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.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

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”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

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 ~~7(a)(2)(B)~~13(a) of the ~~Securities~~Exchange Act.~~[X]~~ ☐

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

As of ~~November 10, 2017, 92,950,096~~May 3, 2024, there were 250,816,164 shares of the registrant’s common stock, $0.0001 par value, ~~per share, were~~ outstanding.

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

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

~~STATEMENT OF STOCKHOLDER’S EQUITY~~Condensed Consolidated Statements of Stockholders’ Equity

~~Nine Months EndedSeptember 30, 2017~~(in thousands, except for share data)

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

Matinas BioPharma Holdings Inc. (“Holdings”) is a Delaware corporation formed in 2013. Holdings is the parent company of Matinas BioPharma, Inc. (“BioPharma”), and Matinas BioPharma Nanotechnologies, Inc. (“Nanotechnologies,” formerly known as Aquarius Biotechnologies, Inc.), its operating subsidiaries (“Nanotechnologies”, and together with “Holdings” and “BioPharma”, “the Company” ~~or “we” or “our” or “us”~~). The Company is a ~~development stage~~clinical-stage biopharmaceutical company with a focus on identifying and developing novel pharmaceutical products.

On January 29, 2015, we completed the acquisition of Nanotechnologies (the “2015 Merger”), a New Jersey-based, early-stage pharmaceutical company focused on the development of differentiated and orally delivered therapeutics based on a proprietary, lipid-based, drug delivery platform called “cochleate delivery technology.” Following the 2015 Merger, we are a clinical-stage biopharmaceutical company focused on identifying and developing safe and effective broad spectrum antifungal and anti-bacterial therapeutics for the treatment of serious and life-threatening infections, using our innovative lipid-crystal nano-encapsulation drug delivery platform.

On September 13, 2016, the Company completed the closing of an $8.0 million private placement equity financing. The Company sold to accredited investors an aggregate of 1,600,000 Series A Preferred Shares at a purchase price of $5.00 per share resulting in net proceeds of approximately $6.9 million. Each Series A Preferred Share is convertible into ten shares of common stock based on the current conversion price. For a detailed discussion of this transaction see Note F.

On January 13, 2017, the Company completed its tender offer to amend and exercise certain categories of existing warrants. Pursuant to the Offer to Amend and Exercise, an aggregate of 30,966,350 warrants were tendered by their holders and were amended and exercised in connection herewith. The gross cash proceeds from such exercises were approximately $13.5 million and the net cash proceeds after deducting warrant solicitation agent fees and other estimated offering expenses were approximately $12.7 million. For a detailed discussion of this transaction see Note D.

~~The accompanying financial statements have been prepared in conformity with generally accepted accounting principles.~~

The Company has experienced net losses and negative cash flows from operations each period since its inception. Through ~~September 30, 2017,~~March 31, 2024, the Company had an accumulated deficit of ~~approximately $47.6 million. The Company’s operations have been financed primarily through the sale of equity securities.~~$181,397. The Company’s net loss was $5,824for the ~~nine~~three months ended ~~September 30, 2017 and 2016 was approximately $11.9 million and $5.7 million, respectively.~~March 31, 2024.

The Company has been engaged in developing its lipid nanocrystal (“LNC”) platform delivery technology and a pipeline of associated product candidates, including MAT2203 and MAT2501, since 2011. To date, the Company has not obtained regulatory approval for any of its product candidates nor generated any revenue from ~~products~~product sales, and the Company expects to incur significant expenses to complete development of its product candidates. The Company may never be able to obtain regulatory approval for the marketing of any of its product candidates in any indication in the United States or internationally and there can be no assurance that the Company will generate revenues or ever achieve profitability.

~~Assuming~~If the Company obtains ~~FDA~~U.S. Food and Drug Administration (“FDA”) approval for one or more of its product candidates, ~~which the Company does not expect to receive until 2022 at the earliest,~~ the Company expects that its expenses will continue to increase once the Company reaches commercial launch. The Company also expects that its research and development expenses will continue to increase as it moves forward with additional clinical studies for its current product candidates and ~~developing~~development of additional product candidates. As a result, the Company expects to continue to incur substantial losses for the foreseeable future, and that these losses will be increasing.

To continue to fund its continued losses, on January 13, 2017, the Company completed a warrant tender offer, with gross cash proceeds of $13.5 million and net proceeds of approximately $12.7 million (see Footnote E for additional details). Additionally, the Company has entered into a Controlled Equity Offering^SMSales Agreement with Cantor Fitzgerald & Co. “Cantor” ( see Footnote C), which allows the Company, subject to certain limited restrictions and daily sales limits, to sell shares of common stock having an offering price of up to $30 million. Through October 19, 2017, the Company has sold approximately 871 thousand shares of common stock pursuant to the Controlled Equity Offering^SM~~Sales Agreement with Cantor raising over $1.1 million (see footnote C).~~

As of ~~September 30, 2017,~~March 31, 2024, the Company had cash and cash equivalents of ~~approximately~~ $ ~~9.0 million. We~~1,071, marketable debt securities of $7,039 and restricted cash of $250. In addition, on April 5, 2024, the Company completed a registered direct offering of its common stock, raising $9,250, net of fees and expenses (see Note 13). The Company does not believe the cash and cash equivalents and marketable debt securities on hand are sufficient to fund planned operations ~~through May 2018.~~beyond the next twelve months from the filing date of these financial statements. As a result, substantial doubt exists about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon control over its operating expenses, anticipated proceeds from future sales of common stock through its At-The-Market Sales Agreement (“ATM”) with BTIG, LLC. and securing additional financing. While the Company believes in the viability of ~~its~~this strategy ~~to raise additional funds,~~ and believes ~~that~~ the actions presently being taken by the Company provide the opportunity for it to continue as a going concern, there can be no assurance ~~that any~~the Company will be successful in its implementation. In particular, utilization of the ATM may not be viable due to market conditions and new financing ~~will~~may not be available on acceptable terms, or at all. These consolidated financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

As of September 30, 2017, the Company has sold approximately 506 thousand shares raising over $.6 million. From September 30, 2017 to filing approximately 365 thousand shares have been sold raising approximately $.5 million.

Through an internal Pricing Committee, the Company at various times, will establish selling criteria with Cantor based on minimum pricing and share volume. This criteria is based on the judgement of the Pricing Committee, there are no contractual minimums with regards to price or volume in the Sales Agreement.

The accompanying unaudited condensed consolidated financial statements include the consolidated accounts of Holdings and its wholly owned subsidiaries, BioPharma, and ~~Nanotechnologies, the operational subsidiaries of Holdings.~~Nanotechnologies. The accompanying unaudited condensed consolidated financial statements have been prepared ~~by the Company~~ in accordance with accounting principles generally accepted in the United States ~~of America~~ (“U.S. GAAP”) and reflect the operations of the Company and its ~~wholly-owned~~wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

~~These interim unaudited financial statements do not include all~~The Company’s significant accounting policies are described in Note 3 within the ~~information and footnotes required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited financial statements for the year ended December 31, 2016, which are~~Company’s Notes to Consolidated Financial Statements included in the ~~Form 10-K filed with the SEC~~Company’s Annual Report on March 31, 2017. In the opinion of management, the interim unaudited financial statements reflect all normal recurring adjustments necessary to fairly state the Company’s financial position and results of operations for the interim periods presented. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.

Operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for any future interim periods or for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, ~~2016.~~2023.

~~For~~The Company’s management has considered all recent accounting pronouncements issued and believes that these recent pronouncements will not have a ~~detailed discussion about~~material effect on the Company’s ~~significant accounting policies, see~~ financial statements.

Note C4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities

The Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable debt securities. Cash and cash equivalents consist of cash in bank checking and savings accounts, money market funds and short-term U.S. treasury bonds that mature within three months of settlement date.

The Company presents restricted cash with cash and cash equivalents in the Condensed Consolidated Statements of Cash Flows. Restricted cash at both March 31, 2024 and December 31, 2023 of $250 represents funds the Company is required to set aside as collateral, primarily for one of the Company’s operating leases.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the ~~consolidated financial statements~~total of the amounts in the ~~2016 Form 10-K. During the nine months ended September 30, 2017, there were no significant updates made to the Company’s significant accounting policies.~~Condensed Consolidated Statements of Cash Flows as of March 31, 2024, December 31, 2023, March 31, 2023 and December 31, 2022:

~~The Company’s financial instruments that are exposed to concentrations~~Schedule of ~~credit risk consist primarily of cash.~~ Cash, ~~balances are maintained principally at two major U.S. financial institutions~~Cash Equivalents and are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to regulatory limits. At all times throughout the nine months ended September 30, 2017, the Company’s cash balances exceeded the FDIC insurance limit. Restricted Cash

The Company has ~~not experienced any~~classified its investments in marketable debt securities as available-for-sale and as a current asset. The Company’s investments in marketable debt securities are carried at fair value, with unrealized gains and losses ~~in such accounts.~~

~~Deferred taxes~~included as a separate component of stockholders’ equity. Unrealized losses and gains are ~~provided~~classified as other comprehensive (loss)/income and costs are determined on a ~~liability method whereby deferred tax assets~~specific identification basis. Realized gains and losses from our marketable debt securities are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when,recorded in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates.

other income, net. The Company ~~adopted~~did not incur any realized gains and losses during the ~~provisions~~three months ended March 31, 2024 and 2023. For the three months ended March 31, 2024 and 2023, the Company recorded unrealized gains of ~~ASC 740-10~~$87 and ~~has analyzed its filing positions in jurisdictions where it may be obligated to file returns. The Company believes that its income tax filing position~~$229, respectively. As of March 31, 2024 and deductions will be sustained on an audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. TheDecember 31, 2023, the Company had ~~no accrual for interest or penalties~~net accumulated unrealized losses of $134 and $221, respectively.

The following tables summarize the Company’s marketable debt securities as of ~~September 30, 2017.~~March 31, 2024:

All debt securities classified as available-for-sale are due to mature within one year of March 31, 2024.

The following tables summarize the Company’s marketable debt securities as of December 31, 2023:

All debt securities classified as available-for-sale are due to mature within one year of December 31, 2023.

The Company uses the fair value hierarchy to measure the value of its financial instruments. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below:

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

The carrying amounts of cash equivalents, current portion of restricted cash, prepaid expenses and other current assets, accounts payable, current portion of lease liabilities and accrued expenses approximate fair value due to the short-term nature of these instruments.

A summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows:

U.S. treasury bonds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices for identical assets in active markets. Marketable debt securities consisting of U.S. government notes are classified as Level 2 and are valued using quoted market prices in markets that are not active.

Leasehold improvements and equipment, summarized by major category, consist of the following as of March 31, 2024 and December 31, 2023:

Depreciation and amortization expense for the three months ended March 31, 2024 and 2023 was $94 and $93, respectively.

Accrued Expenses, summarized by major category, as of March 31, 2024 and December 31, 2023 consist of the following:

The Company has various lease agreements, including leases of office space, a laboratory and manufacturing facility, and various equipment. Some leases include purchase, termination or extension options for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating and finance leases are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. The Company’s operating leases do not provide implicit rates, therefore the Company utilized a discount rate based on its incremental borrowing rate to record the lease obligations. The Company’s finance leases provide readily determinable implicit rates.

The Company incurred lease expense for its operating leases of $226 for each of the three month periods ended March 31, 2024 and 2023, respectively. The Company incurred amortization expense on its operating lease right-of-use assets of $145 and $132 for the three months ended March 31, 2024 and 2023, respectively.

The Company incurred interest expense on its finance leases of $1 for the three months ended March 31, 2024 and 2023. The Company incurred amortization expense on its finance lease right-of-use assets of $1 and $4 for the three months ended March 31, 2024 and 2023, respectively.

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of March 31, 2024:

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of December 31, 2023:

On April 8, 2022, the Company entered into the BioNTech Agreement to evaluate the combination of mRNA formats utilizing the Company’s proprietary LNC platform delivery technology. Under the terms of the BioNTech Agreement, the Company received an exclusivity fee in the amount of $2,750, and BioNTech SE funded certain of the Company’s research expenses that were incurred under the agreement. The term of the agreement began on the effective date and expired on April 8, 2023.

The $2,750 license fee was recorded as deferred revenue and was recognized over the term of the contract performance obligation period, which the Company concluded to be 12 months after the execution of the contract. The clinical research services were invoiced as service revenue was earned on a monthly basis during the term of the contract.

During the first quarter of 2023, $688 of the contract research revenue was recognized from the license fee and $375 was earned from the monthly clinical research services performed by the Company. As of March 31, 2023, the Company had recognized all of contract research revenue from the BioNTech Agreement.

On December 12, 2019, the Company entered into the Genentech Agreement which involves the development of oral formulations using the Company’s LNC platform delivery technology. Under the terms of the Genentech Agreement, Genentech paid the Company a total of $100 for the development of three molecules, or $33 per molecule, which is being recognized upon the Company fulfilling its obligations for each molecule under the Genentech Agreement. The Company recorded the upfront consideration as deferred revenue, which is included in accrued expenses on the consolidated balance sheets. As of December 31, 2022, the Company completed its obligations related to the first and second of the three molecules. During the three months ended March 31, 2023, the Company completed its obligations related to the remaining molecule.

For the three months ended March 31, 2024 and 2023, the Company sold 218,304 and 0, respectively, shares of its common stock under the ATM with BTIG, LLC.

As of March 31, 2024, the Company did not have any outstanding warrants to purchase shares of the Company’s common stock.

Basic and diluted net loss per ~~share is computed by dividing net loss available to~~ common ~~shareholders by~~share

During the ~~weighted average number of shares outstanding during the period. Diluted earnings~~three months ended March 31, 2024 and 2023, diluted loss per common share is the same as basic ~~earnings~~loss per common share because, as the Company incurred a net loss during each period presented, the potentially dilutive securities from the assumed exercise of all outstanding stock options ~~preferred stock~~ and warrants, would have an anti-dilutive effect. The following ~~schedule details the number~~outstanding shares of ~~shares issuable upon the exercise of stock options, warrants and conversion of preferred stock, which have been~~potentially dilutive securities were excluded from the computation of diluted net loss per share ~~calculation~~because including them would have been anti-dilutive as of March 31, 2024 and 2023:

Schedule of Anti-dilutive Securities Excluded from Computation of Earning Per Share

The following table summarizes the ~~inclusion would be anti-dilutive for~~changes in accumulated other comprehensive loss by component during the three ~~and nine month periods ended September 30, 2017 and 2016:~~

Goodwill is assessed for impairment at least annually on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. In accordance with the authoritative accounting guidance we have the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine this is the case, we are required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized, if any. If we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

As defined in the authoritative guidance, a reporting unit is an operating segment, or one level below an operating segment. Historically, we conducted our business in a single operating segment and reporting unit. In the period ended September 30, 2017, we assessed goodwill impairment by performing a qualitative test for our reporting unit. During our qualitative review, we considered the Company’s cash position and our ability to obtain additional financing in the near term to meet our operational and strategic goals and substantiate the value of our business. Based on the results of our assessment, it was determined that it is more-likely- than-not that the fair value of the reporting units are greater than their carrying amounts. There was no impairment of goodwill for the period ended September 30, 2017.

We review other intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. The authoritative accounting guidance allows a qualitative approach for testing indefinite-lived intangible assets for impairment, similar to the impairment testing guidance for goodwill. It allows the option to first assess qualitative factors (events and circumstances) that could have affected the significant inputs used in determining the fair value of the indefinite-lived intangible asset. The qualitative factors assist in determining whether it is more-likely-than-not (i.e. > 50% chance) that the indefinite-lived intangible asset is impaired. An organization may choose to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to calculating its fair value. Our indefinite-lived intangible assets are IPR&D intangible assets. In all other instances, we used the qualitative test and concluded that it was more-likely-than-not that all other indefinite-lived assets were not impaired and therefore, there were no impairments in period ended September 30, 2017.

Pursuant to the Certificate of Designations, the Series A Preferred Shares earn dividends at a rate of 8.0% once per year on the anniversary of the Initial Closing, payable to the holders of such Series A Preferred Shares in shares of common stock upon conversion. Dividends do not require declaration by the Board of Directors. Dividends are accrued annually as of the date the dividend is earned in an amount equal to the contractual rate of 8% of the stated value.

~~The Company records rent on a straight line basis. Differences between monthly rent expenses and rent payments are known asdeferred rents~~. Deferred rents are recorded in either an asset account (e.g., other current or noncurrent assets) when the cumulative difference between rent expenses and rent payments as of a balance sheet date is negative or a liability account (e.g., other current or noncurrent liabilities) when the cumulative difference is positive. Due to our escalating rents, the Company is currently recording a deferred rent liability.

~~In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2017-04,~~~~“Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”.~~The Board is issuing the amendments in this update to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We are required to apply the amendments in this for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We have evaluated this standard and believe it will not have a material impact on our consolidated financial position or results of operation.

~~In August 2016, the FASB issued ASU No. 2016-15, “~~~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”~~, which amended the existing accounting standards for the statement of cash flows. The amendments provide guidance on eight classification issues related to the statement of cash flows. The Company is required to adopt the guidance in the first quarter of 2018 and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company does not believe the adoption will have a material impact on the Company’s consolidated statements of cash flows.

~~In May 2014, the FASB issued ASU No. 2014-09, “~~~~Revenue from Contracts with Customers”~~. ASU 2014-09 represents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Partnership expects to be entitled to receive in exchange for those goods or services. This ASU sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed. In August 2015, the FASB issued ASU No. 2015-14, “~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”,~~which defers the effective date of ASU 2014-09 by one year, but permits companies to adopt one year earlier if they choose (i.e., the original effective date). As such, this ASU is effective for annual reporting periods beginning after December 15, 2017 for public companies and 2018 for private companies. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU. We do not believe that adoption of the standard for contract research revenue will have a material impact on our consolidated financial position or results of operation. We will continue our evaluation of ASU 2014-09, including how it may impact new arrangements we enter into as well as new or emerging interpretations of the standard, through the date of adoption. The Company will adopt the guidance in ASU 2014-09 as of January 1, 2018 and apply the modified retrospective approach.

In March 2016, the FASB issued ASU No. 2016-09, “Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for share–based payment award transactions. The ASU is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted. The Company has adopted this standard with an effective date January 1, 2017 which had an immaterial impact on our consolidated financial position or results of operation.

~~In February 2016, the FASB issued ASU No. 2016-02, “~~~~Leases~~”. The new standard will require most leases to be recognized on the balance sheet which will increase reported assets and liabilities. Lessor accounting remains substantially similar to current guidance. The new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2018, which for us is the first quarter of 2019 and mandates a modified retrospective transition method. We do not intend to early adopt and are currently assessing the impact of this update, but preliminarily believe that its adoption will not have a material impact on our consolidated financial statements.

~~The Company accounts for the beneficial conversion feature on its convertible preferred stock in accordance with ASC 470-20,~~~~Debt with Conversion and Other Options~~. The Beneficial Conversion Feature (“BCF”) of convertible preferred stock is normally characterized as the convertible portion or feature that provides a rate of conversion that is below market value or in-the-money when issued. We record a BCF related to the issuance of convertible preferred stock when issued. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

To determine the effective conversion price, we first allocate the proceeds received to the convertible preferred stock and then use those allocated proceeds to determine the effective conversion price. If the convertible instrument is issued in a basket transaction (i.e., issued along with other freestanding financial instruments), the proceeds should first be allocated to the various instruments in the basket. Any amounts paid to the investor when the transaction is consummated (e.g., origination fees, due diligence costs) represent a reduction in the proceeds received by the issuer. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible preferred stock on the proceeds allocated to that instrument. The effective conversion price represents proceeds allocable to the convertible preferred stock divided by the number of shares into which it is convertible. The effective conversion price is then compared to the per share fair value of the underlying shares on the commitment date.

The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid-in capital, resulting in a discount on the convertible preferred stock. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. The intrinsic value of the BCF is recognized as a deemed dividend on convertible preferred stock over a period specified in the guidance.

~~On January 13, 2017, the Company completed its tender offer to amend and exercise certain categories of existing warrants.~~

Pursuant to the Offer to Amend and Exercise, an aggregate of 30,966,350 Warrants were tendered by their holders and were amended and exercised in connection therewith for an aggregate exercise price of approximately $15.5 million, including the following: 3,750,000 Formation Warrants; 754,000 Merger Warrants; 7,243,750 2013 Investor Warrants; 500,000 Private Placement Warrants; 14,750,831 2015 Investor Warrants; 722,925 $2.00 Placement Agent (PA) Warrants (of which 721,987 were exercised on a cashless basis); 1,426,687 $1.00 PA Warrants (of which 1,424,812 were exercised on a cashless basis); and 1,818,157 $0.75 PA Warrants (of which 1,774,017 were exercised on a cashless basis). The gross cash proceeds from such exercises were approximately $13.5 million and the net cash proceeds after deducting warrant solicitation agent fees and other estimated offering expenses were approximately $12.7 million. Prior to the Offer to Amend and Exercise, the Company had 58,159,495 shares of common stock outstanding and warrants to purchase an aggregate of 40,255,234 shares of common stock. Immediately following the Offer to Amend and Exercise (after the effect of certain cash and cashless exercises), the Company issued in exchange for the warrants 29,666,782 common shares.

The Company considers the warrant amendment to be of an equity nature as the amendment allowed the warrant holder to exercise a warrant and receive a common share which represents an equity for equity exchange. Therefore, the change in the fair value before and after the modification of approximately $16.7 million will be treated as a change in additional paid in capital (APIC) as an inducement charge. The cash received upon exercise in excess of par is also accounted through APIC.

The Company retained Aegis Capital Corp. (“Aegis Capital”) to act as its Warrant Agent for the Offer to Amend and Exercise pursuant to a Warrant Agent Agreement. Aegis Capital received a fee equal to 5% of the cash exercise prices paid by holders of the warrants (excluding the placement agent warrants) who participated in the Offer to Amend and Exercise. In addition, the Company agreed to reimburse Aegis Capital for its reasonable out-of-pocket expenses and attorney’s fees, including a $35,000 non- accountable expense allowance.

~~Leasehold improvements and equipment, summarized by major category, consist of the following ($ in thousands) for the nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~year ended December 31, 2016:~~2023:

Depreciation and amortization expense for the three and nine months ended September 30, 2017 was approximately $31 thousand and $56 thousand, respectively. Depreciation and amortization expense for the three and nine months ended September 30, 2016 was approximately $15 thousand and $40 thousand, respectively.All components of accumulated other comprehensive income are net of tax.

On February 12, 2016, the Company entered in a new 36-month capital lease for lab equipment. On May 15, 2017, the Company entered into a second 36-month capital lease for lab equipment. The payments under the leases are accounted for as interest and payments under capital lease using 3-year amortization. During the three and nine months ended September 30, 2017 the Company recognized interest expense of approximately $823 and $2,873, respectively, associated with the lease payments.

In accordance with the Certificate of Incorporation, there are 10,000,000 authorized preferred shares at a par value of $ 0.001. In connection with the 2016 Private Placement, on July 26, 2016, the Company filed a Certificate of Designation (the “Certificate of Designations”) with the Secretary of the State of Delaware to designate the preferences, rights and limitations of the Series A Preferred Shares. Pursuant to the Certificate of Designations, the Company designated 1,600,000 shares of the Company’s previously undesignated preferred stock as Series A Preferred Stock. As of September 30, 2017, the Company had 1,507,858 shares of Series A Preferred Stock outstanding.

Each Series A Preferred Share is convertible at the option of the holder into such number of shares of the Company’s common stock equal to the number of Series A Preferred Shares to be converted, multiplied by the stated value of $5.00 (the “Stated Value”), divided by the Conversion Price in effect at the time of the conversion (the initial conversion price will be $0.50, subject to adjustment in the event of stock splits, stock dividends, and fundamental transactions). Based on the current conversion price, each share of the Series A Preferred Stock is convertible into ten shares of common stock. A fundamental transaction means: (i) our merger or consolidation with or into another entity, (ii) any sale of all or substantially all of our assets in one transaction or a series of related transactions, or (iii) any reclassification of our Common Stock or any compulsory share exchange by which Common Stock is effectively converted into or exchanged for other securities, cash or property. Each Series A Preferred Share will automatically convert into common stock upon the earlier of (i) notice by the Company to the holders that the Company has elected to convert all outstanding Series A Preferred Shares; provided however that in the event the Company elects to force automatic conversion pursuant to this clause (i), the conversion date for purposes of calculating the accrued Dividend (as defined below) is deemed to be July 29, 2019, which is the third anniversary of the Initial Closing, (ii) three years from the Initial Closing, (iii) the approval of the Company’s MAT2203 product candidate by the U.S. Food and Drug Administration or the European Medicines Agency (the “Regulatory Approval”) or (iv) the Regulatory Approval of the Company’s MAT2501 product candidate.

Each share of Series A Preferred Stock is convertible into shares of common stock, at any time at the option of the holder at a conversion price of $0.50 per share. On July 29, 2016, August 16, 2016, and September 12, 2016, the date of issuances of the Series A, the publicly traded common stock prices were $0.67, $0.70, and $1.00 per share, respectively.

Based on the guidance in ASC 470-20-20, the Company determined that a beneficial conversion feature exists, as the effective conversion price for the Series A preferred shares at issuance was less than the fair value of the common stock into which the preferred shares are convertible. A beneficial conversion feature based on the intrinsic value of the date of issuances for the Series A was approximately $4.4 million. The beneficial conversion amount of approximately $4.4 million was then accreted back to the preferred stock as a deemed dividend and charged to accumulated deficit as the conversion rights were 100% effective at the time of issuance in the third quarter of 2016.

Pursuant to the Certificate of Designations, the Series A Preferred Shares accrue dividends at a rate of 8.0% once per year on the anniversary date of the Initial Closing, payable and only payable to the holders of such Series A Preferred Shares in shares of common stock upon conversion. Dividends of approximately $608 thousand have been accrued as paid-in-kind through September 30, 2017 and approximately $ 5 thousand has been earned and converted into common stock at the election of the holders. The Series A Preferred Shares vote on an as converted basis with the Company’s common stock. Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of Series A Preferred Shares are entitled to (i) first receive distributions out of our assets in an amount per share equal to the Stated Value plus all accrued and unpaid dividends, whether capital or surplus before any distributions shall be made on any shares of common stock and (ii) second, on an as-converted basis alongside the common stock.

Pursuant to the Certificate of Designations, the liquidation value of a Series A Preferred Share is equal to the stated value of $5.00 per share (as adjusted for stock splits, stock dividends, combinations or other recapitalizations of the Series A Preferred Stock) plus any earned but unpaid dividends.

The Series A Preferred Shares include the right, as a group, to receive: (i) 4.5% of the net sales of MAT2203 and MAT2501, in each case from and after the date, respectively, such candidate has received FDA or EMA approval, subject in all cases to a respective to a cap of $ 25 million per calendar year, and (ii) 7.5% of the proceeds, if any, received by the Company in connection with the licensing or other disposition by the Company of MAT2203 and/or MAT2501 (“Royalty Payment Rights”), subject in all cases to a cap of $ 10 million per year. The royalty is payable so long as the Company has valid patents covering MAT2203 and MAT2501, as applicable. The Royalty Payment Rights are unsecured obligations of the Company. The royalty payment will be allocated to the holders based on their pro rata ownership of vested Series A Preferred Shares. The royalty rights that are part of the Series A Preferred Shares will vest, in equal thirds, upon each of the July 29, 2017, July 29, 2018, and July 29, 2019, which are the first, second and third anniversary dates of the Initial Closing, (each a “Vesting Date”); provided however, if the Series A Preferred Shares automatically convert into common stock prior to the 36 month anniversary of the initial closing, then the royalty rights that are part of the outstanding Series A Preferred Shares shall be deemed to be fully vested as of the date of conversion. Even if the Series A Preferred Shares are purchased after the initial closing, the vesting periods for the royalty rights that are part of the Series A Preferred Shares shall still be based on the Vesting Dates. During the first 36 months following the initial closing, the right to receive a royalty will follow the Series A Preferred Shares; after July 29, 2019, the royalty payment rights may be transferred separately from the Series A Preferred Stock subject to available exemption from registration under applicable securities laws. The Company believes that such rights are not separable free-standing instruments requiring bifurcation at the date of transaction. The Company may recognize a deemed dividend for the estimated fair value of the vested portion of the royalty rights in future periods. As of September 30, 2017, no accrual has been recorded for royalty payments as it is not probable at this time that any amount will be paid.

These Series A Preferred Shares are classified within permanent equity on the Company’s condensed consolidated balance sheet as they do not meet the criteria that would require presentation outside of permanent equity under ASC 480~~Distinguishing Liabilities from Equity~~.

~~As of September 30, 2017, the Company had outstanding warrants to purchase an aggregate of 5,961,269 shares of common stock at exercise prices ranging from $0.50 to $2.00 per share~~

The Warrants were exercisable immediately upon issuance and have a five-year term. The Warrants may be exercised at any time in whole or in part upon payment of the applicable exercise price until expiration of the Warrants. No fractional shares will be issued upon the exercise of the Warrants. The exercise price and the number of warrant shares purchasable upon the exercise of the Investor Warrants (as opposed to Placement Agent Warrants) are subject to adjustment upon the occurrence of certain events, which include stock dividends, stock splits, combinations and reclassifications of the Company capital stock or similar “organic changes” to the equity structure of the Company (see Warrant table below). Accordingly, pursuant to ASC 815, the warrants are classified as equity.

The Company may call the Warrants, other than the Placement Agent Warrants, at any time the common stock trades above $5.00 (for warrants issued in 2013) or above $ 3.00 (for warrants issued in 2015) for twenty (20) consecutive days following the effectiveness of the registration statement covering the resale of the shares of common stock underlying the Warrants, provided that the Warrants can only be called if such registration statement is current and remains effective at the time of the call and provided further that the Company can only call the Investor Warrants for redemption, if it also calls all other Warrants for redemption on the terms described above. The Placement Agent Warrants do not have a redemption feature. The Placement Agent warrants may be exercised on a “cashless” basis. Such term is a contingent feature and within the control of the Company, therefore does not require liability classification.

~~A summary of equity warrants outstanding as of September 30, 2017 is presented below, all of which are fully vested.~~

The Company’s Amended and cashless exercises of warrants, the Company received net cash proceeds of approximately $12.7 million from the warrants tendered on January 13, 2017 and approximately $2.1 million for warrants exercised outside the tender offer, for a total of approximately $14.8 million of proceeds in the first quarter. All warrants tendered in the second quarter were cashless warrants. No warrants were tendered in the third quarter.

~~In August 2013, the Company adopted the~~Restated 2013 Equity Compensation Plan (the “Plan”), which ~~provides~~expired on May 7, 2024, provided for the granting of incentive stock options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights. ~~Options under~~There were no significant modifications to the Plan ~~may be granted at prices not less than 100% of~~during the fair value of the shares on the date of grant as determined by the Board Committee. The Board Committee determines the period over which the options become exercisable subject to certain restrictions as defined in the Plan, with the current outstanding options generally vesting over three ~~years.~~ month periods ended March 31, 2024 and 2023. The term of the ~~options is no longer than ten years.~~Plan was for 10 years. The Company ~~currently has available 1,397,606 shares~~intends to adopt a new equity compensation plan at its 2024 Annual Meeting, pending shareholder approval.

The following table contains information about the Company’s stock plan at March 31, 2024:

Schedule of ~~common stock for issuance under the plan.~~Equtiy Compensation Plan by Arrangements

With the approval of the Board of Directors and majority Shareholders, effective May 8, 2014, the Plan was amended and restated. The amendment provides for an automatic increase in the number of shares of common stock available for issuance under the Plan each January (with Board approval), commencing January 1, 2015 in an amount up to four percent (4%) of the total number of shares of common stock outstanding on the preceding December 31st.

The Company recognized stock-based compensation expense (options and restricted share grants) in its condensed consolidated statements of operations as ~~follows ($ in thousands):~~follows:

As of March 31, 2024, total compensation costs related to unvested awards not yet recognized was $6,840 and ~~option grants~~the weighted-average periods over which the awards are expected to be recognized was 2.4 years.

The following table summarizes the activity for Company’ stock ~~option activity and related information for the period from December 31, 2016 to September 30, 2017 (number of~~ options ~~in thousands):~~

As of September 30, 2017, the number of vested shares underlying outstanding options was 7,881,492 at a weighted average exercise price of $2.22. The aggregate intrinsic value of in the-money options outstanding as of September 30, 2017 was approximately $4.0 million. The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price of $1.32 on September 30, 2017, and the exercise price of options, multiplied by the number of options. As of September 30, 2017, there was approximately $5.4 million of total unrecognized share-based compensation. Such costs are expected to be recognized over a weighted average period of approximately 0.86 years.

All options expire ten years from date of grant. Except for options granted to consultants, all remaining options vest entirely and evenly over three years. A portion of options granted to consultants vests over four years, with the remaining vesting being based upon the achievement of certain performance milestones, which are tied to either financing or drug development initiatives.

The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period, with the exception of options granted subject to a consulting agreement, whereby the option vesting period and the service period defined pursuant to the terms of the consulting agreement may be different. Stock options issued to consultants are revalued quarterly until fully vested, with any change in fair value expensed. The following weighted-average assumptions were used to calculate share based compensation for the three and nine months ended September 30, 2017 and 2016:

The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The Company uses the “simplified method” described in Staff Accounting Bulletin (SAB) 107 to estimate expected term of share option grants.

The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company has limited history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available.

~~The risk-free interest rate assumption is based on the U.S treasury instruments whose term was consistent with the expected term of the Company’s stock options.~~

The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the Company share-based compensation.

~~Prepaid expenses, summarized by major category, consist of the following for the nine months ended September 30, 2017 and year ended December 31, 2016.~~

~~The notes payable amount of $298 thousand ending in September 30, 2017 and $118 thousand ending on December 31, 2016, are the financing amounts related to the Company’s insurance policies.~~

On November 1, 2013, the Company entered into a 7-year lease for office space in Bedminster, New Jersey which commenced in June 2014, at a monthly rent of $12,723, increasing to approximately $14,200 per month toward the end of the term, May 2021.

On December 15, 2016, the Company entered into a 10 year, 3-month lease to consolidate our locations while expanding our laboratory and manufacturing facilities. The lease began in August 2017. The monthly rent started at approximately $43,000 and increases to approximately $64,000 in the final year. The rental payments total approximately $6.4 million over the life of the lease which is scheduled to end late 2027.

~~The Company records rent expense on a straight-line basis. Rent expense~~ for the three months ended September 30, 2017 and 2016 was approximately $141,000 and $63,000, respectively. Rent expense for the nine months ended September 30, 2017 and 2016 was approximately $317,000 and $188,000, respectively.March 31, 2024:

~~Listed below is a summary~~Schedule of ~~future minimum rental payments (including the remainder of 2017) as of September 30, 2017:~~Stock Option Activity

The Company was obligated to provide a security deposit of $300,000 to obtain the headquarter office lease space located in Bedminster, New Jersey. This deposit was reduced by $100,000 in 2016 and 2015 and will be reduced to $50,000 by yearend, as long asOn April 5, 2024, the Company ~~makes timely rental payments.~~closed a registered direct offering of 33,333,334 shares of its common stock and warrants to purchase up to an aggregate of 33,333,334 additional shares of common stock, at a combined purchase price of $0.30 per share and accompanying warrant. The company generated gross proceeds of approximately $10,000 and net proceeds of approximately $9,250, after deducting underwriting discounts and commissions and other offering expenses.

To obtain the laboratory and facility site located in Bridgewater, New Jersey, the Company was obligated to provide a security deposit of $586,000. This security deposit can be reduced $100,000 on each of the first three anniversaries of the rent commencement date which was August 1, 2017. On the fourth anniversary, it can be reduced another $86,000, with the balance over the remaining life of the lease.

On February 18, 2016, the Company entered into a Cooperative Research and Development Agreement (CRADA) with the National Institute of Allergy and Infectious Diseases to support NIH investigators in the conduct of clinical research to investigate the safety, efficacy, and pharmacokinetics of encochleated drug products in patients with fungal, bacterial, or viral infections at an annual funding of $200,000 per year for 3 years.

On November 10, 2016, the Company entered into a Cooperative Research and Development Agreement (CRADA) with the National Institute of Allergy and Infectious Diseases to support NIH investigators to acquire technical, statistical and administrative support for research activities as well as to pay for supplies and travel expenses for a total amount of $132,568 paid in 4 equal quarterly installments beginning in the fourth quarter 2016 and each quarter during 2017.

Through the 2015 Merger, we acquired a license from Rutgers University, The State University of New Jersey (successor in interest to the University of Medicine and Dentistry of New Jersey) for the cochleate delivery technology. The Amended and Restated Exclusive License Agreement between Nanotechnologies and Rutgers provides for, among other things, (1) royalties on a tiered basis between low single digits and the mid-single digits of net sales of products using such licensed technology, (2) a one-time sales milestone fee of $100,000 when and if sales of products using the licensed technology reach the specified sales threshold and (3) an annual license fee of initially $10,000, increasing to $50,000 over the term of the license agreement.

On September 12, 2016, the Company conducted a final closing of a private placement offering to accredited investors shares of the Company’s Series A Preferred Stock. As part of this offer, the investors received royalty payment rights if and when the Company generates sales of MAT2203 or MAT2501. Pursuant to the terms of the Certificate of Designations of Preferences, Rights and Limitations (the “Certificate of Designations”) for our outstanding Series A Preferred Stock, we may be required to pay royalties of up to $35 million per year. If and when we obtain FDA or EMA approval of MAT2203 and/or MAT2501, which we do not expect to occur before 2021, if ever, and/or if we generate sales of such products, or we receive any proceeds from the licensing or other disposition of MAT2203 or MAT2501, we are required to pay to the holders of our Series A Preferred Stock, subject to certain vesting requirements, in aggregate, a royalty equal to (i) 4.5% of Net Sales (as defined in the Certificate of Designations), subject in all cases to a cap of $25 million per calendar year, and (ii) 7.5% of Licensing Proceeds (as defined in the Certificate of Designations), subject in all cases to a cap of $10 million per calendar year. The Royalty Payment Rights will expire when the patents covering the applicable product expire, which is currently expected to be in 2033.

On June 1, 2017, the Company entered into an agreement with Medpace, a clinical research organization, to provide services in a Phase II clinical trial. The overall cost is estimated to be $1.4 million through August 2018.

The Company has entered into two lab equipment leases. A 36 month lease ending June, 2019 with payments totaling $ 31 thousand. The second is a 60 month lease ending in May, 2022 with payments totaling $ 49 thousand. Each lease allows for a dollar buy out of the equipment.

The Company also has employment agreements with certain employees which require the funding of a specific level of payments, if certain events, such as a change in control, termination without cause or retirement, occur.

Item 2. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly ~~Report.~~Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2023 and in other reports we file with the Securities and Exchange Commission, particularly those under “Risk Factors.” Dollars in tabular format are presented in thousands, except per share data, or otherwise indicated.

This report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as ~~amended~~.amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future.

There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward- looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith, and we believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.

We are a clinical-stage biopharmaceutical company focused on ~~developing innovative anti-infectives for orphan indications. Our product and development candidates are derived~~delivering groundbreaking therapies using our ~~unique and proprietary lipid-crystal nano-particle, or cochleate, formulation~~lipid nanocrystal (LNC) platform delivery ~~technology. Our proprietary cochleate delivery~~ technology ~~platform, licensed from Rutgers University on~~(LNC Platform). We are seeking to develop an ~~exclusive worldwide basis, nano-encapsulates drugs~~internal pipeline of products utilizing the LNC Platform to successfully encapsulate small molecules and ~~is designed to make these drugs orally bioavailable, well tolerated~~small oligonucleotides and ~~safer and less toxic while providing~~facilitate targeted and ~~safe~~extrahepatic delivery ~~of pharmaceuticals directly~~ to the site of infection or inflammation. We believe our cochleate technology provides us with an efficient and broadly applicable drug delivery platform, with particular utility in diseases and conditions in which the immune system plays a significant modulation role and where the immune system facilitates the active transportdesired cell tissues without toxicity.

Key elements of our ~~lipid crystal nano-particles throughout the body.~~strategy include:

Currently, we are focused on the anti-infective market and on drug candidates which we believe demonstrate the value and innovation associated with our unique cochleate delivery platform technology while potentially providing significant health economic benefit to the health care system. We believe initially focusing on the anti-infective market has distinct advantages for the development of products which meet significant unmet medical need, including:

	●	a current regulatory environment which provides small development and clinical stage companies incentives such as significant periods of regulatory marketing exclusivity and opportunities to reduce development cost and timeline to market for anti- infective drug candidates;

	●	~~traditional high correlation between efficacy and safety data in preclinical animal models and the outcome of human clinical trials with anti-infective product candidates;~~

	●	attractive commercial opportunities for anti-infective product differentiated in safety profile, mode of action and oral bioavailability positioned against current therapies with significant side effects, or drug to drug interactions, limited efficacy and intravenous delivery resulting in lack of convenience, compliance and at a significant burden to the cost of healthcare; and

	●	~~an ability to commercialize anti-infective products with a focused and cost-efficient sales and marketing organization.~~

~~MAT2203~~For the three month periods ended March 31, 2024 and ~~MAT2501~~

~~We have leveraged~~2023, our platform cochleate delivery technology to develop two clinical-stage products that we believe have the potential to become best-in-class drugs. Our lead product candidate MAT2203 is an orally-administered cochleate formulation of a broad spectrum anti-fungal drug called amphotericin B. We are initially developing MAT2203 for the prevention of invasive fungal infections (IFIs) due to immunosuppressive therapy, as well as for the treatment of serious fungal infections.

In early June 2017, we reported interim data from the NIH-Conducted Phase 2a Clinical Study of Orally-Administered MAT2203 for the Treatment of Chronic Refractory Mucocutaneous Candidiasis. At that time, two out of the two patients with long-standing azole resistant mucocutaneous candidiasis met the primary endpoint of the Phase 2a study, achieving ≥ 50% clinical response with treatment of MAT2203. Patient #01 achieved a 57% reduction in clinical symptoms after 8 weeks on therapy while patient #02 achieved an 85% reduction in such clinical symptoms after 6 weeks of treatment. MAT2203net loss was ~~well tolerated with majority of adverse events observed being mild in severity~~$5,824 and mostly unrelated to study drug. Importantly, for both patients renal and liver function parameters remained well within normal ranges during the core study as well as during the first 6-month extension of this study. In July 2017, the NIH/NIAID institutional review board approved continuation of treatment of patients in the study-extension for an additional 6 months, for total extension of up to one year.

In late June 2017, we announced the topline data from our Phase 2 study in Vulvovaginal Candidiasis (VVC) using MAT2203. In the context of our overall program for MAT2203 with the aim to develop our lead product for the prevention of invasive fungal infections in patients who are immunocompromised due to immunosuppressive therapy, our goal was, in addition to further establishing the safety and tolerability of MAT2203, to demonstrate efficacy of MAT2203 through a mechanism involving systemic absorption in a non-life threatening fungal infection. This study concept is consistent with early human efficacy studies in the development of other anti- fungal therapies. This Phase 2 study was not designed or powered to support an indication for the treatment of VVC and therefore supplant fluconazole as the standard of care. While we were advised to utilize fluconazole as the standard of care in VVC as an active control as part of the study design, comparison to fluconazole in the treatment of VVC is of limited relevance given our ultimate development goals for MAT2203 in uses where fluconazole is contraindicated or inferior. The key data generated from this study includes additional safety and tolerability data as well as evidence of systemic absorption and distribution resulting in efficacy reflected by dose response effects and improvement in disease severity scores.

In this VVC study, we met the primary endpoint and were able to demonstrate that oral delivery of encochleated amphotericin B is safe and well tolerated without the severe kidney and liver toxicities typically seen with administration of intravenous amphotericin B. Drug-related treatment emergent adverse events in this study were mostly of mild and gastro-intestinal nature and were seen at a rate of 20%, 18% and 2% respectively for MAT2203 200mg, MAT2203 400mg, and fluconazole. Consistent with the safety observations in the NIH study, in this VVC study no drug-related effects on liver function were observed and kidney function parameters stayed within normal ranges during the entire study for all 91 patients treated with MAT2203 for 5 days.

Following our announcement of topline data in late June 2017, we continued to receive data from the study in the following weeks and also were able to more fully analyze the complete data set in light of our overall development objectives for MAT2203. In this particular study, 137 patients with moderate-to-severe VVC were randomized to MAT2203 200mg (46 patients), MAT2203 400mg (45 patients), or fluconazole (46 patients), with a respective disease score of 10.9, 10.0, and 10.8 established as the composite score of six disease severity attributes, which were each scored as 0, 1, 2, or 3. On day five after initiation of treatment, the disease severity score had declined significantly for all three treatment groups with approximately 60% reduction for both MAT2203 treatment groups and 80% for the fluconazole group. On day twelve after initiation of treatment (the test of cure visit), treatment severity score had further declined for all three treatment groups with approximately 80% reduction for both MAT2203 treatment groups (mean scores of 2.2 and 1.8 respectively for the 200mg and 400mg dose groups) and 94% for the fluconazole group (mean score of 0.5).

On the more stringent criterion of clinical cure (the primary evaluation endpoint in the most recent FDA guidance on the treatment of VVC), the clinical cure rates for MAT2203 200mg, MAT2203 400mg, and fluconazole in the modified intent-to-treat (mITT) population were 52%, 55%, and 75%$5,513, respectively. In the larger population of all randomized patients based on clinical diagnosis by the KOH method, the clinical cure rates for MAT2203 200mg, MAT2203 400mg, and fluconazole were 57%, 64%, and 76% respectively. Finally, in the per-protocol (PP) population, the clinical cure rates for MAT2203 200mg, MAT2203 400mg, and fluconazole were 52%, 65%, and 75% respectively. This additional data analyses revealed a consistent trend of a better cure rate with the MAT2203 400mg dose group as compared to the 200mg dose group, importantly indicating a dose-response effect.

Furthermore, in evaluating the criterion of eradication rate for both doses of MAT2203 studied, there appears to be a more rapid onset of the eradication effect in the modified intent to treat (mITT) population on day-5 after treatment initiation with the MAT2203 400mg dose group (13%) as compared to the 200mg dose group (4%), again indicating a dose-response effect.

Considering the data generated from the VVC study contrasted with the data from our ongoing NIH Phase 2 study, it appears that both higher doses and longer duration of therapy, which yielded a significant clinical response in the immunocompromised patients in the NIH study, could be important factors in demonstrating additional efficacy in mucosal candidiasis, especially with respect to eradication. Accordingly, we believe that utilizing a higher dose for a longer duration in this study may have resulted in improvement in overall clinical and mycological responses in VVC. An observed dose-response effect is a well-established manner to uncover drug effects during the early drug development stage prior to optimizing the dosing/treatment regimen. The observed improvements in disease severity scores, as well as the dose-response effects in clinical cure rates and onset of mycological eradication in this VVC study, we believe bring together the support for the proof-of-concept of systemic delivery of MAT2203 to the site of infection in humans.

Based on the overall data set we have generated to date, we plan to seek an FDA meeting in the near term to discuss the data and the development path forward toward commencing a registration trial for an indication for the prevention of invasive fungal infections in patients with ALL (Acute Lymphoblastic Leukemia) as the next step in our overall development program for MAT2203 following the conclusion of our planned and announced Phase 2 PK/Tolerability study of MAT2203 in leukemia patients.

We are pursuing a first indication for the prevention of invasive fungal infections in patients with ALL because the risk for invasive fungal infections (IFIs) in patients being treated for ALL is high, with an associated high risk of lethality. Currently, there is no standard of care for preventing these high risk IFIs in ALL patients. The established treatment regimens for ALL are highly sensitive to liver-metabolized drug-drug interactions, causing serious concerns for drug-drug interaction induced side-effects. Amphotericin B is not liver metabolized and when incorporated in the lipid-crystal nano-particle structure of MAT2203, this otherwise toxic IV only compound can now be safely orally administered (providing patient convenience over ~12 weeks prophylactic treatment duration), without the typical kidney and liver toxicity associated with other Amphotericin B formulations.

Our second clinical stage product candidate is MAT2501, an orally administered, encochleated formulation of the broad spectrum aminoglycoside antibiotic amikacin which may be used to treat different types of multidrug-resistant bacteria, including non-tuberculous mycobacterium infections (NTM), as well as various multidrug-resistant gram negative and intracellular bacterial infections. In March 2017, we announced topline results from a Phase 1 single escalating dose clinical trial of MAT2501 in healthy volunteers in which no serious adverse events were reported and where oral administration of MAT2501 at all tested doses yielded blood levels that were well below the safety levels recommended for injected amikacin, supporting further development of MAT2501 for the treatment of NTM infections.

~~Financial Operations Overview~~

We are a development stage company and have generated approximately $105 thousand in contract research revenues during the nine months ended September 30, 2017 and no revenue in the nine months ended September 30, 2016. We have incurred losses for each period from ~~inception. Our net loss was approximately $11.9 million~~our inception and $5.7 million for the nine months ended September 30, 2017 and 2016, respectively and approximately $3.4 million and $1.8 million for the three months ended September 30, 2017 and 2016, respectively. We expect to incur ~~significant expenses and increasing operating~~additional losses for the foreseeable future. We ~~expect our expenses~~do not believe the cash, cash equivalents and marketable debt securities on hand are sufficient to ~~increase significantly in connection with our ongoing activities to develop, seek regulatory approval and commercialization~~fund planned operations beyond the next twelve months from the filing date of MAT2203 and MAT2501 and any other product candidates we choose to develop based upon our platform technology. Accordingly, we will need additional financing to support our long term continuing operations.these financial statements. We ~~will~~ seek to fund our operations through public or private equity orofferings, debt ~~financings~~financing, government or other ~~sources, which may include~~third-party funding, collaborations ~~with third parties. Adequate additional~~and licensing arrangements. These financing alternatives may not be available to us on acceptable terms, or at all. ~~Our failure to raise capital as and when needed would impact our going concern and would have~~As a ~~negative impact on our financial condition and~~result, substantial doubt exists about our ability to ~~pursue our business strategy and~~ continue as a going concern. ~~We will need~~

Financial Operations Overview

Revenue

During the three months ended March 31, 2024 and 2023, we generated $0 and $1,096, respectively, in contract research revenue resulting from the research collaborations with BioNTech SE and Genentech Inc. Our ability to generate ~~significant revenues~~product revenue, which we do not expect to ~~achieve profitability,~~occur for many years, if ever, will depend heavily on the successful development and ~~we may never do so.~~eventual commercialization of our early-stage product candidates.

~~Revenue~~

We generated Contract Research Revenue in the amount of approximately $105 thousand for the nine months ended September 30, 2017 versus zero in the same period of 2016. This revenue is directly related to our grant with the Cystic Fibrosis Foundation Therapeutics Inc. to study MAT2501, for the treatment of nontuberculous mycobacterium infection (NTM) in preclinical models. The contract will last into 2018.

Research and Development Expenses

Research and development expenses consist of costs ~~mainly~~ incurred for the development of product candidate MAT2203 and ~~MAT2501~~advancement of our LNC platform delivery technology, which include:

●	the cost of conducting pre-clinical work;

●	the cost of acquiring, developing and manufacturing pre-clinical and human clinical trial materials;

●	costs for consultants and contractors associated with Chemistry and Manufacturing Controls (CMC), pre-clinical and clinical activities and regulatory operations;

●	expenses incurred under agreements with contract research organizations, or CROs, including the National Institutes of Health (NIH), that conduct our pre-clinical or clinical trials; and

●	employee-related expenses, including salaries and stock-based compensation expense for those employees involved in the research and development process.

The table below summarizes our direct research and development expenses for our product candidates and development platform for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~2016.~~2023. Our direct research and development expenses consist principally of external costs, such as fees paid to contractors, consultants, analytical laboratories and CROs and/or the NIH, in connection with our development work. We typically use our employee and infrastructure resources for manufacturing clinical trial materials, conducting product analysis, study protocol development and overseeing outside vendors. Included in “Internal ~~Staffing, Overhead~~staffing, overhead and ~~Other”~~other” below is the cost of laboratory space, supplies, ~~R&D~~research and development (R&D) employee costs (including ~~stock option expenses)~~stock-based compensation), travel and medical education.

	Three Months ended September 30,				Nine Months ended September 30,
	2017		2016		2017		2016		Three Months Ended March 31,
	($ in thousands)				($ in thousands)				2024		2023
Direct research and development expenses:
Manufacturing process development	$	56	$	35	$	218	$	74	$	270	$	304
Preclinical trails		261		133		603		146
Preclinical trials										436		162
Clinical development		467		22		2,642		332		156		528
Regulatory		53		34		181		73		81		193
Internal staffing, overhead and other		1,176		611		3,068		1,775		2,503		2,783
Total research and development	$	2,013	$	835	$	6,712	$	2,400	$	3,446	$	3,970

Research and development activities are central to our business model. ~~Product~~We expect our research and development expenses to increase over time because product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage human trials.

~~We expect~~ However, we anticipate that our ~~R&D~~research and development expenses ~~to increase~~ during ~~2017 and 2018~~2024 will be lower compared with expenses incurred during 2023 until such time as we ~~implement our~~are able to secure additional ~~Phase II studies and start Phase III with MAT2203 as well as start our Phase II studies with MAT2501. In addition, we have and will increase our headcount~~funding to support initiation of our ~~ongoing product development~~ORALTO trial for MAT2203 and ~~incur additional rental expense with~~advancement of our ~~new laboratory and manufacturing facility.~~LNC platform delivery technology.

General and Administrative Expenses

General and administrative expense for the three months ended March 31, 2024 and 2023 were $2,456 and $2,712, respectively. General and administrative expenses consist principally of salaries and related costs for personnel in executive and finance functions. Other general and administrative expenses include facility costs, ~~communication~~insurance, investor relations expenses, ~~and~~ professional fees for legal, patent review, consulting and ~~accounting~~accounting/audit services.

We anticipate that our general and administrative expenses ~~to increase for the full year 2017~~during 2024 will decrease slightly compared to ~~2016 due to increased~~ expenses related to our status as a publicly traded company, including increased compensation expense (including stock based compensation), headcount to support our expanded operations and expenses in support of compliance with the requirements of Section 404 of the Sarbanes Oxley Act.incurred during 2023.

Other ~~income/(expense),~~Income, net

Other ~~income/(expense),~~income, net is largely comprised of interest ~~income, interest expense~~income/(expense) and ~~franchise taxes.~~dividends.

Application of Critical Accounting Policies and Accounting Estimates

~~Our~~A critical accounting ~~policies are more fully described in Note C~~policy is one that is both important to the portrayal of our financial ~~statements included~~condition and results of operation and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

For a description of our significant accounting policies, refer to “Note 3 – Summary of Significant Accounting Policies” in our ~~annual report~~2023 Form 10-K. Of these policies, the following are considered critical to an understanding of our Unaudited Condensed Consolidated Financial Statements as they require the application of the most difficult, subjective and complex judgments: (i) Research and development costs, and (ii) Goodwill and other intangible assets.

Recent Accounting Pronouncements

Refer to “Note 3 – Summary of Significant Accounting Policies” in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements and their expected impact on ~~Form 10-K~~our financial positions and results of operations.

Current Operating Trends

Our current R&D efforts are focused on advancing our lead LNC product candidate, MAT2203, through clinical development toward an initial indication for the ~~year ended December 31, 2016, there have been no material changes~~treatment of CM and expanding application of our LNC Platform through both internal efforts and collaborations with third parties. Our R&D expenses consist of manufacturing work and the cost of active pharmaceutical ingredients and excipients used in such work, fees paid to consultants for work related to clinical trial design and regulatory activities, fees paid to providers for conducting various clinical studies as well as for the analysis of the results of such studies, and for other medical research addressing the potential efficacy and safety of our ~~critical accounting policies.~~drugs. We believe that significant investment in product development is a competitive necessity, and we plan to continue these investments to be in a position to realize the potential of our product candidates and proprietary technologies.

We expect that most of our R&D expenses in the near-term future will be incurred in support of our current and future preclinical and clinical development programs. These expenditures are subject to numerous uncertainties relating to timing and cost to completion. We test compounds in numerous preclinical studies for safety, toxicology, and efficacy. At the appropriate time, subject to the approval of regulatory authorities, we expect to conduct early-stage clinical trials. We anticipate funding these trials ourselves, and possibly with the assistance of federal grants, contracts, or other agreements. As we obtain results from trials, we may elect to discontinue or delay clinical trials for certain products to focus our resources on more promising products. Completion of clinical trials may take several years, and the length of time varies substantially according to the type, complexity, novelty and intended use of a product candidate.

2217

~~Stock-Based Compensation~~

~~Option Grants~~

~~We account~~The commencement and completion of clinical trials for ~~all share-based compensation payments issued to employees, directors,~~our products may be delayed by many factors, including lack of efficacy during clinical trials, unforeseen safety issues, slower than expected participant recruitment, lack of funding or government delays. In addition, we may encounter regulatory delays or rejections as a result of many factors, including results that do not support the intended safety or efficacy of our product candidates, perceived defects in the design of clinical trials and non-employees using an option pricing model for estimating fair value. Accordingly, share-based compensation expense is measured based on the estimated fair value of the awards on the date of grant. We recognize compensation expense for the portion of the award that is ultimately expected to vest over the period during which the recipient renders the required services to us using the straight-line single option method. In accordance with authoritative guidance, we re-measure the fair value of non-employee share-based awards as the awards vest, and recognize the resulting value, if any, as expensechanges in regulatory policy during the period of product development. As a result of these risks and uncertainties, we are unable to accurately estimate the ~~related services are rendered.~~

~~Significant Factors, Assumptions~~specific timing and ~~Methodologies Used in Determining Fair Value~~

We apply the fair value recognition provisions of ASC Topic 718, Compensation-Stock Compensation, which we refer to as ASC 718. Determining the amount of share-based compensation to be recorded required us to develop estimates of the fair value of stock options as of their grant date before operating as a public company. We recognize share-based compensation expense ratably over the requisite service period, which in most cases is the vesting period of the award. Calculating the fair value of share-based awards requires that we make highly subjective assumptions.

~~We use the Black-Scholes option pricing model to value our stock option awards. Use of this valuation methodology requires that we make assumptions as to the volatility~~costs of our ~~common stock,~~clinical development programs or the ~~expected term~~timing of material cash inflows, if any, from our product candidates. Our business, financial condition and results of operations may be materially adversely affected by any delays in, or termination of, our ~~stock options, and~~clinical trials or a determination by the ~~risk free interest rate for a period~~FDA that ~~approximates~~ the ~~expected term~~results of our ~~stock options and our expected dividend yield. As a publicly-held company with a limited operating history, we utilized data from a representative group of companies~~trials are inadequate to ~~estimate expected stock price volatility. We selected companies~~justify regulatory approval, insofar as cash in-flows from the ~~biopharmaceutical industry with similar characteristics to us, including those in the early stage~~relevant drug or program would be delayed or would not occur.

Results of ~~product development and with a therapeutic focus.~~Operations

~~We use the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107,~~~~Share-Based Payment~~~~, to calculate the expected term~~Comparison of ~~stock option grants to employees as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees.~~

We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period, with the exception of options granted subject to a consulting agreement, whereby the option vesting period and the service period defined pursuant to the terms of the consulting agreement may be different. Stock options issued to consultants are revalued quarterly until fully vested, with any change in fair value expensed. For awards subject to performance conditions, the Company recognizes stock-based compensation expense using the accelerated attribution recognition method when it is probable that the performance condition will be achieved. The following range of assumptions were used to value options granted for the three and nine months ended September 30, 2017 and 2016 and to re-measure stock options issued to consultants.

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Volatility 67.09%-70.7 % 44.72% - 89.15 % 67.09%-82.26 % 44.72%-89.15 %
Risk-free interest rate 2.015%-2.07 % 1.15%-1.28 % 1.89%-2.22 % 1.14%-1.42 %
Dividend yield 0.0 % 0.0 % 0.0 % 0.0 %
Expected life 6.0 years 6.0 years 6.0 years 6.0 years

The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding and is based on the options vesting term, contractual terms, and industry peers as we did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as our stock has not been trading long enough to calculate its own volatility. We will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for our common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of our stock options. The expected dividend assumption is based on our history and expectation of dividend payouts.

We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. Accordingly, we have assumed no dividend yield for purposes of estimating the fair value of our share-based compensation.

~~The closing price of our stock (on the date of a grant) is used as an input in the measurement of stock-based compensation.~~

~~Share-based compensation expense associated with stock options and restricted stock granted to employees and non-employees for~~ the three months ended September 30, 2017 and 2016 was approximately $0.6 million and $0.5 million, respectively; for the nine months ended September 30, 2017 and 2016 was approximately $2.3 million and $1.3 million, respectively. As of September 30, 2017, we had approximately $5.0 million of total unrecognized share-based compensation expense, which we expectMarch 31, 2024 to recognize over a weighted-average remaining vesting period of approximately .8 years. In future periods, our share-based compensation expense is expected to increase as a result of recognizing our existing unrecognized share-based compensation for awards that will vest and as we issue additional share-based awards to attract and retain our employees.

~~We have included stock based compensation as part of our operating expenses in our statement of operation for the three and nine months ended September 30 ($ in thousands) as follows:~~

Three Months ended
September 30,

Nine Months ended
September 30,

2017 2016 2017 2016
Research and development 280 212 785 483
General and administrative 271 268 1,454 791
Total $ 551 $ 480 $ 2,239 $ 1,274

The 2013 Equity Compensation Plan, or the Plan, is the only active plan pursuant to which options to acquire common stock or restricted stock awards can be granted and are currently outstanding. As of September 30, 2017, there were 1,397,606 shares of our common stock available for issuance under the Plan.

As of September 30, 2017, we had outstanding options to purchase an aggregate of 11,526,027 shares of our common stock with a weighted average exercise price of $2.22. The computation of the aggregate intrinsic value is based upon the difference between the original exercise price of the options and our estimate of the fair value of our common stock at September 30, 2017.

~~Emerging Growth Company Status~~

Under Section 107(b) of the Jumpstart Our Business Startups Act of 2012, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

~~Results of Operations ($ in Thousands)~~

~~Comparison of Three Months Ended September 30, 2017 and 2016.~~

2017 2016 Increase

Revenues $ 45 - 45

Cost and expenses:
Research and development $ 2,013 $ 835 $ 1,178
General and administrative 1,440 1,000 440
Total cost and expenses $ 3,453 $ 1,835 $ 1,618

~~Revenues:~~~~Revenue for~~ the three months ended ~~September 30, 2017 were approximately $45 thousand, compared to $0~~March 31, 2023

The following tables summarize our revenues and operating expenses for the periods presented:

	Three Months Ended March 31,
	2024		2023
Revenues	$	—	$	1,096

Expenses:
Research and development	$	3,446	$	3,970
General and administrative		2,456		2,712
Operating Expenses	$	5,902	$	6,682

Revenues. During the three months ended March 31, 2024 and 2023, we generated revenue of $0 and $1,096. The amount earned during the prior ~~period. Revenue consists of revenue earned under~~year resulted from the ~~Cystic Fibrosis Foundation Therapeutics~~exclusive research collaborations with BioNTech SE and Genentech Inc. ~~grant to study MAT2501, for the treatment of pre-clinical nontuberculous mycobacterium infection (NTM). The grant will last into 2018.~~

Research and Development ~~expenses:~~expenses. Research and Development (R&D) expense for the three months ended ~~September 30, 2017 increased approximately $1.2 million compared~~March 31, 2024 and 2023 was $3,446 and $3,970, respectively. The decrease in R&D expense was primarily attributable to the ~~prior year period. This increase is primarily due to an increase~~decrease in ~~spending on~~ clinical ~~studies for MAT2203,~~trial consulting costs and in headcount ~~additions, lab operations and analytical development~~ costs. ~~In the longer term, we expect R&D expenses to increase as we conduct additional clinical studies for our product candidates.~~

General and Administrative expenses. General and Administrative ~~expenses~~(G&A) expense for the three months ended ~~September 30, 2017 were approximately $1.4 million, an increase of approximately $440 thousand, largely due~~March 31, 2024 and 2023 was $2,456 and $2,712, respectively. The decrease in G&A expense was primarily attributable to an increase in professional fees associated with strategic consulting and investor relations as well as an increase in employee compensation/benefits, and insurance costs. G&A expenses are expected to increase for remainder of 2017 to meet the requirements of a public company and explore possible business development opportunities.

~~Comparison of Nine Months Ended September 30, 2017 and 2016.~~

2017 2016 Increase

Revenues $ 105 - 105

Cost and expenses:
Research and development $ 6,712 $ 2,400 $ 4,312
General and administrative 5,265 3,293 1,972
Total cost and expenses $ 11,977 $ 5,693 $ 6,284

~~Revenues~~: Revenue for the nine months ended September 30, 2017 were approximately $105, compared to $0 for the nine months ended September 30, 2016. Revenue consists of revenue earned under the Cystic Fibrosis Foundation Therapeutics Inc. grant to study MAT2501, for the treatment of pre-clinical nontuberculous mycobacterium infection (NTM). The grant will last into 2018.

~~Research and Development expenses:~~ Research and Development expense for the nine months ended September 30, 2017 increased approximately $4.3 million compared to the prior year period. This increase is primarily due to an increase in spending on clinical studies and preclinical studies, associated with both MAT2203 and MAT2505, increased in headcount,lower stock based compensation expense and increase in laboratory operations costs as a result of our new laboratory facilities. In the longer term, we expect R&D expenses to increase as we conduct additional clinical studies for our product candidates.decreased insurance premiums.

~~General~~Liquidity and ~~Administrative expenses:~~capital resources General and Administrative expenses for the nine months ended September 30, 2017 were approximately $5.3 million, an increase of $2.0 million over the same period in 2016. This increase is mainly due to increases in professional fees associated with legal services, accounting services, strategic consulting and investment relations services, as well an increase in employee compensation benefit expenses.

Sources of Liquidity

We have funded our operations since inception primarily through private placements and public offerings of our equity ~~instruments, a warrant tender offering and the use of the Company’s Controlled Equity Offering Sales Agreement with Cantor.~~securities. As of ~~September 30, 2017,~~March 31, 2024, we have raised ~~approximately $42 million~~a total of $156,907 in gross proceeds and $144,195, net, ~~proceeds through these offerings.~~

~~On April 3, 2017, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission which allows us to offer, issue and sell~~ from time to time together or separately, in one or more offerings, any combination of (i) our common stock, (ii) our preferred stock, which we may issue in one or more series, (iii) warrants, (iv) senior or subordinated debt securities, (v) subscription rights and (vi) units, consisting of any combination of the securities listed above. We will describe in a prospectus supplement the securities we are offering and selling, as well as the specific terms of the securities. The aggregate public offering price of the securities that we may offer from time to time pursuant to the shelf registration statement will not exceed $150.0 million. We will offer the securities in an amount and on terms that market conditions will determine at the time of the offering.

~~On April 28, 2017, the Company entered into a Controlled Equity Offering~~^SMSales Agreement, or sales agreement, with Cantor Fitzgerald & Co., or “Cantor”, pursuant to which the Company may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to $30.0 million. Cantor Fitzgerald will be acting as sales agent and be paid a 3% commission on each sale. Through September 30, 2017 we raised approximately $0.6 million in net proceeds through sales of our ~~common stock under this program over approximately 5 weeks selling approximately 500 thousand shares.~~equity securities.

As of ~~September 30, 2017,~~March 31, 2024, we had ~~an accumulated deficit of approximately $47.6 million, working capital of approximately $8.3 million and~~ cash, ~~and~~ cash equivalents and marketable debt securities totaling ~~approximately $9.0 million.~~$8,110.

2518

~~2017 Warrant Tender~~

2024 Registered Direct Offering

On ~~January 13, 2017,~~April 5, 2024, the Company ~~completed~~closed a registered direct offering of 33,333,334 shares of its ~~tender offer~~common stock and warrants to ~~amend and exercise certain categories of existing warrants.~~

~~Pursuant~~purchase up to ~~the Offer to Amend and Exercise,~~ an aggregate of ~~30,966,350 warrants were tendered by their holders and were amended and exercised in connection therewith for an aggregate exercise~~33,333,334 additional shares of common stock, at a combined purchase price of $0.30 per share and accompanying warrant. The Company generated gross proceeds of approximately ~~$15.5 million. The aggregate gross cash~~$10,000 and net proceeds ~~were~~of approximately ~~$13.5 million and the net cash proceeds~~$9,250, after deducting ~~warrant solicitation agent fees~~underwriting discounts and commissions and other ~~estimated~~ offering ~~expenses were approximately $12.7 million.~~expenses.

Cash Flows

The following table sets forth the primary sources and uses of cash, cash equivalents and restricted cash for each of the ~~period~~periods set forth below:

	Three Months Ended March 31,
	2024			2023
Cash used in operating activities	$	(5,769	)	$	(4,087	)
Cash provided by investing activities		2,000			3,000
Cash provided by/(used in) financing activities		53			(4	)
Net decrease in cash and cash equivalents and restricted cash	$	(3,716	)	$	(1,091	)

Nine months ended
September 30,
2017 2016
Cash used in operating activities $ (9,544 ) $ (4,003 )
Cash used in investing activities (824 ) -
Cash provided by financing activities 15,263 6,996
Net increase (decrease) in cash and cash equivalents $ 4,895 $ 2,993

Operating Activities

We have incurred significant costs in the area of research and development, including clinical supply manufacturing, regulatory and clinical development costs and costs associated with being a public company. Net cash used in operating activities was ~~approximately $9.5 million~~$5,769 and $4,087 for the ~~nine months~~three month periods ended ~~September 30, 2017~~March 31, 2024 and ~~approximately $4.0 million~~2023, respectively. Net losses of $5,824 and $5,513 for the ~~nine months~~three month periods ended ~~September 30, 2016.~~March 31, 2024 and 2023, respectively, were partially offset by working capital adjustments due to the timing of receipts and payments in the ordinary course of business and adjustments for non-cash stock based compensation expense.

Investing Activities

~~There were~~Net cash provided by investing activities was $2,000 and $3,000 for the ~~nine months~~three month periods ended ~~September 30, 2017~~March 31, 2024 and 2023, respectively. The decrease of ~~approximately $.8 million for leasehold improvements.~~cash provided by investing activities was due to a $1,000 decrease in maturities of marketable debt securities.

Financing Activities

Net cash provided by/(used in) financing activities was $53 and ($4) for the three month periods ended March 31, 2024 and 2023, respectively. The increase in cash provided by financing activities ~~was $15.3 million for the nine months ended September 30, 2017~~is primarily due to ~~net~~the proceeds from the warrant tender offer (approximately $ 12.7 million per Note D), warrants exercised by investors outside of this offer approximating $ 2.1 million, proceeds of approximately $0.6 million provided by salessale of our common stock ~~through our Controlled Equity Agreement, additional capital leases, offset by a pay down of notes payable.~~under the ATM with BTIG, LLC.

Funding Requirements and Other Liquidity Matters

~~MAT2203 and MAT2501 are still in development stages.~~ We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we:

●	●	conduct ~~our planned Phase 2~~further preclinical and ~~Phase 3~~ clinical ~~trials~~studies of MAT2203, our lead product ~~candidate;~~candidate, even if such studies are primarily financed with non-dilutive funding from the NIH;

●	●	~~initiate and continue the research and development of our other product candidates and potential product candidates, including Phase 1 and Phase 2 clinical trials of MAT2501;~~

	●	seek to discover and develop additional product ~~candidates using our cochleate lipid-crystal delivery technology platform;~~candidates;

●	●	seek regulatory approvals for any product candidates that successfully complete clinical trials;

	●	~~establish a sales, marketing and distribution infrastructure in the future to commercialize any products for which we may obtain regulatory approval;~~

●	●	require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization;

●	●	maintain, expand and protect our intellectual property portfolio;

●
	●	hire additional clinical, quality control and scientific personnel; and

●	●	add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.

~~As of September 30, 2017, the Company had~~We do not expect that our existing cash, ~~and~~ cash equivalents ~~of approximately $9.0 million. We believe the cash~~ and ~~cash equivalents on hand are~~marketable debt securities will be sufficient ~~to fund planned operations through May 2018. We will need additional financing~~ to fund our operating expenses and capital expenditure requirements beyond the next twelve months from the filing date of these financial statements. As a result, substantial doubt exists about the Company’s ability to ~~initiate~~continue as a going concern.

Until such time, if ever, that we can generate product revenues sufficient to achieve profitability, we expect to finance our cash needs through a combination of private and public equity offerings, debt financings, government or other third-party funding, collaborations, and licensing arrangements. To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, the ownership interest of our stockholders may be materially diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights of our common stockholders. Debt financing and preferred equity financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, that could adversely impact our ability to conduct our ~~intended clinical~~business. Securing additional financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs file additional patent applications and enhance our intellectual property position for lead compounds, and prepare for submission of an NDA for MAT2203 and MAT2501, and potentially conduct preclinical work in order to identifyor product candidates ~~utilizing our cochleate delivery platform technology. We have entered into a Controlled Equity Offering~~^SM~~Sales Agreement,~~ or ~~sales agreement, with Cantor Fitzgerald & Co., or Cantor Fitzgerald~~grant licenses on terms that may not be favorable to ~~provide us with the potential of raising additional capital.~~us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market ~~any~~ product candidates ~~under our development~~ that we would otherwise prefer to develop and market ourselves.

~~Until the time~~Our financial condition and results of operations may also be impacted by other factors we can generate substantial product revenues from commercializing MAT2203, MAT2501 or any future product candidates, if ever, we expect to finance our cash needs through a combination of private and public equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and could increase our expenses and require that our assets secure such debt. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or grant licenses on terms that may not be ~~favorable~~able to ~~us. If we are unable to raise additional funds when needed, we~~control, such as global supply chain disruptions, global trade disputes and/or political instability. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may ~~be required to delay, limit, reduce or terminate~~have the effect of further increasing economic uncertainty and heightening these risks. Additionally, rising inflation rates may affect us by increasing operating expenses, such as employee-related costs and clinical trial expenses, negatively impacting our product development or future commercialization efforts or grant rights to develop and market any product candidates under our development that we would otherwise prefer to develop and market ourselves.results of operations.

~~Contractual Obligations and Commitments~~

Except for the Medpace contract entered into June 1, 2017, there have been no material changes from the disclosures relating to our contractual obligations reported in our Annual Report on Form 10-K for the year ended December 31, 2016.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.

~~RECENT ACCOUNTING PRONOUNCEMENTS~~Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Refer to Note (c)(6), “Recent Accounting Policies,” in the accompanying notes to the condensed consolidated financial statements for a discussion of recent accounting pronouncements.~~

~~Item 3.~~

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

Not applicable.

~~Item 4.~~

~~CONTROLS AND PROCEDURES~~

Item 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

Disclosure Controls and Procedures:

As of ~~September 30, 2017, we evaluated,~~March 31, 2024, under the supervision and with the participation of our principal executive officer and principal financial officer we have evaluated, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures ~~are~~were effective at the reasonable assurance level as of ~~September 30, 2017.~~ March 31, 2024.

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that we ~~file~~filed or ~~submit~~submitted under the Exchange Act is recorded, processed, summarized and reported within time periods specified by the SEC’s rules and ~~forms,~~forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that ~~such~~ information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of the disclosure controls and procedures are met. The design of any disclosure control and procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in ~~internal control over financial reporting.~~Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the above evaluation that occurred during the first quarter ~~ended September 30, 2017~~of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2820

~~Item 1.~~

~~LEGAL PROCEEDINGS~~

Except as set forth below, there were no material changes from the risk factors set forth under Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2023. You should carefully consider ~~these~~the risk factors contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 in addition to the other information set forth in this report which could materially affect our business, financial condition or future results. The risks and uncertainties described in this report and in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2023, as well as other reports and statements that we file with the SEC, are not the only risks and uncertainties facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our financial position, results of operations or cash flows.

During the three months ended September 30, 2017, we issued to two consulting firms an aggregate of 400,000 restricted shares of our common stock as payment for consulting services provided to us. These shares vest over the service period of six months.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We made the offers, sales and issuances of the above securities in reliance on the exemptions from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) because the issuance of securities to the recipients did not involve a public offering.

On November 13, 2017, Douglas F. Kling gave notice of his intention to resign as the Company’s Senior Vice President for Clinical Development to pursue other business opportunities. Mr. Kling’s resignation will be effective as of November 28, 2017.Item 5. OTHER INFORMATION.

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

† Indicates a management contract or compensation plan, contract or arrangement. Certain portions of this exhibit, that are not material and would likely cause competitive harm to the registrant if publicly disclosed, have been redacted pursuant to Item 601(b)(10) of Regulation S-K.

Delaware		No. 46-3011414
(State or other jurisdiction of		(I.R.S. Employer
incorporation or ~~Organization)~~organization)		~~(I.R.S. Employer~~ Identification No.)

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock		MTNB		NYSE American

Large accelerated filer ~~[ ]~~	☐	Accelerated filer ~~[ ]~~	☐

Non-accelerated ~~filer [ ]~~Filer	☒	Smaller reporting company ~~[X]~~	☒
~~(Do not check if a smaller reporting company)~~
		Emerging growth company ~~[X]~~	☐

	September 30, 2017			December 31, 2016
	(Unaudited)			(Audited)
ASSETS

CURRENT ASSETS

Cash and cash equivalents	$	9,000,674		$	4,105,451
Restricted cash		155,404			155,610
Prepaid expenses		1,017,372			304,427
Total current assets		10,173,450			4,565,488

Leasehold improvements and equipment - net		1,460,455			356,143
In-process research and development		3,017,377			3,017,377
Goodwill		1,336,488			1,336,488
Other assets including long term security deposit		535,999			540,845

TOTAL ASSETS	$	16,523,769		$	9,816,341

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable	$	341,593		$	475,602
Note payable		297,912			118,046
Accrued expenses		753,760			829,724
Deferred revenue		74,844			-
Deferred rent liability		395,620			11,485
Lease liability		19,020			9,936
Total current liabilities		1,882,749			1,444,793

LONG TERM LIABILITIES

Deferred tax liability		1,205,141			1,205,141
Lease liability - net of current portion		47,914			16,446
Stock dividends payable - long term		603,143			-

TOTAL LIABILITIES		3,738,947			2,666,380

STOCKHOLDERS’ EQUITY

Series A Convertible preferred stock, stated value $5.00 per share, 1,600,000 shares authorized as of September 30, 2017 and December 31, 2016; 1,507,858 and 1,600,000 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively, (liquidation preference - $8,142,433 at September 30, 2017)		5,735,845			6,086,350
Common stock par value $0.0001 per share, 250,000,000 and 250,000,000 shares authorized at September 30, 2017 and December 31, 2016, respectively; 92,950,096 issued and outstanding as of September 30, 2017; 58,159,495 issued and outstanding as of December 31, 2016		9,294			5,817

Additional paid in capital		54,686,207			36,237,504

Accumulated deficit		(47,646,524	)		(35,179,710	)

Total stockholders’ equity		12,784,822			7,149,961

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	16,523,769		$	9,816,341

	Three Months Ended
	September 30,
	2017			2016
Revenue:
Contract research revenue	$	44,906		$	-

Costs and Expenses:
Research and development		2,013,063			835,308
General and administrative		1,440,141			999,803

Total costs and expenses		3,453,204			1,835,111

Loss from operations		(3,408,298	)		(1,835,111	)

Other income/(expense), net		13,584			(3,325	)

Net loss	$	(3,394,714	)	$	(1,838,436	)

Dividend to preferred shareholders		(608,343	)		-

Convertible preferred stock beneficial conversion feature accreted as a deemed dividend		-			(4,393,809	)

Net loss attributable to common shareholders	$	(4,003,057	)	$	(6,232,245	)

Net loss available for common shareholders per share - basic and diluted	$	(0.04	)	$	(0.11	)

Weighted average common shares outstanding: Basic and diluted		92,222,601			57,628,917

		Page

PART - I FINANCIAL INFORMATION		3

Item 1.	FINANCIAL STATEMENTS	23

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1714

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2820

Item 4.	CONTROLS AND PROCEDURES	2820

PART - II OTHER INFORMATION		21

Item 1.	LEGAL PROCEEDINGS	2921

Item 1A.	RISK FACTORS	2921

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2921

Item 3.	DEFAULTS ~~UNDER~~UPON SENIOR SECURITIES	2921

Item 4.	MINE SAFETY DISCLOSURES	2921

Item 5.	OTHER INFORMATION	2921

Item 6.	EXHIBITS	2921

	March 31, 2024			December 31, 2023
	(Unaudited)			(Audited)
ASSETS:
Current assets:
Cash and cash equivalents	$	1,071		$	4,787
Marketable debt securities		7,039			8,969
Restricted cash – security deposit		50			50
Prepaid expenses and other current assets		2,129			1,737
Total current assets		10,289			15,543

Non-current assets:
Leasehold improvements and equipment – net		1,829			1,923
Operating lease right-of-use assets – net		2,919			3,064
Finance lease right-of-use assets – net		20			21
In-process research and development		3,017			3,017
Goodwill		1,336			1,336
Restricted cash – security deposit		200			200
Total non-current assets		9,321			9,561
Total assets	$	19,610		$	25,104

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:
Accounts payable	$	473		$	514
Accrued expenses		839			1,447
Operating lease liabilities – current		681			656
Financing lease liabilities – current		5			5
Total current liabilities		1,998			2,622

Non-current liabilities:
Deferred tax liability		341			341
Operating lease liabilities – net of current portion		2,697			2,877
Financing lease liabilities – net of current portion		16			18
Total non-current liabilities		3,054			3,236
Total liabilities		5,052			5,858

Stockholders’ equity:
Common stock par value $0.0001 per share, 500,000,000 shares authorized at March 31, 2024 and December 31, 2023; 217,482,830 and 217,264,526 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		22			22
Additional paid-in capital		196,067			195,018
Accumulated deficit		(181,397	)		(175,573	)
Accumulated other comprehensive loss		(134	)		(221	)
Total stockholders’ equity		14,558			19,246
Total liabilities and stockholders’ equity	$	19,610		$	25,104

	Nine Months Ended
	September 30,
	2017			2016
Revenue:
Contract research revenue	$	104,781		$	-

Costs and Expenses:
Research and development		6,711,997			2,399,595
General and administrative		5,264,609			3,293,233

Total costs and expenses		11,976,606			5,692,828

Loss from operations		(11,871,825	)		(5,692,828	)

Other income/(expense), net		13,354			(14,103	)

Net loss	$	(11,858,471	)	$	(5,706,931	)

Dividend to preferred shareholders		(608,343	)		-

Convertible preferred stock beneficial conversion feature accreted as a deemed dividend		-			(4,393,809	)

Inducement charge from exercise of warrants		(16,741,356	)		-

Net loss attributable to common shareholders	$	(29,208,170	)	$	(10,100,740	)

Net loss available for common shareholders per share - basic and diluted	$	(0.33	)	$	(0.18	)

Weighted average common shares outstanding: basic and diluted		89,468,153			57,505,788

	Nine Months Ended
	September 30
	2017			2016
Cash flows from operating activities:
Net loss	$	(11,858,471	)	$	(5,706,931	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		56,229			39,965
Deferred rent		97,415			2,001
Share based compensation expense		2,239,259			1,274,108
Changes in operating assets and liabilities:
Prepaid expenses		51,418			240,116
Other assets		5,081			105,269
Accounts payable		(134,009	)		(288,379	)
Accrued expenses - other liabilities		(1,120	)		331,127
Net cash used in operating activities		(9,544,198	)		(4,002,724	)

Cash flows from investing activities:
Leasehold improvements		(823,886	)		-
Net cash used in investing activities		(823,886	)		-

Cash flows from financing activities:
Proceeds from preferred stock issued for cash		-			8,000,000
Preferred stock issuance costs		-			(1,157,603	)
Net proceeds from exercise of warrants		14,834,344			240,000
Net proceeds from ATM sales		641,510			-
Payment on capital lease liability		(9,383	)		(13,578	)
Payments on notes payable		(203,164	)		(73,451	)
Net cash provided by/ financing activities		15,263,307			6,995,368

Net increase in cash and cash equivalents		4,895,223			2,992,644
Cash and cash equivalents at beginning of period		4,105,451			3,226,997

Cash and cash equivalents at end of period	$	9,000,674		$	6,219,641

Supplemental non-cash financing and investing activities:
Deemed dividend for convertible preferred stock beneficial conversion feature	$	-		$	4,393,809
Fair value of placement agent warrants as an issuance cost	$	-		$	756,047
Stock dividend accrual	$	608,343		$	-
Stock dividends issued and converted to common stock	$	5,200		$	-
Additional paid-in-capital for modification of warrants	$	16,741,356		$	-
Equipment acquired under capital lease	$	49,935		$	31,064
Note Payable for insurance premiums	$	383,030		$	262,324
Liability of payment of leasehold improvements by landlord	$	286,720		$	-
Unearned restricted stock grants	$	381,333		$	-
Conversion of preferred stock	$	350,412		$	-

	Redeemable Convertible Preferred Stock						Common Stock				Additional Paid - in		Accumulated			Total Stockholders’
	(Shares)			(Amount)			(Shares)		(Amount)		Capital		Deficit			Equity

Balance as of December 31, 2016		1,600,000		$	6,086,350			58,159,495	$	5,817	$	36,237,504	$	(35,179,710	)	$	7,149,961

Stock Based Compensation EE/Consultant Options		-			-			-		-		1,623,621		-			1,623,621

Issuance of Common Stock as Compensation for services		-			-			596,960		60		996,940		-	-		997,000

Net proceeds from exercise of warrants		-			-			32,755,868		3,272		14,831,072		-			14,834,344

Issuance of Common Stock in exchange for preferred shares		(92,142	)		(350,505	)		921,420		93		350,412		-			-

Stock Dividends Issued		-			-			10,400		1		5,199		-			5,200

ATM Stock Sales (net)		-			-			505,953		51		641,459		-			641,510

Preferred dividends accrued		-			-			-		-		-		(608,343	)		(608,343	)

Net Loss		-			-			-		-		-		(11,858,471	)		(11,858,471	)

Balance as of September 30, 2017		1,507,858			5,735,845			92,950,096		9,294		54,686,207	$	(47,646,524	)	$	12,784,822

	Shares		Amount		Capital		Deficit			(Loss)/Income			Equity
	Common Stock				Additional Paid - in		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			(Loss)/Income			Equity
Balance, December 31, 2023		217,264,526	$	22	$	195,018	$	(175,573	)	$	(221	)	$	19,246
Stock-based compensation		—		—		995		—			—			995
Issuance of common stock in public offering, net of stock issuance cost ($2)		218,304		—		54		—			—			54
Other comprehensive income		—		—		—		—			87			87
Net loss		—		—		—		(5,824	)		—			(5,824	)
Balance, March 31, 2024		217,482,830	$	22	$	196,067	$	(181,397	)	$	(134	)	$	14,558

	March 31, 2024		December 31, 2023		March 31, 2023		December 31, 2022
Cash and cash equivalents	$	1,071	$	4,787	$	5,739	$	6,830
Restricted cash included in current/non-current assets		250		250		250		250
Cash, cash equivalents and restricted cash in the statement of cash flows	$	1,321	$	5,037	$	5,989	$	7,080

	Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value
	Amortized		Unrealized		Unrealized
	Cost		Gain		(Loss)			Fair Value
U.S. Government Notes	$	7,173	$	—	$	(134	)	$	7,039
Total marketable debt securities	$	7,173	$	—	$	(134	)	$	7,039

~~[4]~~●	~~Basic Net Loss per Common Share~~Level 1 – Quoted prices for identical assets or liabilities in active markets.

●	Level 2 – Quoted prices for identical or similar assets and liabilities in markets that are not active; or other model-derived valuations whose inputs are directly or indirectly observable or whose significant value drivers are observable.

●	Level 3 – Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable and for which assumptions are used based on management estimates.


			Fair Value Hierarchy
March 31, 2024	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Marketable Debt Securities:
U.S. Government Notes	$	7,039	$	—	$	7,039	$	—
Total	$	7,039	$	—	$	7,039	$	—

	March 31, 2024		December 31, 2023
Equipment	$	2,463	$	2,463
Leasehold improvements		1,155		1,155
Total		3,618		3,618
Leasehold improvements and equipment, gross		3,618		3,618
Less: accumulated depreciation and amortization		1,789		1,695
Leasehold improvements and equipment, net	$	1,829	$	1,923

	March 31, 2024		December 31, 2023
Payroll and incentives	$	501	$	1,176
General and administrative expenses		223		196
Research and development expenses		115		75
Total	$	839	$	1,447

Maturity of Lease Liabilities	Operating Lease Liabilities			Finance Lease Liabilities
Remainder of 2024	$	721		$	5
2025		998			7
2026		1,040			7
2027		944			7
2028		273			—
Thereafter		138			—
2028		273			—
Thereafter		138			-
Total undiscounted operating lease payments	$	4,114		$	26
Less: Imputed interest		736			5
Present value of operating lease liabilities	$	3,378		$	21

Weighted average remaining lease term in years		4.1			3.7
Weighted average discount rate		9.2	%		11.6	%

	As of March 31,
	2024		2023
Stock options		46,031,560		34,677,699
Warrants		—		238,000
Total		46,031,560		34,915,699

	Three Month period Ended September 30,				Nine Month period Ended September 30,
	2017		2016		2017		2016
Stock options		11,526		8,321		11,526		8,321

Preferred Stock issuable upon conversion		15,078		16,000		15,078		16,000

Warrants		5,961		40,518		5,961		40,518

Total		32,565		64,839		32,565		64,839

	September 30, 2017		December 31, 2016
Lab equipment	$	472		438
Furniture and fixtures		20		20
Equipment under capital lease		81		31
Leasehold improvements		1,084		7
Total		1,657		496
Less: accumulated depreciation and amortization		196		140
Leasehold improvements and equipment, net	$	1,461	$	356

	Net Unrealized Gain/(Loss) on Available-for-Sale Securities			Accumulated Other Comprehensive Loss
Balance, December 31, 2023	$	(221	)	$	(221	)
Net unrealized gain on securities available-for-sale		87			87
Balance, March 31, 2024	$	(134	)	$	(134	)

Balance, December 31, 2022	$	(824	)	$	(824	)
Net unrealized loss on securities available-for-sale		229			229
Balance, March 31, 2023	$	(595	)	$	(595	)

	~~Shares~~
~~Total Warrants Outstanding at December 31, 2016~~		~~40,255~~
~~Warrants tendered on January 13, 2017~~		~~(30,966~~	)
~~Warrants exercised first quarter, 2017 outside of tender offer~~		~~(2,916~~	)
~~Warrants exercised second quarter, 2017~~		~~(412~~	)
~~Warrants exercised third quarter, 2017~~		-
~~Total Warrants Outstanding at September 30, 2017~~		~~5,961~~

*	Increased by 8,690,581 on January 1, 2024, representing 4% of the total number of shares of common stock outstanding on December 31, 2023.
**	Includes both restricted stock grants and option grants

			Weighted
	Number of		average
	Options		Exercise Price
Outstanding at December 31, 2016		8,290	$	0.93
Granted		3,235		2.91
Outstanding at September 30, 2017		11,525	$	1.43

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Volatility		67.09%-70.7	%		44.72% - 89.15	%		67.09%-82.26	%		44.72%-89.15	%
Risk-free interest rate		2.015%-2.075	%		1.150%-1.280	%		1.89%-2.22	%		1.14%-1.42	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%
Expected life		6.0 years			6.0 years			6.0 years			6.0 years

	September 30, 2017		December 31, 2016
Insurance Premium	$	423	$	162
Deposits		213		36
Vendor Services		381		106
	$	1,017	$	304

	Stock Options
Outstanding at December 31, 2023		46,707,934
Granted		—
Exercised		—
Forfeited		—
Expired		(676,374	)
Outstanding at March 31, 2024		46,031,560

Year Ending December 31,	Lease Commitments
Remainder of 2017	$	126
2018		683
2019		707
2020		732
2021		657
Future minimum lease payments through 2021	$	2,905

●	●	our ability to raise additional capital to fund our operations and to develop our product candidates;

●	●	our ability to raise additional capital, in light of the significant number of shares issuable upon conversion of our Series A Preferred Stock (including paying dividends in the form of common stock), upon exercise of outstanding warrants and options and upon achievement of certain milestones pursuant to the Matinas BioPharma Nanotechnologies, Inc. acquisition agreement;

	●	~~our obligation to pay royalties to holders of our Series A Preferred Stock;~~

	●	our anticipated timing for preclinical development, regulatory submissions, commencement and completion of clinical trials and product approvals;

●	●	our history of operating losses in each year since inception and the expectation that we will continue to incur operating losses for the foreseeable future;

●	●our dependence on product candidates which are still in an early development stage;

●	our reliance on our proprietary ~~cochleate drug~~lipid nanocrystal (LNC) platform delivery technology, and certain related patents which isare exclusively licensed to us by Rutgers University;

●	●	our ability to manufacture GMP ~~(Good Manufacturing Practices)~~ batches of our product candidates which are required for ~~pre- clinical~~preclinical and clinical trials and, subsequently, if regulatory approval is obtained for any of our products, our ability to manufacture commercial quantities;

●	●	our ability to complete required clinical trials for our lead product candidate and other product candidates and obtain approval from the FDA or other regulatory agents in different jurisdictions;

●	●	our dependence on ~~third-parties,~~third parties, including ~~third-parties~~third parties to manufacture our intermediates and final product formulations and third-party ~~CROs (Clinical Research Organizations) including, without limitation, the National Institutes of Health (NIH)~~contract research organizations to conduct our clinical trials;

●	●	our ability to maintain or protect the validity of our patents and other intellectual property;

●	●	our ability to ~~recruit~~retain and ~~retain key executive members and~~recruit key personnel;

●
	●	our ability to internally develop new inventions and intellectual property;

●	●	interpretations of current laws and the passages of future laws;

●	●	our lack of a sales and marketing organization and our ability to commercialize products, if we obtain regulatory ~~approval;~~approval, whether alone or through potential future collaborators;

●	●our ability to successfully commercialize, and our expectations regarding future therapeutic and commercial potential with respect to, our product candidates;
	~~acceptance of our business model by investors;~~

●	●	the accuracy of our estimates regarding expenses, ~~and~~ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing;

●	~~��~~	~~our ability to adequately support growth;~~

	●	developments ofand projections relating to our competitors or our industry; ~~and~~

●	●our operations, business and financial results could be adversely impacted by global instability caused by armed conflicts, pandemics and geo-political uncertainty; and

●	the factors listed under the ~~headings~~heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2023, elsewhere in this report and other reports that we file with the Securities and Exchange Commission.

	●	Advancing MAT2203 into the ORALTO trial for the treatment of invasive aspergillosis in patients with limited treatment options by securing a development and/or commercial partner. This initial indication is designed to be a gateway indication to establish the pharmacodynamic bridge necessary to expand the use of MAT2203 into other indications to treat deadly invasive fungal infections (e.g., mucormycosis, candidiasis and the endemic mycoses) through limited additional clinical work under a 505(b)(2) pathway, thereby making MAT2203 a pipeline in a product.

	●	Expanding the utilization of our LNC Platform with other small molecules and small oligonucleotides into inflammation and oncology in order to develop an internal pipeline of differentiated drug candidates. Oral, extrahepatic and non-toxic intracellular delivery of these molecules would represent a significant advancement.

	●	Building an external pipeline of collaborations focused on our LNC Platform with leading pharmaceutical companies to provide delivery solutions for their complex small molecules and small oligonucleotides, including ASOs and siRNAs.

	2017		2016		Increase

Revenues	$	45		-		45

Cost and expenses:
Research and development	$	2,013	$	835	$	1,178
General and administrative		1,440		1,000		440
Total cost and expenses	$	3,453	$	1,835	$	1,618

	MATINAS BIOPHARMA HOLDINGS, INC.

	BY:

	/s/ ~~Roelof Rongen~~Jerome D. Jabbour
Dated: ~~November 14, 2017~~May 9, 2024	~~Roelof Rongen~~Jerome D. Jabbour
	Chief Executive Officer (Principal Executive Officer)

	/s/ ~~Gary Gaglione~~Keith A. Kucinski
Dated: ~~November 14, 2017~~May 9, 2024	~~Gary Gaglione~~Keith A. Kucinski
	~~Acting~~ Chief Financial Officer
	(Principal Financial and Accounting Officer)