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, 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: 001-15911

Imunon, Inc.

(Exact name of Registrant as specified in its charter)

Delaware

52-1256615

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

997 Lenox Drive, Suite 100,

Lawrenceville, NJ 08648

(Address of principal executive offices)

(609) 896-9100

(Registrant’s telephone number, including area code)

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

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

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		IMNN		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, a 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 (Check One):

	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 8, 2024, the Registrant had 14,400,889 shares of common stock, $0.01 par value per share, outstanding.

IMUNON, INC.

QUARTERLY REPORT ON

FORM 10-Q

TABLE OF CONTENTS

		Page(s)
PART I: FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023	3
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three Months Ended June 30, 2024 and 2023	7
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Six Months Ended June 30, 2024 and 2023	8
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35

Item 4.	Controls and Procedures	35

PART II: OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

SIGNATURES		38

Cautionary Note Regarding Forward-Looking Statements

This report includes “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”). All statements other than statements of historical fact are “forward-looking statements” for purposes of this Quarterly Report on Form 10-Q, including, without limitation, any projections of earnings, revenue or other financial items, any statements of the plans and objectives of management for future operations (including, but not limited to, pre-clinical development, clinical trials, manufacturing and commercialization), uncertainties and assumptions regarding any continuing impact of the COVID-19 pandemic on our business, operations, clinical trials, supply chain, strategy, goals and anticipated timelines, any statements concerning proposed drug candidates, potential therapeutic benefits, or other new products or services, any statements regarding future economic conditions or performance, any changes in the course of research and development activities and in clinical trials, any possible changes in cost and timing of development and testing, capital structure, financial condition, working capital needs and other financial items, and any statements of assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified using terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential” or “continue,” or the negative thereof or other comparable terminology. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business, and operations, we cannot guarantee that actual results will not differ materially from our expectations.

Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, including, but not limited to, the inherent uncertainty in the drug development process, our ability to raise additional capital to fund our planned future operations, our ability to obtain or maintain U.S. Food and Drug Administration (“FDA”) and foreign regulatory approvals for our drug candidates, our ability to enroll patients in our clinical trials, risks relating to third parties’ conduct of our clinical trials, risks relating to government, private health insurers and other third-party payers coverage or reimbursement, risks relating to commercial potential of a drug candidate in development, changes in technologies for the treatment of cancer, impact of development of competitive drug candidates by others, risks relating to intellectual property, volatility in the market price of our common stock, potential inability to maintain compliance with The Nasdaq Marketplace Rules and the impact of adverse capital and credit market conditions. These and other risks and assumptions are described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in other documents that we file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. All forward-looking statements speak only as of the date they are made, and we do not intend to update any forward-looking statements, except as required by law or applicable regulations. We operate in a highly competitive, highly regulated, and rapidly changing environment and our business is in a state of evolution. Therefore, it is likely that new risks will emerge, and that the nature and elements of existing risks will change, over time. It is not possible for management to predict all such risk factors or changes therein, or to assess either the impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors, or new or altered factors, may cause results to differ materially from those contained in any forward-looking statement.

Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, the “Company,” “Imunon,” “we,” “us,” and “our” refer to Imunon, Inc., a Delaware corporation and its wholly owned subsidiaries.

Trademarks

The Company’s brand and product names contained in this document are trademarks, registered trademarks, or service marks of Imunon, Inc. or its subsidiary in the United States (“U.S.”) and certain other countries. This document also contains references to trademarks and service marks of other companies that are the property of their respective owners.

PART I: FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

IMUNON, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

	June 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	5,306,568	$	5,838,566
Investment in debt securities - available for sale, at fair value		-		9,857,087
Advances and deposits on clinical programs and other current assets		2,339,773		2,545,051
Total current assets		7,646,341		18,240,704

Property and equipment (at cost, less accumulated depreciation and amortization)		625,028		751,906

Other assets:
Deferred income tax asset		-		1,280,385
Operating lease right-of-use assets, net		1,370,127		1,595,074
Deposits and other assets		50,000		50,000
Total other assets		1,420,127		2,925,459

Total assets	$	9,691,496	$	21,918,069

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(Continued)

	June 30, 2024			December 31, 2023
	(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable – trade	$	1,969,302		$	3,515,192
Other accrued liabilities		2,591,827			3,390,521
Operating lease liabilities - current portion		516,223			485,421
Total current liabilities		5,077,352			7,391,134

Operating lease liabilities - non-current portion		872,910			1,139,293
Total liabilities		5,950,262			8,530,427

Commitments and contingencies		-			–

Stockholders’ equity:

Preferred stock - $0.01 par value (100,000 shares authorized, and no shares issued or outstanding at June 30, 2024 and December 31, 2023)		-			–

Common stock - $0.01 par value (112,500,000 shares authorized; 9,400,911 and 9,399,811 shares issued at June 30, 2024 and December 31, 2023, respectively, and 9,400,889 and 9,399,789 shares outstanding at June 30, 2024 and December 31, 2023, respectively)		94,009			93,998
Additional paid-in capital		401,632,757			401,500,838
Accumulated other comprehensive loss		-			60,796
Accumulated deficit		(397,900,344	)		(388,182,802	)
Total stockholders’ equity before treasury stock		3,826,422			13,472,830

Treasury stock, at cost (22 shares at June 30, 2024 and December 31, 2023)		(85,188	)		(85,188	)
Total stockholders’ equity		3,741,234			13,387,642

Total liabilities and stockholders’ equity	$	9,691,496		$	21,918,069

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

(Unaudited)

	2024			2023			2024			2023
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2024			2023			2024			2023

Operating expenses:
Research and development	$	2,819,645		$	3,134,399		$	6,113,506		$	5,754,204
General and administrative		2,193,706			2,339,886			3,911,291			5,404,531
Total operating expenses		5,013,351			5,474,285			10,024,797			11,158,735

Loss from operations		(5,013,351	)		(5,474,285	)		(10,024,797	)		(11,158,735	)

Other income (expense):
Investment income, net		225,334			281,673			307,255			534,743
Interest expense on loan facility		-			(37,095	)		-			(197,080	)
Loss on extinguishment of debt		-			(329,158	)		-			(329,158	)
Total other income (expense), net		225,334			(84,580	)		307,255			8,505

Net loss	$	(4,788,017	)	$	(5,558,865	)	$	(9,717,542	)	$	(11,150,230	)

Net loss per common share
Basic and diluted	$	(0.51	)	$	(0.61	)	$	(1.03	)	$	(1.28	)

Weighted average shares outstanding
Basic and diluted		9,400,889			9,136,573			9,400,889			8,711,389

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	2024			2023			2024			2023
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2024			2023			2024			2023
Other comprehensive loss

Changes in:
Change in realized and unrealized gains (losses) on available for sale securities, net	$	(72,306	)	$	38,168		$	-		$	135,552

Net loss		(4,788,017	)		(5,558,865	)		(9,717,542	)		(11,150,230	)

Total comprehensive loss	$	(4,860,323	)	$	(5,520,697	)	$	(9,717,542	)	$	(11,014,678	)

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

(Unaudited)

	2024			2023
	For the Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:

Net loss	$	(9,717,542	)	$	(11,150,230	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		138,633			108,482
Amortization of right-of-use assets		224,947			272,675
Realized (gains and) losses, net, on investment securities		(61,983	)		136,257
Stock-based compensation		131,930			529,027
Realization of deferred income tax asset		1,280,385			1,567,026
Loss on extinguishment of debt		-			329,158
Amortization of deferred finance charges and debt discount associated with notes payable		-			55,122
Net changes in:
Accrued interest on investment securities		-			48,443
Advances, deposits, and other current assets		205,278			138,352
Accounts payable and accrued liabilities		(2,580,165	)		(2,811,064	)
Net cash used in operating activities		(10,378,517	)		(10,776,752	)

Cash flows from investing activities:
Purchases of investment securities		(57,174	)		(3,646,246	)
Proceeds from sale and maturity of investment securities		9,915,448			7,500,000
Purchases of property and equipment		(11,755	)		(211,412	)
Net cash provided by investing activities		9,846,519			3,642,342

Cash flows from financing activities:
Proceeds from sale of common stock equity, net of issuance costs		-			2,672,926
Payoff of the SVB loan and accrued end-of-term fees		-			(6,420,000	)
Net cash used in financing activities		-			(3,747,074	)

Net change in cash and cash equivalents		(531,998	)		(10,881,484	)
Cash and cash equivalents at beginning of period		5,838,566			17,492,841
Cash and cash equivalents at end of period	$	5,306,568		$	6,611,357

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	2024		2023
	For the Six Months Ended June 30,
	2024		2023
Supplemental disclosures of cash flow information:

Cash paid for:
Interest paid	$	-	$	(179,542	)

Non-cash investing and financing activities:
Recognition of operating lease right-of-use asset and liability	$	-	$	1,911,049

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023

	Shares		Amount		Capital		Shares		Amount			Income			Deficit			Equity
	Common Stock Outstanding				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Shares		Amount			Income			Deficit			Equity

Balance at April 1, 2024		9,400,911	$	94,009	$	401,470,148		22	$	(85,188	)	$	133,101		$	(393,112,327	)	$	8,499,743
Net loss		-		-		-		-		-			-			(4,788,017	)		(4,788,017	)
Realized and unrealized gains (losses), net, on investments securities		-		-		-		-		-			(133,101	)		-			(133,101	)
Stock-based compensation expense		-		-		162,609		-		-			-			-			162,609
Balance at June 30, 2024		9,400,911	$	94,009	$	401,632,757		22	$	(85,188	)	$	-		$	(397,900,344	)	$	3,741,234

	Common Stock Outstanding				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Shares		Amount			Income		Deficit			Equity

Balance at April 1, 2023		9,097,027	$	90,970	$	400,776,487		22	$	(85,188	)	$	123,877	$	(374,259,190	)	$	26,646,956
Balance		9,097,027	$	90,970	$	400,776,487		22	$	(85,188	)	$	123,877	$	(374,259,190	)	$	26,646,956
Net loss		-		-		-		-		-			-		(5,558,865	)		(5,558,865	)
Sale of equity through equity financing facilities, net of costs		154,976		1,550		197,012		-		-			-		-			198,562

Realized and unrealized gains (losses), net, on investments securities		-		-		-		-		-			38,168		-			38,168
Stock-based compensation expense		-		-		190,319		-		-			-		-			190,319
Balance at June 30, 2023		9,252,003	$	92,520	$	401,163,818		22	$	(85,188	)	$	162,045	$	(379,818,055	)	$	21,515,140
Balance		9,252,003	$	92,520	$	401,163,818		22	$	(85,188	)	$	162,045	$	(379,818,055	)	$	21,515,140

See accompanying notes to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

	Common Stock Outstanding				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Shares		Amount			Income			Deficit			Equity

Balance at January 1, 2024		9,399,811	$	93,998	$	401,500,838		22	$	(85,188	)	$	60,796		$	(388,182,802	)	$	13,387,642
Net loss		-		-		-		-		-			-			(9,717,542	)		(9,717,542	)
Issuance of common stock upon exercise of restricted options		1,100		11															11
Realized and unrealized gains (losses), net, on investments securities		-		-		-		-		-			(60,796	)		-			(60,796	)
Stock-based compensation expense		-		-		131,919		-		-			-			-			131,919
Balance at June 30, 2024		9,400,911	$	94,009	$	401,632,757		22	$	(85,188	)	$	-		$	(397,900,344	)	$	3,741,234

	Common Stock Outstanding				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Shares		Amount			Income		Deficit			Equity

Balance at January 1, 2023		7,436,219	$	74,362	$	397,980,023		22	$	(85,188	)	$	26,494	$	(368,667,825	)	$	29,327,866
Balance		7,436,219	$	74,362	$	397,980,023		22	$	(85,188	)	$	26,494	$	(368,667,825	)	$	29,327,866
Net loss		-		-		-		-		-			-		(11,150,230	)		(11,150,230	)
Sale of equity through equity financing facilities, net of costs		1,815,584		18,156		2,654,768		-		-			-		-			2,672,924
Issuance of common stock for restricted options		200		2		-		-		-			-		-			2
Realized and unrealized gains (losses), net, on investments securities		-		-		-		-		-			135,551		-			135,551
Stock-based compensation expense		-		-		529,027		-		-			-		-			529,027
Balance at June 30, 2023		9,252,003	$	92,520	$	401,163,818		22	$	(85,188	)	$	162,045	$	(379,818,055	)	$	21,515,140
Balance		9,252,003	$	92,520	$	401,163,818		22	$	(85,188	)	$	162,045	$	(379,818,055	)	$	21,515,140

See accompanying notes to the unaudited condensed consolidated financial statements.

IMUNON, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(UNAUDITED)

JUNE 30, 2024

Note 1. Business Description

Imunon, Inc. (“Imunon” or the “Company”) is a clinical-stage biotechnology company focused on advancing a portfolio of innovative treatments that harness the body’s natural mechanisms with the aim to generate safe, effective and durable responses across a broad array of human diseases, constituting a differentiating approach from conventional therapies. Imunon is developing its non-viral DNA technology across its modalities. The first modality, TheraPlas®, is developed for the coding of proteins and cytokines in the treatment of solid tumors where an immunological approach is deemed promising. The second modality, PlaCCine®, is developed for the coding of viral antigens that can elicit a strong immunological response. This technology may represent a promising platform for the development of vaccines in infectious diseases.

The Company’s lead clinical program, IMNN-001, is a DNA-based immunotherapy for the localized treatment of advanced ovarian cancer currently in Phase II development. IMNN-001 works by instructing the body to produce durable levels, within certain safety parameters, of powerful cancer-fighting molecules, such as interleukin-12 and interferon gamma, at the tumor site. Additionally, the Company initiated a first-in-human study of its COVID-19 booster vaccine (IMNN-101) in the second quarter of 2024. The Company will continue to leverage these modalities and to advance the technological frontier of plasmid DNA to better serve patients with difficult-to-treat conditions.

Note 2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. During the six months ended June 30, 2024, there have been no changes to the Company’s accounting policies. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for a fair presentation, have been included in the accompanying unaudited condensed consolidated financial statements. Operating results for the six months ended June 30, 2024 and 2023, are not necessarily indicative of the results that may be expected for any other interim period(s) or for any full year. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on March 28, 2024.

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Events and conditions arising subsequent to the most recent balance sheet date have been evaluated for their possible impact on the condensed consolidated financial statements and accompanying notes.

Going Concern Uncertainty.

Since inception, the Company has incurred substantial operating losses, principally from expenses associated with the Company’s research and development programs, clinical trials conducted in connection with the Company’s drug candidates, and applications and submissions to the U.S. Food and Drug Administration (“FDA”). The Company has not generated significant revenue and has incurred significant net losses in each year since inception. For the six months ended June 30, 2024, the Company had a net loss of $9.7 million and used $10.3 million to fund operations. As of June 30, 2024, the Company has incurred approximately $398 million of cumulative net losses. As of June 30, 2024, the Company had $5.3 million in cash and cash equivalents, short-term investments, and interest receivable to fund its operations.

On July 30, 2024, the Company entered into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering an aggregate of 5,000,000 shares of the Company’s common stock at an offering price of $2.00 per share for gross proceeds of $10.0 million before the deduction of placement agent fees and offering expenses. In a concurrent private placement (together with the registered direct offering) and also pursuant to the Securities Purchase Agreement, the Company agreed to issue to the purchasers unregistered warrants to purchase shares of common stock. The warrants have an exercise price of $2.00 per share and were exercisable immediately after issuance for a term of five and one-half years following the date of issuance. The closing of the registered direct offering and concurrent private placement occurred on August 1, 2024.

The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the U.S., the Russian invasion of Ukraine and the unrest in the Middle East. The Company continues to monitor its operating activities in light of these events, and it is possible that these events could result in a variety of risks to the business. The specific impact, if any, is not readily determinable as of the date of these condensed consolidated financial statements.

The Company has based its estimates on assumptions that may prove to be wrong. The Company may need to obtain additional funds sooner or in greater amounts than it currently anticipates. Potential sources of financing include strategic relationships, public or private sales of the Company’s shares or debt, the sale of the Company’s New Jersey net operating losses and other sources. If the Company raises funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of existing stockholders may be diluted.

The actual amount of funds the Company will need to operate is subject to many factors, some of which are beyond the Company’s control. These factors include the progress of research activities; the number and scope of research programs; the progress of preclinical and clinical development activities; the progress of the development efforts of parties with whom the Company has entered into research and development agreements; the costs associated with additional clinical trials of drug candidates; the ability to achieve milestones under licensing arrangements; the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and the costs and timing of regulatory approvals.

A fundamental component of the ability to continue as a going concern is the Company’s ability to raise capital as required, as to which no assurances can be provided. To address the additional funding requirements of the Company, management has undertaken the following initiatives:

	●	it has assessed its current expenditures and will be reducing the current spending requirements where necessary;

	●	it may pursue additional capital funding in the public and private markets through equity sales and/or debt facilities;

	●	it may pursue possible partnerships and collaborations; and

	●	it may pursue potential out licensing for its drug candidates.

The Company’s ability to continue as a going concern may depend on the Company’s ability to raise additional capital, attain further operating efficiencies, reduce expenditures, and, ultimately, to generate revenue. There are no assurances that these future funding and operating efforts will be successful. If management is unsuccessful in these efforts, the Company’s current capital is not expected to be sufficient to fund the Company’s operations for the next twelve months.

Note 3. New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued accounting pronouncements will not have a material impact on the Company’s consolidated financial position, results of operations, and cash flows, or do not apply to its operations.

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on the income tax disclosures within the condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company does not plan to early adopt and is currently evaluating this ASU to determine its impact on the Company’s disclosures.

Note 4. Net Loss per Common Share

Basic loss per common share is calculated based upon the net loss available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated after adjusting the denominator of the basic earnings per share computation for the effects of all dilutive potential common shares outstanding during the period. The dilutive effects of preferred stock, options and warrants and their equivalents are computed using the treasury stock method.

The total number of shares of common stock issuable upon exercise of warrants, stock option grants and equity awards were 1,532,530 and 1,248,524 shares for the six months ended June 30, 2024 and 2023, respectively. For the three-month and six-month periods ended June 30, 2024 and 2023, diluted loss per common share was the same as basic loss per common share as the other warrants, and equity awards that were convertible into shares of the Company’s common stock were excluded from the calculation of diluted loss per common share as their effect would have been anti-dilutive. The Company did not pay any dividends during the first six months of 2024 or 2023.

Note 5. Investment in Debt Securities- Available for Sale

Investments in debt securities- available for sale with a fair value of $0 and $9,857,087 as of June 30, 2024 and December 31, 2023, respectively, consisted of U.S. Treasury securities and corporate debt securities. These investments are valued at estimated fair value, with unrealized gains and losses reported as a separate component of stockholders’ equity in accumulated other comprehensive loss.

The Company reviews its debt securities classified as short-term investments on a regular basis for impairment. For debt securities in unrealized loss positions, the Company determines whether any portion of the decline in fair value below the amortized cost basis is due to credit-related factors if it neither intends to sell nor anticipates that it is more likely than not that it will be required to sell prior to recovery of the amortized cost basis. The Company considers factors such as the extent to which the market value has been less than the cost, any noted failure of the issuer to make scheduled payments, changes to the rating of the security and other relevant credit-related factors in determining whether or not a credit loss exists. During the first six months of 2024 and 2023, the Company did not recognize an allowance for credit-related losses on any of its investments.

A summary of the cost, fair value and maturities of the Company’s short-term investments is as follows:

	June 30, 2024				December 31, 2023
	Cost		Fair Value		Cost		Fair Value
Short-term investments
U.S. Treasury securities	$	-	$	-	$	9,796,291	$	9,857,087

	June 30, 2024				December 31, 2023
	Cost		Fair Value		Cost		Fair Value
Short-term investment maturities
Within 3 months	$	-	$	-	$	2,467,518	$	2,490,775
Between 3 and12 months		-		-		7,328,773		7,366,312
Total	$	-	$	-	$	9,796,291	$	9,857,087

The following table shows the Company’s investment in debt securities available for sale gross unrealized gains (losses) and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2024 and December 31, 2023. The Company has reviewed individual securities to determine whether a decline in fair value below the amortizable cost basis is other than temporary.

	June 30, 2024				December 31, 2023
Available-for-sale securities (all unrealized holding gains are less than 12 months at date of measurement)	Fair Value		Unrealized Holding Gains		Fair Value		Unrealized Holding Gains

Investments in debt securities with unrealized gains	$	-	$	-	$	9,857,087	$	60,796

Investment income, net, which includes net realized losses on sales of available-for-sale securities and investment income interest and dividends, is summarized as follows:

		2024		2023
	For the Three Months Ended June 30,
	2024		2023
Interest and dividends accrued and paid	$	89,884	$	314,845
Realized gains (losses) on investment in debt securities		135,450		(33,172	)
Investment income, net	$	225,334	$	281,673

		2024		2023
	For the Six Months Ended June 30,
		2024		2023
Interest and dividends accrued and paid	$	245,272	$	671,000
Realized gains (losses) on investment in debt securities		61,983		(136,257	)
Investment income, net	$	307,255	$	534,743

Note 6. Fair Value Measurements

FASB Accounting Standards Codification Section 820, Fair Value Measurements and Disclosures, establishes a three-level hierarchy for fair value measurements which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date;

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions that market participants would use in pricing an asset or liability.

Cash and cash equivalents, other current assets, accounts payable and other accrued liabilities are reflected in the condensed consolidated balance sheets at their approximate estimated fair values primarily due to their short-term nature. The fair values of securities available for sale are determined by relying on the securities’ relationship to other benchmark quoted securities and classified its investments as Level 1 items in both 2024 and 2023. There were no transfers of assets or liabilities between Level 1 and Level 2 and no transfers in or out of Level 3 during the six-month period ended June 30, 2024 or during the year ended December 31, 2023.

Assets and liabilities measured at fair value are summarized below.

	Total Fair Value		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:

Recurring items as of June 30, 2024
U.S. treasury obligations, available for sale	$	-	$	-	$	-	$	-

Recurring items as of December 31, 2023
U.S. treasury obligations, available for sale	$	9,857,087	$	9,857,087	$	-	$	-

Note 7. Other Accrued Liabilities

Other accrued liabilities at June 30, 2024 and December 31, 2023 include the following:

Schedule of Other Accrued Liabilities

	June 30, 2024		December 31, 2023
Amounts due to contract research organizations and other contractual agreements	$	714,000	$	1,442,659
Accrued payroll and related benefits		1,823,227		1,693,383
Accrued professional fees		34,600		234,479
Other		20,000		20,000
Total	$	2,591,827	$	3,390,521

Note 8. Notes Payable

The SVB Loan Facility

On June 18, 2021, the Company entered into a $10 million loan facility (the “SVB Loan Facility”) with Silicon Valley Bank (“SVB”). Imunon immediately drew down $6 million from the SVB Loan Facility and used the funds to retire all outstanding indebtedness with Horizon Technology Finance Corporation pursuant to a loan agreement entered into on June 27, 2018, under which the Company had drawn down $10 million and repaid $5 million in August 2020. Concurrently with this transaction, the Company used $6.0 million of other available funds to establish a restricted cash account which served as security for the SVB Loan Facility.

The SVB Loan Facility was in the form of money market secured indebtedness bearing interest at a calculated WSJ prime-based variable rate. A final payment equal to 3% of the total $10 million commitment amount was due upon maturity or prepayment of the SVB Loan Facility. There was no facility commitment fee, and no stock or warrants were issued to SVB. Payments under the loan agreement were interest only for the first 24 months after loan closing, followed by a 24-month amortization period of principal and interest through the scheduled maturity date.

In connection with the SVB Loan Facility, the Company incurred financing fees and expenses totaling $243,370 which was recorded and classified as debt discount and was amortized as interest expense using the effective interest method over the life of the loan. Also, in connection with the SVB Loan Facility, the Company was required to pay an end-of-term fee equal to 3.0% of the original loan amount at time of maturity. Therefore, these amounts totaling $300,000 were amortized as interest expense using the effective interest method over the life of the loan. During the six months ended June 30, 2023, the Company incurred interest expense of $197,080 and amortized $329,158, as interest expense for debt discounts and end-of-term fee in connection with the SVB Loan Facility.

On April 21, 2023, the Company repaid the outstanding principal balance, an early termination fee and the end-of-term charges in full satisfaction of the SVB Loan Facility.

During the six months ended June 30, 2023, the Company recorded a loss of $329,158 on the early termination of the SVB Loan Facility which represented the early termination fee and the end of the term fees, net of previously amortized interest expense totaling $334,212 on the date of its payoff.

Note 9. Stockholders’ Equity

On May 15, 2024, the Company filed with the SEC a shelf registration statement on Form S-3 (the “2024 Registration Statement”) for the offer and sale of up to $75 million of its securities. The 2024 Registration Statement was declared effective on May 22, 2024. The 2024 Registration Statement is intended to provide the Company with flexibility to raise capital in the future for general corporate purposes. However, the Company’s ability to offer and sell its securities in a primary offering on the 2024 Registration Statement is limited by General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount that the Company can offer to up to one-third of its public float during any trailing 12-month period. The Company would be no longer subject to the Baby Shelf Limitation if its public float exceeds $75 million.

At the Market Offering Agreement

On May 15, 2024, the Company amended the At the Market Offering Agreement, dated as of May 25, 2022 (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) as sales agent. Pursuant to the terms of the amended ATM Agreement, the Company may offer and sell, from time to time, through Wainwright, shares of the Company’s common stock having an aggregate offering price of up to $5,500,000. The Company intends to use the net proceeds from any offering under the amended ATM Agreement for general corporate purposes, including research and development activities, capital expenditures and working capital.

On July 30, 2024, the Company notified Wainwright that it was suspending its use of and terminating the “at the market offering” sales agreement prospectus (the “ATM Prospectus”), related to the potential issuance from time to time of the Company’s common stock pursuant to the ATM Agreement, by and between the Company and Wainwright. The Company will not make any sales of its securities pursuant to the ATM Agreement, unless and until a new prospectus supplement or a new registration statement is filed relating to the ATM Agreement. Notwithstanding the termination of the ATM Prospectus, the ATM Agreement remains in full force and effect.

The Company did not sell any shares of common stock under the ATM Agreement during the first six months of 2024. During the first six months of 2023, the Company sold 1,815,584 shares of common stock under the ATM Agreement for net proceeds of $2,672,924.

July 2024 Offering

On July 30, 2024, the Company entered into a Securities Purchase Agreement (the “July 2024 Purchase Agreement”) with certain institutional and accredited investors (each, a “Purchaser” and collectively, the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a registered direct offering, an aggregate of 5,000,000 shares of the Company’s common stock at an offering price of $2.00 per share for gross proceeds of $10.0 million before the deduction of placement agent fees and offering expenses. In a concurrent private placement (together with the registered direct offering, the “July 2024 Offering”) and also pursuant to the July 2024 Purchase Agreement, the Company agreed to issue to the Purchasers unregistered warrants (the “Warrants”) to purchase shares of its common stock. The closing of the July 2024 Offering occurred on August 1, 2024.

In connection with the July 2024 Offering, the Company entered into an engagement letter agreement with Wainwright, pursuant to which the Company agreed to pay Wainwright and any other placement agents for the July 2024 Offering a cash fee equal to 7% of the aggregate gross proceeds raised from the sale of the securities sold in the July 2024 Offering and reimburse the placement agent for certain of their expenses in an amount not to exceed $85,000. Brookline Capital Markets, a division of Arcadia Securities, LLC, acted as co-placement agent in the July 2024 Offering.

Pursuant to the July 2024 Purchase Agreement, the Purchasers purchased an aggregate of 5,000,000 shares of common stock and Warrants to purchase an aggregate of 5,000,000 shares of common stock at a purchase price of $2.00 per share and accompanying Warrant. The Warrants have an exercise price of $2.00 per share and became exercisable immediately after issuance for a term of five and one-half years following the date of issuance.

Note 10. Stock-Based Compensation

The Company has long-term compensation plans that permit the granting of equity-based awards in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, other stock awards, and performance awards.

At the 2018 Annual Stockholders Meeting of the Company held on May 15, 2018, stockholders approved the Imunon, Inc. 2018 Stock Incentive Plan (the “2018 Plan”). The 2018 Plan, as adopted, permits the granting of 180,000 shares of Imunon common stock as equity awards in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, other stock awards, performance awards, or in any combination of the foregoing.

	●	At the 2019 Annual Stockholders Meeting of the Company held on May 14, 2019, stockholders approved an amendment to the 2018 Plan whereby the Company increased the number of common stock shares available by 80,000 to a total of 260,000 under the 2018 Plan, as amended.
	●	At the 2020 Annual Stockholders Meeting of the Company held on June 15, 2020, stockholders approved an amendment to the 2018 Plan, as previously amended, whereby the Company increased the number of shares of common stock available by 166,667 to a total of 426,667 under the 2018 Plan, as amended.
	●	At the 2021 Annual Stockholders Meeting of the Company held on June 10, 2021, stockholders approved an amendment to the 2018 Plan, as previously amended, whereby the Company increased the number of shares of common stock available by 513,333 to a total of 940,000 under the 2018 Plan, as amended.
	●	At the 2023 Annual Stockholders Meeting of the Company held on June 14, 2023, stockholders approved an amendment to the 2018 Plan, as previously amended, whereby the Company increased the number of shares of common stock available by 1,030,000 to a total of 1,970,000 under the 2018 Plan, as amended.

The Company has issued stock awards to employees and directors in the form of stock options and restricted stock. Options are generally granted with strike prices equal to the fair market value of a share of Imunon common stock on the date of grant. Incentive stock options may be granted to purchase shares of common stock at a price not less than 100% of the fair market value of the underlying shares on the date of grant, provided that the exercise price of any incentive stock option granted to an eligible employee owning more than 10% of the outstanding stock of Imunon must be at least 110% of such fair market value on the date of grant. Only officers and key employees may receive incentive stock options.

Option and restricted stock awards vest upon terms determined by the Compensation Committee of the Board of Directors and are subject to accelerated vesting in the event of a change of control or certain terminations of employment. The Company issues new shares to satisfy its obligations from the exercise of options or the grant of restricted stock awards.

As of June 30, 2024, the Compensation Committee of the Board of Directors approved the grant of (i) inducement stock options (the “Inducement Option Grants”) to purchase a total of 294,751 shares of Imunon common stock and (ii) inducement restricted stock awards (the “Inducement Stock Grants”) totaling 91,350 shares of Imunon common stock. Each Inducement Option Grant has a weighted exercise price of $1.59 per share. Each Inducement Option Grant vests over three years, with one-third vesting on the one-year anniversary of the employee’s first day of employment with the Company and one-third vesting on the second and third anniversaries thereafter, subject to the new employee’s continued service relationship with the Company on each such date. Each Inducement Option Grant has a ten-year term and is subject to the terms and conditions of the applicable stock option agreement. Each of Inducement Stock Grant vested on the one-year anniversary of the employee’s first day of employment with the Company is subject to the new employee’s continued service relationship with the Company through such date and is subject to the terms and conditions of the applicable restricted stock agreement.

As of June 30, 2024, there was a total of 1,975,073 shares of Imunon common stock reserved for issuance under the 2018 Plan, which was comprised of 1,196,053 shares of Imunon common stock subject to equity awards previously granted under the 2018 Plan and the Company’s 2007 Stock Incentive Plan and 779,020 shares of Imunon common stock available for future issuance under the 2018 Plan. As of June 30, 2024, there was a total of 146,417 shares of Imunon common stock subject to outstanding inducement awards.

Total compensation cost related to stock options and restricted stock awards amounted to approximately $0.1 million and $0.5 million for the six-month periods ended June 30, 2024 and 2023, respectively. Of these amounts, approximately $0.1 million for the six-month periods ended June 30, 2024 and 2023 was charged to research and development, and $17,000 reversal and $0.4 million were charged to general and administrative expenses during the six-month periods ended June 30, 2024 and 2023, respectively.

A summary of stock option awards and restricted stock grants, inclusive of awards granted under the 2018 Stock Plan and Inducement Option Grants for the six-month periods ended June 30, 2024 is presented below.

	Stock Options					Restricted Stock Awards					Weighted Average
	Options Outstanding			Weighted Average Exercise Price		Non-vested Restricted Stock Outstanding			Weighted Average Grant Date Fair Value		Contractual Terms of Equity Awards (in years)
Equity awards outstanding at January 1, 2024		1,063,482		$	2.62		32,100		$	1.23

Equity awards granted		584,500		$	1.18		-		$	-

Equity Awards vested and issued		-			-		(2,100	)		1.30

Equity awards terminated		(305,512	)	$	1.73		-		$	-

Equity awards outstanding at June 30, 2024		1,342,470		$	2.19		30,000		$	1.23		8.7

Aggregate intrinsic value of outstanding equity awards at June 30, 2024	$	-

Equity awards exercisable at June 30 2024		789,297		$	2.87							8.4

Aggregate intrinsic value of equity awards exercisable at June 30, 2024	$	42,813

As of June 30, 2024, there was $0.4 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a period of three to four years. The weighted average grant date fair values of the stock options granted were $1.18 and $1.32 during the six-month periods ended June 30, 2024 and 2023, respectively.

The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model was originally developed for use in estimating the fair value of traded options, which have different characteristics from the Company’s stock options. The model is also sensitive to changes in assumptions, which can materially affect the fair value estimate. The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model:

	For the Six Months Ended June 30,
	2024			2023
Risk-free interest rate		4.31	%		3.72	%
Expected volatility		101.74 to 108.94	%		107.03 to 113.64	%
Expected life (in years)		9.0 to 10.0			9.0 to 10.0
Expected dividend yield		0.0	%		0.0	%

Expected volatilities utilized in the model are based on historical volatility of the Company’s stock price. The risk-free interest rate is derived from values assigned to U.S. Treasury bonds with terms that approximate the expected option lives in effect at the time of grant.

Note 11. Warrants

The following is a summary of all warrant activity for the six-month period ended June 30, 2024:

Summary of Warrant Activity

Warrants	Number of Warrants Issued		Weighted Average Exercise Price

Warrants outstanding at December 31, 2023		160,060	$	18.86

Warrants outstanding at June 30, 2024		160,060	$	18.86

Aggregate intrinsic value of outstanding warrants at June 30, 2024	$	-

Weighted average remaining contractual terms at June 30, 2024		1.7 years

Note 12. Leases

Lawrenceville, New Jersey Lease

In August 2023, the Company renewed its Lawrenceville office lease for a 24-month agreement for 9,850 square feet with monthly rent payments of approximately $22,983 to $23,394.

Huntsville, Alabama Lease

In January 2023, the Company renewed its Huntsville facility lease for a 60-month lease agreement for 11,420 square feet with monthly rent payments of approximately $28,550 to $30,903.

The following is a table of the lease payments and maturity of the Company’s operating lease liabilities as of June 30, 2024:


2024	$	314,270
2025		543,009
2026		362,976
2027		370,236
2028 and thereafter		30,903
Subtotal future lease payments		1,621,394
Less: imputed interest		(232,261	)
Total lease liabilities	$	1,389,133

Weighted average remaining life		3.10

Weighted average discount rate		9.98	%

For the three-month and six-month periods ended June 30, 2024, operating lease expense was $159,942 and $314,457, respectively, and cash paid for operating leases included in operating cash flows was $162,545 and $325,091, respectively.

For the three-month and six-month periods ended June 30, 2023, operating lease expense was $165,446 and $324,722, respectively, and cash paid for operating leases included in operating cash flows was $173,753 and $340,457, respectively.

Note 13. Commitments and Contingencies

In February 2021, a derivative shareholder lawsuit was filed against the Company, as the nominal defendant, and certain of its directors and officers as defendants in the U.S. District Court for the District of New Jersey, captioned Fidler v. Michael H. Tardugno, et al., Case No. 3:21-cv-02662. The plaintiff alleged breach of fiduciary duty and other claims arising out of alleged statements made by certain of the Company’s directors and/or officers regarding ThermoDox®. The Company believed it has meritorious defenses to these claims and vigorously contested this suit. In June 2024, the U.S. District Court issued an Order for Dismissal without prejudice for this derivative shareholder lawsuit.

Note 14. Related Party Transaction

On November 16, 2022 the Company entered into a convertible note purchase agreement with Transomic Technologies, Inc. (“Transomic”) whereby the Company purchased $375,000 of convertible notes secured by certain assets held by Transomic and warrants. Imunon purchased product from Transomic for research and development purposes – primarily delivery vectors for its vaccine program. As a result of this investment in Transomic, Imunon’s executive chairman, Mr. Michael Tardugno, was appointed to the Board of Directors of Transomic. The Company disclosed the notes receivable as a related party transaction. In December 2023, Transomic filed a formal certificate of dissolution of the company resulting in a complete write off of the convertible note and related warrants.

Note 15. Subsequent Events

The Company has evaluated its subsequent events from June 30, 2024, through the date these condensed consolidated financial statements were issued.

On July 30, 2024, the Company entered into the July 2024 Purchase Agreement with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering, an aggregate of 5,000,000 shares of the Company’s common stock at an offering price of $2.00 per share for gross proceeds of $10.0 million before the deduction of placement agent fees and offering expenses. In a concurrent private placement (together with the registered direct offering) and also pursuant to the July 2024 Purchase Agreement, the Company agreed to issue to the Purchasers Warrants to purchase shares of common stock. The closing of the July 2024 Offering occurred on August 1, 2024.

In connection with the July 2024 Offering, the Company entered into an engagement letter agreement with Wainwright, pursuant to which the Company agreed to pay Wainwright and any other placement agents for the July 2024 Offering a cash fee equal to 7% of the aggregate gross proceeds raised from the sale of the securities sold in the July 2024 Offering and reimburse the placement agents for certain of their expenses in an amount not to exceed $85,000. Brookline Capital Markets, a division of Arcadia Securities, LLC, acted as co-placement agent in the July 2024 Offering.

Pursuant to the July 2024 Purchase Agreement, the Purchasers purchased an aggregate of

SEC Form 10-Q filed by Imunon Inc.