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 September 30, 2024

☐ 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: 001-40738

RENOVORX, INC.

(Exact name of registrant as specified in its charter)

Delaware		27-1448452
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4546 El Camino Real, Suite B1
Los Altos, California		94022
(Address of principal executive offices)		(Zip Code)

(650) 284-4433

(Registrant’s telephone number, including area code)

N/A

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

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 $0.0001 per share		RNXT		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of 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 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 November 7, 2024, the registrant had 24,001,339 shares of common stock, $0.0001 par value per share, outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION	1

Item 1. Financial Statements (unaudited)	1

Condensed Balance Sheets as of September 30, 2024, and December 31, 2023	1

Condensed Statements of Operations for the three and nine months ended September 30, 2024, and 2023	2

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2024, and 2023	3

Condensed Statements of Cash Flows for the nine months ended September 30, 2024, and 2023	5

Notes to the Unaudited Condensed Interim Financial Statements	6

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3. Quantitative and Qualitative Disclosures About Market Risk	26

Item 4. Controls and Procedures	26

PART II. OTHER INFORMATION	27

Item 1. Legal Proceedings	27

Item 1A. Risk Factors	27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3. Defaults Upon Senior Securities	29

Item 4. Mine Safety Disclosures	29

Item 5. Other Information	29

Item 6. Exhibits	30

SIGNATURES	31

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, or Form 10-Q (this “Report”), particularly in the sections captioned “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning 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”), that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. All statements other than present and historical facts and conditions contained in this Report, including statements regarding our future results of operations and financial position, business strategy, plans and our objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these terms or other comparable terminology. Actual events or results may differ from those expressed in these forward-looking statements, and these differences may be material and adverse. Forward-looking statements include, but are not limited to, statements about:

	●	the sufficiency of our existing cash, cash equivalents, and investments to fund our future operating expenses and capital expenditure requirements and our ability to operate as a going concern;

	●	our estimates regarding expenses, future revenue, anticipated capital requirements to fund our future operating expenses, and our need for additional financing;

	●	our financial performance;

	●	our anticipated use of our existing cash, cash equivalents, and investments;

	●	the ability of our clinical trials to demonstrate safety and efficacy of our product candidates and other positive results;

	●	the progress and focus of our current and future clinical trials and the timing of reporting of data from those trials;

	●	our continued reliance on third parties to conduct clinical trials of our product candidates and for the manufacture of our product candidates;

	●	the beneficial characteristics, safety, efficacy, and therapeutic effects of our product candidates;

	●	our ability to advance product candidates into and successfully complete clinical trials;

	●	our ability to further develop and expand our therapy platform, both to use different chemotherapeutic agents, to include new indications, or to market and sell our FDA-cleared catheter drug-delivery device, RenovoCath^®, on a standalone basis;

	●	enrollment timing and projections for our clinical trials and our expectations relating to the timing of the provision of updates on, data readouts for, and completion of our clinical trials;

	●	our ability to obtain and maintain regulatory approval of our product candidates and the timing or likelihood of regulatory filings and approvals, including our expectation to seek special designations, such as orphan drug designation, for our product candidates for various diseases;

	●	existing regulations and regulatory developments in the United States and other jurisdictions;

	●	our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and our potential and ability to successfully commercialize our product candidates and generate revenue;

	●	the implementation of our strategic plans for our business and product candidates;

	●	the expected potential benefits of strategic collaborations with third parties and our ability to attract collaborators with relevant and complementary expertise;

	●	our estimates of the number of patients in the United States who suffer from the diseases we target;

	●	our estimates of potential market opportunities and our ability to successfully realize these opportunities;

	●	the success of competing therapies that are or may become available;

	●	developments relating to our competitors and our industry, including competing product candidates and therapies;

	●	our plans relating to the further development and manufacturing of our product candidates, including for additional indications which we may pursue;

	●	our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

	●	the scope of protection we are able to establish and maintain for intellectual property rights, including our therapy platform and product candidates;

	●	our ability to successfully negotiate and enter into agreements with distribution, strategic and corporate partners;

	●	our potential and ability to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved;

	●	our ability to retain the continued service of our key personnel and to identify, hire, and then retain additional qualified personnel;

	●	our ability to maintain compliance with the continuing listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”); and

	●	our expectations regarding the impact of major domestic and geopolitical events on our business.

We have based the forward-looking statements contained in this Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section titled “Risk Factors” and elsewhere in this Report. These risks are not exhaustive. Other sections of this Report include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this Report relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Report or to conform such statements to actual results or revised expectations, except as required by law.

Unless the context otherwise indicates, “RenovoRx,” the “Company,” “we,” “our,” and “us” refer to RenovoRx, Inc., a Delaware corporation. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to the Company’s fiscal years ended in December and the associated quarters, months and periods of those fiscal years.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

RenovoRx, Inc.

Condensed Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

	September 30, 2024			December 31, 2023

Assets
Current assets:
Cash and cash equivalents	$	9,563		$	1,173
Prepaid expenses and other current assets		468			192
Deferred offering costs		-			101
Total assets	$	10,031		$	1,466

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	686		$	561
Accrued expenses		1,086			614
Total current liabilities		1,772			1,175
Common stock warrant liability		1,188			3,291
Total liabilities		2,960			4,466
Commitments and contingencies (Note 5)		-			-
Stockholders’ equity (deficit):
Convertible preferred stock, $0.0001 par value; 15,000,000 shares authorized as of September 30, 2024, and December 31, 2023, respectively; no shares issued and outstanding at September 30, 2024, and December 31, 2023		-			-
Common stock, $0.0001 par value, 250,000,000 shares authorized at September 30, 2024, and December 31, 2023; 24,001,339 and 10,693,580 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively		2			1
Additional paid-in capital		54,410			38,404
Accumulated deficit		(47,341	)		(41,405	)
Total stockholders’ equity (deficit)		7,071			(3,000	)
Total liabilities and stockholders’ equity (deficit)	$	10,031		$	1,466

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

RenovoRx, Inc.

Condensed Statements of Operations

(Unaudited)

(in thousands, except share and per share amounts)

	2024			2023			2024			2023
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Operating expenses:
Research and development	$	1,650		$	1,629		$	4,449		$	4,892
General and administrative		1,178			1,354			3,889			4,727
Total operating expenses		2,828			2,983			8,338			9,619
Loss from operations		(2,828	)		(2,983	)		(8,338	)		(9,619	)
Other income/(expenses), net:
Interest and dividend income		124			43			299			97
Change in fair value of common warrant liability		233			1,519			2,103			3,092
Transaction costs allocated to common warrant liability		-			-			-			(575	)
Total other income/(expenses), net		357			1,562			2,402			2,614
Net loss	$	(2,471	)	$	(1,421	)	$	(5,936	)	$	(7,005	)
Net loss per share, basic and diluted	$	(0.10	)	$	(0.13	)	$	(0.28	)	$	(0.69	)

Weighted-average shares of common stock outstanding, basic and diluted		24,940,746			10,693,080			21,325,695			10,154,914

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

RenovoRx, Inc.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share amounts)

	Shares		Amount		Shares		Amount		Capital		Loss		Deficit			Equity
	Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital		Loss		Deficit			(Deficit)
Balance — December 31, 2023		-	$	-		10,693,580	$	1	$	38,404	$	-	$	(41,405	)	$	(3,000	)
Issuance of common stock upon exercise of stock options		-		-		38,981		-		42		-		-			42
Proceeds from private placement offering, net of offering costs		-		-		6,133,414		1		5,377		-		-			5,378
Stock-based compensation expense		-		-		-		-		423		-		-			423
Net loss		-		-		-		-		-		-		(1,076	)		(1,076	)
Balance — March 31, 2024		-	$	-		16,865,975	$	2	$	44,246	$	-	$	(42,481	)	$	1,767
Issuance of common stock upon exercise of stock options		-		-		23,228		-		12		-		-			12
Issuance of restricted stock awards		-		-		120,000		-		-		-		-			-
Issuance of common stock upon the private placement offering		-		-		6,960,864		-		9,638		-		-			9,638
Stock-based compensation expense		-		-		-		-		244		-		-			244
Net loss		-		-		-		-		-		-		(2,389	)		(2,389	)
Balance — June 30, 2024		-	$	-		23,970,067	$	2	$	54,140	$	-	$	(44,870	)	$	9,272
Issuance of common stock upon exercise of stock options		-		-		31,272		-		15		-		-			15
Stock-based compensation expense		-		-		-		-		255		-		-			255
Net loss		-		-		-		-		-		-		(2,471	)		(2,471	)
Balance — September 30, 2024		-	$	-		24,001,339	$	2	$	54,410	$	-	$	(47,341	)	$	7,071

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

RenovoRx, Inc.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)

(in thousands, except share amounts)

	Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Equity
Balance — December 31, 2022		-	$	-		9,097,701	$	1	$	37,318	$	17		$	(31,173	)	$	6,163
Issuance of common stock upon exercise of stock options		-		-		3,547		-		6		-			-			6
Issuance of restricted stock awards		-		-		30,000		-		117		-			-			117
Stock-based compensation expense		-		-		-		-		244		-			-			244
Other comprehensive loss		-		-		-		-		-		(17	)		-			(17	)
Net loss		-		-		-		-		-		-			(3,257	)		(3,257	)
Balance — March 31, 2023		-	$	-		9,131,248	$	1	$	37,685	$	-		$	(34,430	)	$	3,256

Issuance of common stock upon the registered direct offering		-		-		1,000,000		-		-		-			-			-
Proceeds from private placement offering, net of offering costs and Issuance of common stock upon the registered direct offering		-		-		1,000,000		-		-		-			-			-
Issuance and exercise of pre-funded common warrants upon the registered direct offering		-		-		557,632		-		-		-			-			-
Issuance of common stock upon exercise of stock options		-		-		4,200		-		2		-			-			2
Stock-based compensation expense		-		-		-		-		257		-			-			257
Net loss		-		-		-		-		-		-			(2,327	)		(2,327	)
Balance — June 30, 2023		-	$	-		10,693,080	$	1	$	37,944	$	-		$	(36,757	)	$	1,188
Balance		-		-		10,693,080		1		37,944		-			(36,757	)		1,188
Stock-based compensation expense		-		-		-		-		239		-			-			239
Net loss		-		-		-		-		-		-			(1,421	)		(1,421	)
Balance — September 30, 2023		-	$	-		10,693,080	$	1	$	38,183	$	-		$	(38,178	)	$	6
Balance		-	$	-		10,693,080	$	1	$	38,183	$	-		$	(38,178	)	$	6

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

RenovoRx, Inc.

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)

	2024			2023
	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(5,936	)	$	(7,005	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		922			857
Change in fair value of common warrants classified as a liability		(2,103	)		(3,092	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(276	)		573
Deferred offering costs		101			(41	)
Accounts payable		125			(184	)
Accrued expenses		472			687
Net cash used in operating activities		(6,695	)		(8,205	)

Cash flows from investing activities:
Proceeds from sale of investments		-			2,032
Net cash provided by investing activities		-			2,032

Cash flows from financing activities:
Proceeds from private placement offering, net of offering costs		15,016			5,000
Proceeds from exercise of stock options		69			8
Net cash provided by financing activities		15,085			5,008
Net increase/(decrease) in cash and cash equivalents		8,390			(1,165	)
Cash and cash equivalents:
Beginning of period		1,173			4,391
End of period	$	9,563		$	3,226

Supplemental disclosure of non-cash financing activities:
Fair value of common warrant classified as a liability	$	1,188		$	1,908

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

RenovoRx, Inc.

Notes to the Unaudited Condensed Interim Financial Statements

1. Business and Principal Activities

Description of Business

RenovoRx, Inc. (the “Company,” “we,” “us,” “our” and similar terminology) was incorporated in the state of Delaware in December 2012 and operates from its headquarters in Los Altos, California. The Company is a life sciences company developing novel targeted oncology therapies and offering RenovoCath®, a novel U.S. Food and Drug Administration (“FDA)-cleared local drug delivery platform targeting high unmet medical needs.

The Company’s patented Trans-Arterial Micro-Perfusion (“TAMP™”) therapy platform is designed to ensure precise therapeutic delivery across the arterial wall near the tumor site to bathe the target tumor, while potentially minimizing a therapy’s toxicities versus systemic intravenous therapy. The Company’s novel approach to targeted treatment offers the potential for increased safety, tolerance, and improved efficacy, and its mission is to transform the lives of cancer patients by providing innovative solutions to enable targeted delivery of diagnostic and therapeutic agents.

The Company’s lead product candidate is a novel oncology drug-device combination product being investigated under a U.S. Investigational New Drug (“IND”) application that is regulated by the FDA’s 21 CFR 312 pathway. The investigational drug-device combination candidate utilizes RenovoCath, its FDA-cleared device, indicated for temporary vessel occlusion in applications including arteriography, preoperative occlusion, and chemotherapeutic drug infusion.

The intra-arterial infusion of the chemotherapy gemcitabine utilizing RenovoCath is currently being evaluated for the treatment of locally advanced pancreatic cancer (“LAPC”) by the Center for Drug Evaluation and Research (the drug division of FDA) in our ongoing Phase III TIGeR-PaC randomized multi-center clinical trial.

Liquidity and Capital Resources

From the Company’s inception through September 30, 2024, it has raised an aggregate of $59.2 million, primarily from private placements of convertible preferred stock, convertible debt securities, the issuance of securities in the Company’s August 2021 initial public offering (the “IPO”), the sale of common stock and common stock warrants and the exercise of common stock warrants and common stock options. After deducting underwriting discounts and commissions, placement agent fees and other offering expenses, the Company’s net offerings were $53.8 million. As of September 30, 2024, the Company had cash and cash equivalents of $9.6 million. As used herein, the term “common stock” refers to the Company’s common stock, par value $0.0001 per share.

The Company is in the pre-commercial stage and therefore has incurred significant losses and negative cash flows from operations since its inception. For the nine months ended September 30, 2024, the Company reported a net loss of $5.9 million and an accumulated deficit of $47.3 million and does not expect to generate positive cash flows from operations in the foreseeable future. The Company expects to incur significant and increasing losses until regulatory approval is granted for its first product candidate, RenovoGem™. Regulatory approval is not guaranteed and may never be obtained. The Company may also pursue other revenue-generating strategies such as licensing or collaboration agreements or marketing its proprietary catheter device on a standalone basis. No assurances can be made that the Company will pursue these strategies, and even if it does, there is a risk that the Company will be unable to generate revenue from such activities.

The Company believes it will be able to raise additional required capital through debt financings, private or public equity financings, license agreements, collaborative agreements or other arrangements with other companies, or other sources of financing. There can be no assurance that such financing will be available or will be at terms acceptable to the Company. The inability to raise capital as and when needed would have a negative impact on the Company’s liquidity, financial condition and its ability to pursue its business strategy. The Company will need to generate significant revenue to achieve profitability, and it may never do so.

On November 10, 2022, the Company filed an omnibus shelf registration statement on Form S-3 that provides for the aggregate offerings of up to $50.0 million of the Company’s securities subject to various limitations, including limited sales in any twelve-month period while the Company is subject to the “baby-shelf” rules. As of September 30, 2024, and subject to the baby-shelf limitations rules, the aggregate offerings would be up to $9.7 million. The Company has also filed a registration statement on Form S-1 to register the cash exercise of the Company’s outstanding IPO, underwriter and private warrants. Cash exercise of these outstanding warrants is only expected to occur (if at all) when the trading price of the common stock is in excess of the $10.80 per share exercise price of such outstanding warrants.

On April 3, 2023, the Company completed a registered direct offering (“RDO”) utilizing its shelf registration statement for the purchase and sale of 1,557,632 shares of common stock (or pre-funded common stock warrants) to a certain institutional investor. In a concurrent private placement, the Company issued to the investor unregistered common warrants to purchase up to 1,947,040 shares of common stock (the “April 2023 Warrant”). The aggregate gross proceeds from this offer were $5.0 million, and the net offering proceeds were $4.3 million after deducting placement agent fees and placement agent’s expenses of $0.4 million and other professional expenses of $0.3 million.

On January 26, 2024, the Company completed a private placement to 92 accredited investors with gross proceeds of $6.1 million before deducting placement agent fees and other offering expenses of approximately $0.7 million. In this private placement, the Company issued 6,133,414 shares of its common stock and common warrants to purchase up to an aggregate of 6,133,414 shares of common stock, which expire five years from the issuance date, January 26, 2024. In connection with such private placement, the Company entered into a placement agent agreement as additional compensation to the placement agent, and issued common warrants to purchase up to an aggregate of 511,940 shares of common stock (the “January 2024 PA Warrants”), which warrants expire five years from the issuance date. The significant majority of the warrants issued in this private placement have an exercise price of $0.99 per share. The warrants purchased by directors, officers, employees and consultants of the Company in this private placement have an exercise price of $1.22 per share.

On April 11, 2024, the Company completed another private placement offering to 172 accredited investors, issuing common stock, pre-funded warrants, Series A warrants, and Series B warrants. The aggregate gross proceeds from this offer were $11.1 million, and the net offering proceeds were $9.6 million after deducting placement agent fees of $1.3 million and other professional expenses of $0.2 million. In conjunction with the issuance of 6,960,864 shares of common stock, the Company bundled the offering with: (i) a pre-funded warrant exercisable for 951,500 shares of common stock at an exercise price of $0.0001 per share, with an unlimited term and immediate exercisability upon issuance, subject to specific beneficial ownership limitations; (ii) Series A warrants exercisable for 7,912,364 shares of common stock at $1.22 per share, valid for 5 years and immediately exercisable subject to customary adjustments and beneficial ownership limitations; (iii) Series B warrants exercisable for 3,956,182 shares of common stock at $1.22 per share, valid for 2 years and immediately exercisable subject to customary adjustments and beneficial ownership limitations, with the Company retaining the right to call these warrants under certain conditions. Additionally, as compensation to the placement agent, the Company issued warrants on the same date, to purchase up to an aggregate of 701,243 shares of common stock (the “April 2024 PA Warrants”) at $1.69 per share over a 5-year term, with provisions for cashless exercise if the shares are unregistered or no current prospectus is available for resale. The April 2024 PA Warrants become exercisable on October 11, 2024, subject to specific beneficial ownership limitations and customary adjustments.

The accompanying condensed interim financial statements have been prepared assuming that the Company will continue as a going concern and has reviewed the relevant conditions and events surrounding its ability to continue as a going concern including among others: historical losses, projected future results, negative cash flows from operations, including cash requirements for the upcoming year, funding capacity, net working capital, total stockholders’ equity and future access to capital. Based upon this review and the Company’s current financial condition and operating plans, the Company has concluded that these conditions raise substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these condensed interim financial statements.

As a result, the Company will require additional funding to support its continuing operations. Until such time, if ever, as the Company can generate product revenue through its commercialization strategy, the Company expects to finance its cash needs through private or public equity financings, debt financings and collaborations, licenses or other similar arrangements. The Company continues to attract potential investors on the novel approach of its TAMP therapy platform.

2. Summary of Significant Accounting Policies

Basis of Presentation and Unaudited Condensed Interim Financial Information

The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in unaudited condensed interim financial statements prepared in accordance with GAAP have been condensed or omitted. The unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal, recurring adjustments that are necessary to present fairly the Company’s results for the interim periods presented. The condensed balance sheet as of December 31, 2023, is derived from the Company’s audited financial statements. The results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

There have been no material changes to the significant accounting policies during the nine months ended September 30, 2024 from those previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 1, 2024 (the “2023 Annual Report”) other than the accounting policies adopted in connection with the Company’s private placement offerings and the September Common Warrants as follows.

In January and April of this year, the Company completed two private placement offerings issuing Common Stock, Pre-funded Common Warrants, Common Warrants and Placement Agent Warrants or (“PA Warrants”). The Company has applied the following accounting policies as it relates to each offering.

January 2024 Private Placement

The Company evaluated the Common Warrants and the PA Warrants issued in connection with the January offering in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Entity and concluded that the Common Warrants and the PA Warrants are freestanding financial instruments, meeting ASC 480’s criteria for legal detachment and separate exercisability from the Common Stock. The Common Warrants and PA Warrants are classified as equity, not liabilities, as they do not embody obligations for cash settlement or issuance of variable shares. The initial recognition involves recording proceeds in Additional Paid-In Capital (“APIC”) with issuance costs as contra-equity. For diluted Earnings Per Share (“EPS”), the treasury stock method applies, as the Warrants are dilutive but not participating securities before exercise, ensuring no impact on basic EPS until shares are issued.

April 2024 Private Placement

The Company evaluated the Pre-funded Common Warrants, Common Warrants, (Series A and Series B), and the PA Warrants issued in connection with the April offering in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Entity to determine whether the Common Warrants and PA Warrants qualify as freestanding financial instruments under ASC 480. The Company concluded that the Common Warrants and the PA Warrants both meet the criteria due to their legal detachment and separate exercisability from the issued Common Stock. The Common Warrants, while sold as a bundled Unit, are legally detachable and separately exercisable, allowing them to qualify as freestanding. The PA Warrants, issued independently as compensation, are also freestanding. Neither the Common Warrants or the PA Warrants are classified as liabilities under ASC 480, as they do not embody obligations for cash settlement or variable shares linked to external indexes or fixed monetary amounts. Under ASC 815-40, both Series A and B Warrants meet the criteria for equity classification, being indexed solely to the Company’s stock and possessing fixed-for-fixed settlement terms. The Company will record these warrants as APIC based on relative fair value and allocate issuance costs as contra-equity. The PA Warrants’ issuance cost will be treated similarly to a deemed distribution, with fair value calculated through the Black-Scholes model. For EPS, under ASC 260-10, Earnings Per Share, the Company will treat Pre-funded Warrants as equivalent to outstanding shares in basic EPS since they are exercisable for minimal consideration. Series A, Series B, and PA Warrants will be considered in diluted EPS under the treasury stock method if dilutive, as they are non-participating securities and do not impact basic EPS until exercised.

September 2024 Contract Manufacturing Organization Warrants

In September 2024, the Company has issued a warrant to purchase up to 709,500 shares of the Company’s common stock (the “CMO Warrant”) as a performance incentive for the Company’s RenovoCath contract manufacturing organization, (“CMO”). The CMO Warrant vests and only becomes exercisable over time in tranches, and only if the CMO achieves certain manufacturing milestones. The Company evaluated the CMO Warrant in accordance with ASC 718, Compensation – Stock Compensation, and concluded the CMO Warrant constitutes share-based payments for goods used in the Company’s operations and the CMO Warrant is equity-classified, as it lacks characteristics that would require liability treatment, such as cash settlement provisions or obligations to repurchase shares. The fair value of the CMO Warrant will be measured using the Black-Scholes model, with grant date fair value determined by the award terms. As the CMO Warrant is an incentive under the Company’s commercial strategy for its RenovoCath device, the fair value of the CMO Warrant will be considered as part of the costs to produce the device as inventory and subsequently recognized as cost of sales upon the sale of associated goods. For the EPS treatment, management concluded that the CMO Warrant constitutes contingently issuable potential common shares. When shares are issued upon exercise of the CMO Warrant, the Company will assess dilutive effects per ASC 260, Earnings Per Share. Following ASC 260-10-45-22, the treasury stock method will apply, assuming warrant exercise at the start of each period (or issuance if later), and calculating incremental shares based on proceeds hypothetically used to repurchase shares at the average market price. Since the holder of the CMO Warrant does not participate in dividends with common stock pre-exercise, the shares of common stock underlying the CMO Warrant does not affect basic EPS until exercised.

Risks and Uncertainties

The Company is subject to a number of risks associated with companies at a similar stage, including the risks associated with the development of products that must receive regulatory approval before market launch, dependence on key individuals, competition from larger and more established companies, volatility of the industry, ability to obtain adequate financing to support the Company’s business plan, the ability to attract and retain additional qualified personnel to manage the anticipated growth of the Company and general economic conditions. The Company is subject to a number of risks similar to other clinical-stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical studies or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain regulatory and marketing approvals and insurance coding for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, protection of its proprietary technology, and the need to secure and maintain adequate manufacturing arrangements with third parties.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses as well as the disclosure of contingent assets and liabilities, at the date of the financial statements during the reporting periods. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to, accruals of certain liabilities, including clinical trial accruals and other contingences, the valuation of financial instruments, the fair value of the Company’s common stock and the fair value of options granted under the Company’s equity incentive plan. On an ongoing basis, the Company evaluates its estimates, including those related to the fair values of assets, stock-based compensation, clinical trial accruals and other contingencies. Management bases its estimates on historical experience or on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from these estimates.

Emerging Growth Company and Smaller Reporting Company Status

The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from complying with new or revised financial accounting standards until private companies are required to comply with those standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards.

The Company is also a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act. If the Company is a smaller reporting company at the time the Company ceases to be an emerging growth company, the Company may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, the Company may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and, like emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional disclosures and disaggregation of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, “Improvement to income tax disclosures (Topic 740)”. ASU 2023-09 requires consistent categories and greater disaggregation of information in the income tax rate reconciliation as well as a disaggregation of taxes paid by jurisdiction for the income taxes paid. ASU 2023-09 is required to be adopted by the Company for annual periods beginning after December 15, 2024. Early adoption is permitted for annual consolidated financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of the ASU, but does not expect any material impact upon adoption.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” ASU 2023-07 is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses, as well as how the chief operating decision maker uses the reported measure(s) of segment profit or loss in assessing performance. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this new guidance on its financial statements and disclosures.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)” “ASU 2016-13”). The guidance represents a significant change in the accounting for credit losses model by requiring immediate recognition of management’s estimates of current expected credit losses. Under the prior model, losses were recognized only as they were incurred. The Company has determined that it has met the criteria of a smaller reporting company as of November 15, 2019. As such, ASU 2019-10, “Financial Instruments —Credit Losses (Topic 326)”, “Derivatives and Hedging (Topic 815)”, and “Leases (Topic 842)—Effective Dates” amended the effective date for the Company to be for reporting periods beginning after December 15, 2022. The Company adopted ASU 2016-13 on January 1, 2023 and the adoption had no significant impact to the Company’s condensed interim financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20)” and “Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (ASU 2020-06): Accounting for Convertible Instruments and Contracts in an Entity,” which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The updated guidance is effective on a prospective basis for annual reporting periods beginning after December 15, 2023 and for interim periods within those periods. The Company early adopted this guidance as of January 1, 2022 and the pronouncement did not have any material impact on the Company’s financial position or results of operations.

3. Fair Value Measurements

As of September 30, 2024, and December 31, 2023, the Company held $9.1 million and $0.9 million, respectively, in a money market account.

The following tables summarize the Company’s financial assets and liabilities, measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2024, and December 31, 2023 (in thousands):

	September 30, 2024
Assets	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	9,099	$	-	$	-	$	9,099
	$	9,099	$	-	$	-	$	9,099

Liabilities	Level 1		Level 2		Level 3		Total
Common stock warrant liability	$	-	$	-	$	1,188	$	1,188
	$	-	$	-	$	1,188	$	1,188

	December 31, 2023
Assets	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	905	$	-	$	-	$	905
	$	905	$	-	$	-	$	905

Liabilities	Level 1		Level 2		Level 3		Total
Common stock warrant liability	$	-	$	-	$	3,291	$	3,291
	$	-	$	-	$	3,291	$	3,291

There were no transfers between Level 1, Level 2 or Level 3 during the periods presented. The Company had no other financial assets or liabilities that were required to be measured at fair value on a recurring basis.

Assumptions Used in Determining Fair Value of Warrant

The terms of the April 2023 Warrant provide that in the event of certain fundamental transactions involving the Company, the warrant holder may require the Company to make a payment based on a Black-Scholes valuation of the April 2023 Warrant, using specified inputs. Therefore, the April 2023 Warrants are accounted for as liabilities.

The Company recorded the fair value of the April 2023 Warrant using the Monte Carlo simulation model. It is also required to revalue the April 2023 Warrant at each reporting date, with any changes in fair value recorded on the Company’s statement of operations. The valuation of the April 2023 Warrant is considered under Level 3 of the fair value hierarchy and influenced by the fair value of the underlying common stock.

The fair value of the warrants was measured using a combination of Black-Scholes option pricing and Monte Carlo Simulation models that take into consideration probability factors of the various outcomes related to the exercise terms of the warrants using the following inputs:

	September 30, 2024			December 31, 2023
Expected volatility		100% – 111	%		116% – 177	%
Expected term (years)		0 – 4.01			1.01 – 4.76
Risk-free interest rate		3.58% – 4.73	%		3.86% – 4.78	%
Dividend rate		–	%		–	%

Changes on Level 3 Liabilities Measured at Fair Value on a Recurring Basis

The following table reflects the change in the Company’s Level 3 liability associated with the April 2023 Warrant for the nine months ended September 30, 2024 (in thousands):


Fair value as of December 31, 2023	$	3,291
Change in fair value		(2,103	)
Fair value as of September 30, 2024	$	1,188

4. Accrued Expenses

The components of accrued expenses as of September 30, 2024, and December 31, 2023 are as follows (in thousands):

Schedule of Accrued Expenses

	September 30, 2024		December 31, 2023
Clinical trial	$	495	$	470
Employee benefits		568		75
Other		23		69
Total accrued expenses	$	1,086	$	614

5. Commitments and Contingencies

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the nine months ended September 30, 2024, and no material legal proceedings are subsequently outstanding or pending.

Guarantees and Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. As permitted under Delaware law and in accordance with its bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its officers and directors. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company is not currently aware of any indemnification claims. Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of September 30, 2024.

Operating Leases

The Company leases its headquarters in Los Altos, California under a month-to-month operating lease agreement. Rent expenses were $21,000 and $18,000 for the three months ended September 30, 2024, and 2023, respectively. Rent expenses were $62,000 and $55,000 for the nine months ended September 30, 2024, and 2023, respectively.

6. Equity Incentive Plan – Stock-Based Compensation Expense and Warrants

2021 Omnibus Equity Incentive Plan

On July 19, 2021, the Company’s Board of Directors adopted the RenovoRx, Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). The 2021 Plan, which became effective immediately prior to the closing of the IPO, initially reserved 2,185,832 shares of common stock, which included 10,832 shares of common shares reserved but unissued under the Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”). The Company’s 2013 Plan was terminated immediately prior to the closing of the IPO; however, shares subject to awards granted under the 2013 Plan will continue to be governed by the 2013 Plan. In accordance with the terms of the 2021 Plan, on January 1, 2024, the number of shares reserved and available for issuance increased by 320,807 shares.

A summary of the stock option activity for the nine months ended September 30, 2024 is as follows:

Summary of Stock Option Award Activity

	Number of Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		1,860,125		$	2.47		7.24	$	984
Granted		1,393,634		$	1.18		-	$	-
Exercised		(93,481	)	$	0.74		-	$	-
Forfeited		(334,371	)	$	1.97		-	$	-
Expired		(107,278	)	$	2.50		-	$	-
Outstanding as of September 30, 2024

SEC Form 10-Q filed by RenovoRx Inc.