Aditxt, Inc.

Item 1A. Risk Factors

Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth below and in our most recent Annual Report on Form 10-K and in our other filings with the SEC, the occurrence of any one of which could have a material adverse effect on our actual results.

Our financial situation creates doubt whether we will continue as a going concern.

The Company was incorporated on September 28, 2017 and through the date of this report has generated no significant revenues. For the years ended December 31, 2023 and 2022, the Company had a net loss of $32,390,447 and $27,649,876, respectively. Our condensed consolidated financial statements as of JuneSeptember 30, 2024, show a net loss of $22,492,5739,472,886. Our cash and cash equivalents were approximately $91,223328,596 as of JuneSeptember 30, 2024. There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available, we may be forced to discontinue operations, which would cause investors to lose their entire investment.

If we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development and you will likely lose your entire investment.

We will need to continue to seek capital from time to time to continue development of our lead drug candidate beyond our initial combined Phase I/IIa clinical trial and to acquire and develop other product candidates. Once approved for commercialization, we cannot provide any assurances that any revenues it may generate in the future will be sufficient to fund our ongoing operations.

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Our business or operations may change in a manner that would consume available funds more rapidly than anticipated and substantial additional funding may be required to maintain operations, fund expansion, develop new or enhance products, acquire complementary products, business or technologies, or otherwise respond to competitive pressures and opportunities, such as a change in the regulatory environment or a change in preferred treatment modalities. In addition, we may need to accelerate the growth of our sales capabilities and distribution beyond what is currently envisioned, and this would require additional capital. However, we may not be able to secure funding when we need it or on favorable terms. We may not be able to raise sufficient funds to commercialize the product candidates we intend to develop.

If we cannot raise adequate funds to satisfy our capital requirements, we will have to delay, scale back or eliminate our research and development activities, clinical studies, or future operations. We may also be required to obtain funds through arrangements with collaborators, which arrangements may require us to relinquish rights to certain technologies or products that we otherwise would not consider relinquishing, including rights to future product candidates or certain major geographic markets. This could result in sharing revenues which we might otherwise retain for ourselves. Any of these actions may harm our business, financial condition, and results of operations.

We are currently over 90 days past due on a significant amount of vendor obligations. We may not be able to refinance, extend or repay our substantial indebtedness owed to our secured and unsecured lenders, which would have a material adverse effect on our financial condition and ability to continue as a going concern.

As of JuneSeptember 30, 2024, we have approximately $121.8 million in accounts payable with approximately $7.29.3 million that is over 90 days past due. If we are unable to repay these amounts, as well as our existing debt obligations at maturity, and we are otherwise unable to extend the maturity dates or refinance these obligations, we would be in default. We cannot provide any assurances that we will be able to raise the necessary amount of capital to repay these obligations or that we will be able to extend the maturity dates or otherwise refinance these obligations. Upon a default, our secured lenders would have the right to exercise their rights and remedies to collect, which would include foreclosing on our assets. Accordingly, a default would have a material adverse effect on our business, and we would likely be forced to seek bankruptcy protection.

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We may not be able to effect the transactions contemplated under the Merger Agreement with Evofem or the Arrangement Agreement with Appili . If we are unable to do so, we will incur substantial costs associated with withdrawing from the transaction.

In connection with the Merger Agreement with Evofem and the Arrangement Agreement with Appili, we have incurred substantial costs planning and negotiating the transactions. These costs include, but are not limited to, costs associated with employing and retaining third-party advisors who perform financial, auditing and legal services required before we were able to enter into such agreements and which services will continue to be utilized as we seek to complete such transactions. If, for whatever reason, such transactions fail to close, we will still be responsible for these costs, which could adversely affect our liquidity and financial results.

We will need to raise substantial additional capital, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts and strategic MA initiatives, or cease operations.

We do not expect that our current cash position will be sufficient to fund our current operations for the next 12 months. We also do not presently have sufficient cash to fund certain obligations under our Merger Agreement with Evofem or our Arrangement Agreement with Appili. In addition, we are required to complete an equity or debt financing with minimum gross proceeds of at least $20 million in order to close the transactions contemplated under our Arrangement Agreement with Appili. Our operating plan may change because of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, our product candidates. Raising funds in the current economic environment may present additional challenges. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

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Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities may dilute our existing stockholders. The incurrence of indebtedness would result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay, or discontinue one or more of our research or development programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

A significant number of shares of our common stock may be issued and sold upon the exercise of outstanding options, warrants, and upon the conversion of the Companys convertible preferred stock.

As of JuneSeptember 30, 2024, there were 45,51,172 shares of common stock issuable under outstanding options, 6,887,581528,610 shares of common stock issuable upon exercise of outstanding warrants at various exercise prices and approximately 17,286,209268,825 shares of common stock reserved for issuance upon the standard conversion of outstanding convertible preferred stock. To the extent that holders of existing options, warrants or convertible preferred stock sell the shares of common stock issued upon the exercise of options or warrants or conversion of the convertible preferred stock, the market price of our common stock may decrease due to the additional selling pressure in the market. The risk of dilution from issuances of shares of common stock underlying existing options, warrants and convertible preferred stock may cause shareholders to sell their common stock, which could further decline in the market price.

We have entered into a Purchase Agreement with an equity line investor. If we sell shares of our common stock under the Purchase Agreement, our existing stockholders will experience immediate dilution and, as a result, our stock price may go down.

Pursuant to the Purchase Agreement, we have agreed to sell up to $150,000,000 of shares of our common stock at our option and subject to certain limitations. In addition, we may issue up to 256,250,000 shares of our common stock as a commitment fee under the Purchase Agreement. As of the date hereof, we have not issued or sold any shares of our common stock under the Purchase Agreement. The sale of shares of our common stock pursuant to the Purchase Agreement will have a dilutive impact on our existing stockholders. The equity line investor may resell some or all of the shares we issue to it under the Purchase Agreement and such sales could cause the market price of our common stock to decline, which decline could be significant.

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

The capital markets have been unpredictable in the past for unprofitable companies such as ours. In addition, it is generally difficult for development stage companies to raise capital under current market conditions. The amount of capital that a company such as ours is able to raise often depends on variables that are beyond our control. As a result, we may not be able to secure financing on terms attractive to us, or at all. If we can consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs. If adequate funds are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued viability will be materially adversely affected.

The amount of capital we may need depends on many factors, including the progress, timing and scope of our product development programs; the progress, timing and scope of our preclinical studies and clinical trials; the time and cost necessary to obtain regulatory approvals; the time and cost necessary to further develop manufacturing processes and arrange for contract manufacturing; our ability to enter into and maintain collaborative, licensing and other commercial relationships; and our partners commitment of time and resources to the development and commercialization of our products.

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Our obligations to certain of our creditors are secured by security interests in our assets, so if we default on those obligations, our creditors could foreclose on some or all of our assets.

Our obligations to certain of our creditors are secured by security interests in our assets. As of JuneSeptember 30, 2024, approximately $7.7 million was owed to such secured creditors. Under such agreements, we are required to pay $277,800 on a weekly basis to such creditors. If we default on our obligations under these agreements, our secured creditors could foreclose on its security interests and liquidate some or all of these assets, which would harm our financial condition and results of operations and would require us to reduce or cease operations and possibly seek Bankruptcy Protection.

In the event we pursue Bankruptcy Protection, we will be subject to the risks and uncertainties associated with such proceedings.

In the event we file for relief under the United States Bankruptcy Code, our operations, our ability to develop and execute our business plan and our continuation as a going concern will be subject to the risks and uncertainties associated with bankruptcy proceedings, including, among others: our ability to execute, confirm and consummate a plan of reorganization; the additional, significant costs of bankruptcy proceedings and related fees; our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence, and our ability to comply with terms and conditions of that financing; our ability to continue our operations in the ordinary course; our ability to maintain our relationships with our consumers, business partners, counterparties, employees and other third parties; our ability to obtain, maintain or renew contracts that are critical to our operations on reasonably acceptable terms and conditions; our ability to attract, motivate and retain key employees; the ability of third parties to use certain limited safe harbor provisions of the United States Bankruptcy Code to terminate contracts without first seeking Bankruptcy Court approval; the ability of third parties to force us to into Chapter 7 proceedings rather than Chapter 11 proceedings and the actions and decisions of our stakeholders and other third parties who have interests in our bankruptcy proceedings that may be inconsistent with our operational and strategic plans. Any delays in our bankruptcy proceedings would increase the risks of our being unable to reorganize our business and emerge from bankruptcy proceedings and may increase our costs associated with the bankruptcy process or result in prolonged operational disruption for us. Also, we would need the prior approval of the bankruptcy court for transactions outside the ordinary course of business during the course of any bankruptcy proceedings, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with any bankruptcy proceedings, we cannot accurately predict or quantify the ultimate impact of events that could occur during any such proceedings. There can be no guarantees that if we seek Bankruptcy Protection we will emerge from Bankruptcy Protection as a going concern or that holders of our common stock will receive any recovery from any bankruptcy proceedings.

In the event we are unable to pursue Bankruptcy Protection under Chapter 11 of the United States Bankruptcy Code, or, if pursued, successfully emerge from such proceedings, it may be necessary to pursue Bankruptcy Protection under Chapter 7 of the United States Bankruptcy Code for all or a part of our businesses.

In the event we are unable to pursue Bankruptcy Protection under Chapter 11 of the United States Bankruptcy Code, or, if pursued, successfully emerge from such proceedings, it may be necessary for us to pursue Bankruptcy Protection under Chapter 7 of the United States Bankruptcy Code for all or a part of our businesses. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the United States Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our stakeholders than those we might obtain under Chapter 11 primarily because of the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern.

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We receivedare under a written noticepanel monitor from Nasdaq thatas we have historically failed to comply with certain listing requirements of the Nasdaq Stock Market, which could result in our Common Stock being delisted from the Nasdaq Stock Market.

On May 23November 21, 2023, we received written notice from Nasdaq that, based upon the s we had regained compliance with the Public Float Rule. On December 29, 2023, we received written notice from Nasdaq that we had regained compliance with the Stockholders eEquity reported by the Company in its Form 10-Q Rule, but will be subject to a Mandatory Panel Monitor for thea period ended June 30, 2023, and as of June 30, 2023, of one year. If within that one-year monitoring period, Nasdaq finds the Company was no longer in again out of compliance with Nasdaq Listingthe Stockholders Equity Rule 5550(b)(1), which requires a e will not be permitted to provide Nasdaq with a plan of company to maintain a minimum of $2,500,000 in stockholders equity, a market value of listed securitieliance with respect to that deficiency and Nasdaq will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency. If this of at leaccurs, Nasdaq will issue a delist $35 milldetermination, or net income from continuing letter and we will have the operations of $500,000 in portunity to request a new hearing. In the most recevently  that we fall out of completed fiscal year oriance with the Stockholders Equity Rule, we in two of the three most recently tends to request a new hearing.

On October 3, 2024, we were notified by Nasdaq that we were not in completed fiscal years (the Continuediance with the minimum bid price requirements set forth in Nasdaq Listing Requirements). ule 5550(a)(2) for continued listing on The May notification letter further providNasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed that the Company has 45 calendar days, or until July 7, 2023, to submitsecurities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a planfailure to regain complianmeet the minimum bid price and irequirement exists if the plan is accepted by Nasdaq, an extension deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of up to 180 calendar days, or until Novemour common stock between August 20, 2024 and October 19, 2023 to evidence compliance. On June 22, 2023, we received a letter from 4, we no longer met the minimum bid price requirement. The notification letter has no immediate effect on the listing or trading of our common stock on The Nasdaq notifyingCapital Market and, at this time, the Company that it has failed to maintain compliance withcommon stock will continue to trade on The Nasdaq Capital Market under the symbol ADTX.

The notification letter provides that the minimum bid price rule in Company has 180 calendar days, or until April 1, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2) (the Minimum Bid Price Rule) as . To regain compliance, the closingbid price of Companysour common stock has remained below must have a closing bid price of at least $1.00 per share for over 3a minimum of 10 consecutive tradingbusiness days. On June 29If we do not regain compliance by April 1, 2023, we submitt5, an additional 180 days may be granted an appeal toto regain compliance, so long as we meet Nasdaq, which stays t continued listing requirements (except for the delistingbid price requirement) and suspensionnotifies Nasdaq in writing of our seintention to curities pende the deficiency during the decision of second compliance period. If we do not qualify for the Nasdaq Hearings Panel (the Panel). Atsecond compliance period or fail to regain compliance during the hearing, which was held on August 31, 2023, second 180-day period, then Nasdaq will notify us of its determination to delist our common stock, at which representedpoint we will have an opportunity to appeal the tenth traddelisting determination to a Hearing day that the closing of s Panel.

As previously reported in a Current Report on Form 8-K filed by the Companys common stock was above $1.00 per share. At, on October 1, 2024, we filed with the hearing, the Company also presented its plansSecretary of State of the State of Delaware a certificate of amendment to regain compliance with the Equity Rule to tour certificate of incorporation to effect a reverse stock split. The Panel. In addition, on Septemreverse stock split became effective as of 4:01 p.m. Eastern Time on October 15, 2023, the Company received a written notice form 4, and our common stock began trading on a split-adjusted basis when the Nasdaq that it no longStock Market opened on October meets the minimum 500,000 publicly held shares2, 2024. The reverse stock split was primarily intended to bring us into compliance with Nasdaqs minimum bid price requirement for T. As of the Nasdaq Capital Market and it no longer complies with date of this prospectus supplement, our common stock has had a closing bid price of at least $1.00 for fourteen consecutive business days.

If we are delisted from Nasdaq Listing Ru, our common stock may be eligible 5550(a)(4) (for trading on an over-the Public Float Rule). The September notificati-counter market. If we are not able to obtain a listing on lettanother stated that the Panel will consider this matter in ock exchange or quotation service for our common stock, it may be extremely difficult or impossible for stockholders to sell their decision regarding the Companys continued listshares. We intend to monitor the closing on The Nasdaq Capital Market.

On September 29, 2023, the Company received a written notice from Nasdaq that the Panel had granted the Company an exception through December 26, 2023, to allow the Compbid price of our common stock and may be required to seek approval from our stockholders to affect a reverse stock split of the issued and outstanding shares of our common stock, however, under Nasdaq Rule 5810(b)(3)(a)(iv), we will not be entitled to an additional compliance period if the proposed reverse split reverse stock split ratio, when combined with any to complete prior reverse stock splits coimpliance withements in the Equity Rule. Tprior period of two years would exceed 250-for-1 in the Oaggregate. Our October notification letter also confirmed2024 reverse stock split when combined with our August 2023 reverse stock split exceeded 250-for-1 in the aggregate. In addition, there can be no assurance that the Company had demonstrated compliaany future reverse stock split would be approved by our stockholders. Further, there can be no assurance withthat the Minimum Bid Pmarket price Rule and grantedper new share of our common stock after the Company an excepreverse stock split will remain unchanged or increase in proportion through Deceo the reduction in the number 26, 2023 to allow the Company to demonstrate compliance with the Public Float Rule. On December 29, 2023, the Company receiof old shares of our common stock outstanding before the reverse stock split. Even if the reverse stock split is approved written notice from Nasdaqby our stockholders, there can be no assurance that we had will be able to regained compliance with the Stockholders Eminimum bid price requity Rule, but rement or will be subject to a Mandatory Panel Monitor for a period of one yearotherwise be in compliance with other Nasdaq listing rules.

If we are delisted from Nasdaq, but obtain a substitute listing for our common stock, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our common stock, warrants and pre-funded warrants would likely be significantly adversely affected. A delisting of our common stock from Nasdaq could also adversely affect our ability to obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners.

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