in order to define the protocol and evaluate the feasibility of conducting a second Phase 3 pivotal study in order to advance HyBryte™ towards U.S. marketing approval and commercialization while continuing to explore potential marketing approval and partnership in Europe.
Expanding development of synthetic hypericin under the research name SGX302 into psoriasis with the conduct of a Phase 2a clinical trial, following the positive Phase 3 FLASH study and positive proof-of-concept demonstrated in a small Phase 1/2 pilot study in mild-to-moderate psoriasis patients.

8

Table of Contents

Following execution of an exclusive option agreement with Silk Road Therapeutics, Inc. (“Silk Road”), granting the Company the right to acquire a novel topical formulation of Pentoxifylline (“PTX”) for treatment of Behçet’s Disease (“BD”), complete remaining diligence activities including potential discussion with the FDA on the appropriate Phase 2/3 trial design to advance PTX in BD to allow the Company to determine whether to exercise the option to acquire the PTX asset or allow the option to expire.
Following feedback from the United Kingdom (“UK”) Medicines and Healthcare products Regulatory Agency (“MHRA”) that a second Phase 3 clinical trial of SGX942 in the treatment in oral mucositis would be required to support a marketing authorization; design a second study and attempt to identify a potential partner(s) to continue this development program.
Continue development of the Company’s heat stabilization platform technology, ThermoVax®, in combination with its programs for RiVax® (ricin toxin vaccine), CiVax™ (COVID-19 vaccine) and filovirus vaccines for Ebola, Sudan, and Marburg Viruses, with U.S. government funding support.
Continue to apply for and secure additional government funding for each of the Company’s Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements.
Pursue business development opportunities for the Company’s pipeline programs, as well as explore merger/acquisition strategies.
Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with existing pipeline compounds for development.

The Company’s plans with respect to its liquidity management include, but are not limited to, the following:

The Company has up to $1.1 million in active government grant funding still available as of June 30, 2023 to support its associated research programs through May 2026, provided the federal agencies do not elect to terminate the grants for convenience. The Company plans to submit additional contract and grant applications for further support of its programs with various funding agencies. However, there can be no assurance that the Company will obtain additional governmental grant funding.
The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future.
The Company will continue to pursue Net Operating Loss (“NOL”) sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if available.
The Company plans to pursue potential partnerships for pipeline programs as well as continue to explore merger and acquisition strategies. However, there can be no assurances that the Company can consummate such transactions.
The Company has up to $23.6 million remaining from the B. Riley Sales Agreement as of August 14, 2023 under the prospectus supplement updated August 13, 2021. The Company is currently subject to the limitations contained in General Instruction I.B.6 of Form S-3. As a result, the Company is limited to selling no more than one-third of the aggregate market value of the equity held by non-affiliates, or the public float, during any 12-month period. From January 1, 2023 through August 14, 2023, the Company sold 851,130 shares of common stock pursuant to the B. Riley Sales Agreement at a weighted average price of $3.63 per share for total gross proceeds of $3,091,462. As of August 14, 2023, the Company does not currently have any remaining capacity for sales under the Form S-3 pursuant to General Instruction I.B.6. If the Company’s public float increases, the Company will have additional availability

9

Table of Contents

under such limitations, and if the Company’s public float increases to $75 million or more, the Company will no longer be subject to such limitations. There can be no assurance that the Company’s public float will increase or that the Company will no longer be subject to such limitations.
The Company completed a public offering of 2,301,500 shares of its common stock, pre-funded warrants to purchase 4,237,000 shares of its common stock and common warrants to purchase up to 6,538,500 shares of its common stock at a combined public offering price of $1.30. The pre-funded warrants have an exercise price of $0.001. The common warrants have an exercise price of $1.50 per share, are exercisable immediately and expire five years from the issuance date. The total gross proceeds to the Company from this offering were approximately $8.5 million before deducting commissions and other estimated offering expenses. The Company plans to use the proceeds for further support of its programs, as well as for working capital.

The Company may seek additional capital in the private and/or public equity markets, to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.

Reverse Stock Split

On February 9, 2023, the Company completed a reverse stock split of its issued and outstanding shares of common stock at a ratio of one-for-fifteen, whereby every fifteen shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock without any change in the par value per share. No fractional shares were issued as a result of the reverse stock split. Any fractional shares that would otherwise have resulted from the reverse stock split were rounded up to the next whole number. The Company’s common stock began trading on The NASDAQ Capital Market on a reverse split basis at the market opening on February 10, 2023. All share and per share data have been restated to reflect this reverse stock split.

Exclusive Option Agreement with Silk Road Therapeutics

On April 27, 2023, the Company entered into an exclusive option agreement with Silk Road to complete its due diligence assessment. The option agreement grants the Company an exclusive option to purchase all assets and rights, including intellectual property and regulatory documents, related to Silk Road’s Pentoxifylline product candidate, a non-biological anti-TNF-alpha inhibitor, for the treatment of mucocutaneous ulcers in patient’s suffering from Behcet’s Disease and expires on August 25, 2023. In consideration for the option, the Company paid $50,000 of cash and issued 31,646 shares of common stock with a value of $50,000. The consideration paid for the option was recorded as general and administrative expense during the three and six months ended June 30, 2023 on the accompanying consolidated statements of operations. The Company is continuing due diligence activities including potential discussion with the FDA on the appropriate Phase 2/3 trial design to advance PTX in BD to allow the Company to determine whether to exercise the option to acquire the PTX asset or allow the option to expire. Certain directors of the Company have an ownership interest and are part of the executive management team of Silk Road.

Nasdaq Capital Market Listing Requirements

As previously reported, on December 20, 2022, the Company received a written notice from Nasdaq providing that the staff (the “Staff”) of Nasdaq determined to delist the Company’s common stock from The Nasdaq Capital Market because the closing bid price of the Company’s common stock had not been at least $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”) and because the Company’s shareholders’ equity had not been at least $2,500,000 nor had the alternatives of market value of listed securities or net income from continuing operations been met, as required by Listing Rule 5550(b) (the

10

Table of Contents

“Shareholders’ Equity Requirement”). On February 2, 2023, the Company had an oral hearing with a Nasdaq Hearings Panel to appeal the Staff’s delisting determination. On February 21, 2023, the Company received a letter from Nasdaq, stating that the Nasdaq Hearings Panel granted the Company’s request to continue its listing on Nasdaq, on the condition that (1) on February 24, 2023, the Company had demonstrated compliance with the Bid Price Requirement, by evidencing a closing bid price of $1.00 or more per share for a minimum of ten consecutive trading sessions; and (2) on or before March 31, 2023, the Company had demonstrated compliance with the Shareholders’ Equity Requirement. As of the close of the market on February 24, 2023, the Company satisfied the first condition – compliance with the Bid Price Requirement for a minimum of ten consecutive trading sessions. On April 6, 2023, Nasdaq granted the Company’s request for an extension of the deadline by which it must regain compliance with the Shareholders’ Equity Requirement from March 31, 2023 to May 15, 2023. As of the close of the market on May 9, 2023, the Company came into compliance with the Shareholders’ Equity Requirement based on capital raising activities - see Note 1 - Liquidity.

On May 23, 2023, the Company received a letter from Nasdaq confirming that the Company had regained compliance with the Shareholders’ Equity Requirement and was in compliance with all other applicable requirements for listing on Nasdaq. Accordingly, the Panel determined to continue the listing of the Company’s securities on Nasdaq and closed the matter.

The Panel has also determined to impose a Panel Monitor on the Company for a period of one year. During the Panel Monitor period, the Company will be under an obligation to notify the Panel in the event its closing bid price falls below $1.00 on any trading day and if the Company falls out of compliance with any applicable listing requirement. If, during the Panel Monitor period, the Nasdaq Listing Qualifications Department determines that the Company has failed to meet any requirement for continued listing on Nasdaq, the Nasdaq Listing Qualifications Department may issue a delisting determination. In such event, the Company may seek a review of the delisting determination and the Nasdaq Hearings Department will schedule a hearing with regard to the deficiency.

On June 23, 2023, the Company received a letter from Nasdaq indicating that the Company was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market. The notification of noncompliance had no immediate effect on the listing or trading of the Company’s common stock on The Nasdaq Capital Market under the symbol “SNGX,” and the Company continues to monitor the closing bid price of its common stock and to evaluate its alternatives, if appropriate, to resolve the deficiency and regain compliance with this rule.

The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets this requirement. The June 23, 2023 letter indicated that the Company was provided 180 calendar days, or until December 20, 2023, in which to regain compliance. If at any time during this period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive business days, the Nasdaq Staff will provide the Company with a written confirmation of compliance and the matter will be closed.

In the event the Company does not regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, the Nasdaq Staff will provide the Company with written notification that its securities are subject to delisting from The Nasdaq Capital Market. At that time, the Company may appeal the delisting determination to a Nasdaq Listing Qualifications Panel.

Alternatively, if the Company fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, but meets the continued listing requirement for market value of publicly held shares and all of the other applicable standards for initial listing on The Nasdaq Capital Market, with the exception of the minimum bid price, and provides written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then the Company may be granted an additional 180 calendar days to regain compliance with Rule 5550(a)(2).

11

Table of Contents

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision-making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful accounts has been established. If amounts become uncollectible, they are charged to operations.

Impairment of Long-Lived Assets

Office furniture and equipment and right of use assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three and six months ended June 30, 2023 and 2022

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on June 30, 2023. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to

12

Table of Contents

unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.
Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term maturity of these instruments.

The carrying amount reported in the consolidated balance sheet as of June 30, 2023 for the convertible debt is its fair value. The principal amount of the convertible debt was $3,000,000 at June 30, 2023 and the fair value was approximately $2,844,000. The fair value of the debt was estimated using the Monte Carlo valuation method, which utilizes certain unobservable inputs. As a result, the fair value estimate represents a Level 3 measurement.

A roll forward of the carrying value of the convertible debt to June 30, 2023 is as follows:

Balance, December 31, 2022

Issued

Adjustment to fair value

Balance, June 30, 2023

Convertible debt at fair value

$

-

$

3,304,000

$

(460,000)

$

2,844,000

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in shareholders’ equity as a reduction of additional paid-in capital generated as a result of the offering.

13

Table of Contents

Revenue Recognition

The Company’s revenues include revenues generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

The Company also records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue From Contracts with Customers. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Certain amounts received from or billed to customers in accordance with contract terms are deferred and recognized as future performance obligations are satisfied. All amounts earned under contracts with customers other than sales-based royalties are classified as licensing revenue. Sales-based royalties under the Company’s license agreements would be recognized as royalty revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue.

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs.

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

14

Table of Contents

From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to the Company’s employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended restrictive legend. Stock compensation expense for equity-classified awards to non-employees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the six months ended June 30, 2023 and 2022 was estimated using the Black-Scholes option-pricing model and the following assumptions:

a dividend yield of 0%;
an expected life of 4 years;
volatility of 94% for 2023 and 87% for 2022; and
risk free interest rates of 3.48% for 2023 and ranging from 1.12% - 3.23% for 2022.

The fair value of each option grant made during the six months ended June 30, 2023 and 2022 was estimated on the date of each grant and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net loss. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company’s financials, with related translation adjustments reported as a cumulative translation adjustment (“CTA”), which is a component of accumulated other comprehensive income. During the three months ended June 30, 2023 and 2022, the Company recognized foreign currency transaction gains of $3,722 and $94,900, respectively, in the accompanying consolidated statements of operations. During the six months ended June 30, 2023 and 2022 the Company recognized a foreign currency transaction gain of $3,356 and a foreign currency transaction loss of ($13,393), respectively, in the accompanying consolidated statements of operations.

15

Table of Contents

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $1,161,197 and $1,154,935 from the sale of 2021 and 2020 New Jersey NOL carryforwards during the six months ended June 30, 2023 and 2022, respectively. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of income tax expense. There were no tax related interest and penalties recorded for the six months ended June 30, 2023 and 2022. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at June 30, 2023 or December 31, 2022.

Research and Development Incentive Income and Receivable

The Company recognizes other income from UK research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise (“SME”) research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME research and development tax relief program are recorded as a component of other income.

The research and development incentive receivable represents an amount due in connection with the above-described tax relief program. The Company has recorded a research and development incentive receivable of approximately $38,000 and $128,000 as of June 30, 2023 and December 31, 2022, respectively, in the consolidated balance sheets.

The following table shows the change in the UK research and development incentives receivable from December 31, 2022 to June 30, 2023:

    

Current

    

Long-Term

 

Total

Balance at December 31, 2022

 

$

104,198

$

24,114

$

128,312

UK research and development incentives, transfer

 

24,114

(24,114)

 

UK research and development incentives

12,232

12,232

Additional 2021 incentive earned

425

425

UK research and development incentives cash receipt

 

(104,422)

 

 

(104,422)

Foreign currency translation

 

969

 

410

R