UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended 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 ________________

Commission File Number: 001-39336

Aditxt, Inc.

(Exact name of registrant as specified in its charter)

Delaware		82-3204328
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

737 N. Fifth Street, Suite 200

Richmond, VA

23219

(Address of principal executive offices)

(Zip Code)

(650) 870-1200

(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 $0.001 per share		ADTX		The Nasdaq Stock Market LLC

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 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, a smaller reporting company, or 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 11, 2023, the registrant had 7,612,756 and 7,610,739 shares of common stock, $0.001 par value per share, issued and outstanding, respectively.

Table of Contents

INDEX		Page No.
Cautionary Note Regarding Forward-Looking Statements and Industry Data		ii

PART I FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	2
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

PART II OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39

Signatures		40

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

●

we have generated no significant revenue from commercial sales to date and our future profitability is uncertain;

●

if we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development, execute on our strategic M&A initiatives, commence our planned clinical trials and you will likely lose your entire investment;

●

our financial situation creates doubt whether we will continue as a going concern;

●

we may need to raise additional funding, which may not be available on acceptable terms, or at all;

●

even if we can raise additional funding, we may be required to do so on terms that are dilutive to you;

●

the regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of our future product candidates, if any;

●

we may encounter substantial delays in completing our clinical studies which in turn will require additional costs, or we may fail to demonstrate adequate safety and efficacy to the satisfaction of applicable regulatory authorities;

●

if our future pre-clinical development and future clinical Phase I/II studies are unsuccessful, we may be unable to obtain regulatory approval of, or commercialize, our product candidates on a timely basis or at all;

●

even if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product and the revenue that we generate from their sales, if any, may be limited;

●

adverse events involving our products may lead the FDA or applicable foreign regulatory agency to delay or deny clearance for our products or result in product recalls that could harm our reputation, business and financial results;

●

our technology is subject to licenses from LLU and Stanford (as defined below), each of which are revocable in certain circumstances, including in the event we do not achieve certain payments and milestone deadlines. Without these licenses, we may not be able to continue to develop our product candidates;

●

if we were to lose our CLIA certification or state laboratory licenses, whether as a result of a revocation, suspension or limitation, we would no longer be able to offer our assays (including our AditxtScore™ platform), which would limit our revenues and harm our business. If we were to lose, or fail to obtain, a license in any other state where we are required to hold a license, we would not be able to test specimens from those states;

●

our results of operations will be affected by the level of royalty and milestone payments that we are required to pay to third parties;

●

we face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do;

●

our technologies and products under development, and our business, may fail if we are not able to successfully commercialize them and ultimately generate significant revenues as a result;

●

customers may not adopt our products quickly, or at all;

●

COVID-19 may impact our business and operations;

●

the failure to obtain or maintain patents, licensing agreements and other intellectual property could materially impact our ability to compete effectively;

●

some of our intellectual property may be subject to “march-in” rights by the U.S. federal government;

●

we do not expect to pay dividends in the foreseeable future;

●

we have issued a significant number of restricted stock awards, restricted stock units, options and warrants and may continue to do so in the future. The vesting and, if applicable, exercise of these securities and the sale of the shares of common stock issuable thereunder may dilute your percentage ownership interest and may also result in downward pressure on the price of our common stock;

●

future sales or issuances of substantial amounts of our common stock, including, potentially as a result of future acquisitions or strategic transactions, could result in significant dilution;

●

while we have entered into an Asset Purchase Agreement with Cellvera Global, we cannot assure you that the transaction contemplated by the Asset Purchase Agreement will be consummated or, that if such transaction is consummated, that it will be accretive to stockholder value;

●

we have provided loans to Cellvera Global in the principal amount of $14.5 million, if we are unable to complete the transactions contemplated by the Asset Purchase Agreement, we cannot provide any assurance that we will be able to timely collect such amounts from Cellvera Global, if at all;

●

we may engage in future acquisitions or strategic transactions, including the transaction with Cellvera Global, which may require us to seek additional financing or financial commitments, increase our expenses and/or present significant distractions to our management;

●

exclusive forum provisions in our amended and restated certificate of incorporation and amended and restated bylaws.

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition, and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes, or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles, and surveys. Industry surveys, publications, consultant surveys, and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

References to Aditxt, Inc.

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Aditxt,” “we,” “us,” and “our” refers to Aditxt, Inc. and “our board of directors” refers to the board of directors of Aditxt, Inc.

iii

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ADITXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
	2023			2022
ASSETS
CURRENT ASSETS:
Cash	$	95,953		$	2,768,640
Accounts receivable, net		379,166			527,961
Inventory		1,018,493			950,093
Prepaid expenses		653,954			496,869
TOTAL CURRENT ASSETS		2,147,566			4,743,563

Fixed assets, net		2,104,114			2,318,863
Intangible assets, net		53,500			107,000
Deposits		287,265			355,366
Right of use asset - long term		2,701,338			3,160,457
Deferred issuance costs		-			50,000
TOTAL ASSETS	$	7,293,783		$	10,735,249

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	5,397,931		$	1,958,502
Notes payable, net of discount		2,615,946			-
Notes payable - related party		300,000			-
Financing on fixed assets		147,823			409,983
Deferred rent		179,302			188,581
Lease liability - current		1,102,779			1,086,658
TOTAL CURRENT LIABILITIES		9,743,781			3,643,724

Lease liability - long term		1,419,257			1,885,218

TOTAL LIABILITIES		11,163,038			5,528,942

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.001 par value, 3,000,000 shares authorized, zero shares issued and outstanding, respectively		-			-
Common stock, $0.001 par value, 100,000,000 shares authorized, 6,763,750 and 4,307,487 shares issued and 6,761,733 and 4,305,470 shares outstanding, respectively		6,764			4,307
Treasury stock, 2,017 and 2,017 shares, respectively		(201,605	)		(201,605	)
Additional paid-in capital		103,032,672			100,443,967
Accumulated deficit		(106,707,086	)		(95,040,362	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		(3,869,255	)		5,206,307

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	7,293,783		$	10,735,249

See accompanying notes to the condensed consolidated financial statements.

ADITXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
REVENUE
Sales	$	220,978		$	214,715		$	439,393		$	424,994
Cost of goods sold		185,738			174,858			364,047			362,929
Gross Profit		35,240			39,857			75,346			62,065

OPERATING EXPENSES
General and administrative expenses $107,156, $375,352, $381,471, and $827,337 in stock-based compensation, respectively		3,671,083			3,788,952			8,039,926			8,413,110
Research and development, includes $53,540, $154,237, $116,173, and $303,527 in stock-based compensation, respectively		484,835			1,187,920			1,872,376			2,616,302
Sales and marketing $2,532, $754,699, $5,035, and $754,699 in stock-based compensation, respectively		113,759			833,942			179,376			920,541
Total operating expenses		4,269,677			5,810,814			10,091,678			11,949,953

NET LOSS FROM OPERATIONS		(4,234,437	)		(5,770,957	)		(10,016,332	)		(11,887,888	)

OTHER EXPENSE
Interest expense		(1,285,031	)		(82,110	)		(1,483,523	)		(97,320	)
Interest income		343			6,007			9,417			20,047
Other income		-			-			-			58,960
Amortization of debt discount		(162,893	)		(2,946	)		(176,286	)		(2,946	)
Total other expense		(1,447,581	)		(79,049	)		(1,650,392	)		(21,259	)

Net loss before income taxes		(5,682,018	)		(5,850,006	)		(11,666,724	)		(11,909,147	)
Income tax provision		-			-			-			-

NET LOSS	$	(5,682,018	)	$	(5,850,006	)	$	(11,666,724	)	$	(11,909,147	)

Net loss per share - basic and diluted	$	(0.92	)	$	(6.42	)	$	(2.17	)	$	(13.21	)

Weighted average number of shares outstanding during the period - basic and diluted		6,177,857			911,213			5,374,826			901,468

See accompanying notes to the condensed consolidated financial statements.

ADITXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

	Preferred Shares Outstanding		Preferred Shares Par		Preferred B Shares Outstanding		Preferred B Shares Par		Common Shares Outstanding		Common Shares Par		Treasury Stock			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance December 31, 2022		-	$	-		-	$	-		4,305,470	$	4,307	$	(201,605	)	$	100,443,967		$	(95,040,362	)	$	5,206,307

Stock option and warrant compensation		-		-		-		-		-		-		-			59,964			-			59,964

Restricted stock unit compensation		-		-		-		-		-		-		-			111,187			-			111,187

Issuance of shares for vested restricted stock units		-		-		-		-		1,731		2		-			(2	)		-			-

Sale of common stock										338,513		339		-			506,677			-			507,016

Issuance of shares for services		-		-		-		-		187,000		187		-			168,113			-			168,300

Net loss		-		-		-		-		-		-		-			-			(5,984,706	)		(5,984,706	)

Balance March 31, 2023		-	$	-		-	$	-		4,832,714	$	4,835	$	(201,605	)	$	101,289,906		$	(101,025,068	)	$	68,068

Stock option and warrant compensation		-		-		-		-		-		-		-			59,964			-			59,964

SEC Form 10-Q filed by Aditxt Inc.