What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2022-11-10 · 199 added, 381 removed, 225 unchanged (72% of the section changed)

1 unchanged sentence

Balance Sheets

September 30, 2022

March 31, 2023

December 31, 2022

7 unchanged sentences

Operating lease right-of-use assets

$ 164,874,958

$ 175,697,097

Liabilities and Stockholders’ Equity:

5 unchanged sentences

Total current liabilities

Finance lease liabilities

Operating lease liabilities

5 unchanged sentences

2,500,000 shares authorized;

0 shares issued and outstanding as of September 30, 2022 and December 31, 2021

1,095,873 and 1,120,873 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.001 par value:

65,000,000 and 25,000,000 shares authorized as of September 30, 2022 and December 31, 2021, respectively;

14,942,958 and 14,918,887 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

65,000,000 shares authorized;

21,941,372 and 21,667,250 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

4 unchanged sentences

Total Liabilities and Stockholders’ Equity

See accompanying notes to the financial statements

$ 164,874,958

$ 175,697,097

accompanying notes to the financial statements

Statements of Operations

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating expenses:

5 unchanged sentences

( 7,507,605 )

( 27,751,887 )

( 22,035,023 )

Other income (expense)

2 unchanged sentences

Interest income

Loss on sale of fixed assets

Other income (expense), net

( 1,036,807 )

Net loss before income taxes

1 unchanged sentence

( 7,934,447 )

( 28,788,694 )

( 22,851,766 )

Income tax benefits

1 unchanged sentence

$ ( 7,934,447 )

$ ( 28,788,694 )

$ ( 22,851,766 )

Net loss per share, basic and diluted

1 unchanged sentence

accompanying notes to the financial statements

Statements of Changes in Stockholders’ Equity

and Nine Months Ended September 30, 2022

of Changes in Stockholders’ Equity

Months Ended March 31,2023

Preferred Stock

Additional Paid-In

2 unchanged sentences

$ ( 96,296,887 )

Stock-based compensation

Exercise of common stock options, net of shares withheld for exercise price

$ 133,771,467

( 7,934,447 )

Balance at March 31, 2022 (unaudited)

$ 125,386,089

$ ( 63,861,294 )

Stock-based compensation

Employee stock purchases

Exercise of common stock options, net of shares withheld for exercise price

( 9,960,526 )

Balance at June 30, 2022

$ 126,995,610

Conversion of preferred to common stock

Issuance costs associated with private placement offering

( 11,938,417 )

Stock-based compensation

Exercise of common stock options, net of shares withheld for exercise price

( 11,938,417 )

Balance at March 31, 2023 (unaudited)

$ 231,439,035

Balance at September 30, 2022 (unaudited)

$ ( 108,235,304 )

2 unchanged sentences

Statements of Changes in Stockholders’ Equity

and Nine Months Ended September 30, 2021

Months Ended March 31,2022

Additional Paid-In

1 unchanged sentence

$ 124,622,405

Stock-based compensation

Exercise of common stock warrants

Exercise of common stock options, net of shares withheld for exercise price

Issuance of common stock upon closing of follow-on offering, net of underwriting discounts and offering costs

Issuance of common stock in an at-the-market (“ATM”) offering

Issuance costs associated with ATM offering

$ ( 55,926,847 )

( 2,791,668 )

Balance at March 31, 2021 (unaudited)

$ ( 29,113,249 )

Stock-based compensation

Employee stock purchases

Exercise of common stock options, net of shares withheld for exercise price

Issuance of common stock warrants, note payable

Issuance of common stock, licensing agreement

( 7,934,447 )

Balance at June 30, 2021 (unaudited)

$ ( 43,146,101 )

Stock-based compensation

Exercise of common stock options, net of shares withheld for exercise price

Issuance of common stock upon closing of follow-on offering, net of underwriting discounts and offering costs

( 6,027,246 )

Balance at September 30, 2021 (unaudited)

Balance at March 31, 2022 (unaudited)

$ 125,386,089

2 unchanged sentences

Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Stock-based compensation

Issuance of common stock, licensing agreement

Amortization of debt issuance costs and discount

Payment-in-Kind interest

Non-cash operating lease, net

Loss on sale of fixed assets

Change in accrued interest income

( 1,697,811 )

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid assets and deposits

( 5,855,575 )

Accounts payable

Accrued expenses

( 1,020,102 )

Net cash used for operating activities

2 unchanged sentences

Cash flows from investing activities:

Purchases of investments

( 3,125,462 )

Proceeds from maturities of investments

Purchases of property and equipment

Proceeds from sale of property and equipment

Net cash used for investing activities

Net cash provided by (used for) investing activities

Cash flows from financing activities:

Proceeds from exercise of common stock warrants

Proceeds from exercise of employee stock options

Proceeds from employee stock purchases

Proceeds from follow-on offering, net of underwriting discounts and offering costs

Proceeds from note payable, net of debt issuance costs and discount of $ 652,061

Payments for debt issuance costs

Gross proceeds from an ATM offering

Payments for secondary registration statement costs

Payments for debt issuance costs

Payments for finance leases

Net cash (used for) provided by financing activities

Net cash provided by (used for) financing activities

Net change in cash and cash equivalents

6 unchanged sentences

Supplemental disclosures of non-cash investing and financing activities:

Property and equipment included in accounts payable

Offering and registration statement costs included in accounts payable

Deferred financing costs and offering and registration statement costs included in accrued expenses

Issuance of common stock warrants and final fee recognized as discount to note payable

Property and equipment included in accounts payable

accompanying notes to the financial statements

TO CONDENSED FINANCIAL STATEMENTS (unaudited)

the Three and Nine Months Ended September 30, 2022 and 2021)

the Three Months Ended March 31, 2023 and 2022)

Inc., a Delaware corporation (the “Company”), is a clinical-stage biotechnology company focused on development of targeted

therapies for multiple solid tumor indications.

The Company’s lead therapeutic candidate is gedatolisib, a potent, reversible dual

inhibitor that selectively targets all Class I PI3K isoforms and mTOR.

Its mechanism of action and pharmacokinetic properties are highly

differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together.

The Company initiated a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced breast cancer in 2022.

Its CELsignia companion

diagnostic platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to benefit

from already approved targeted therapies.

The Company’s lead therapeutic candidate is gedatolisib, a potent pan-PI3K and

mTOR inhibitor.

Its mechanism of action and pharmacokinetic properties are highly differentiated from other currently approved and investigational

therapies that target PI3K or mTOR alone or together.

A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with

fulvestrant with or without palbociclib in patients with HR+/HER2- advanced breast cancer is currently enrolling patients.

Its CELsignia

companion diagnostic platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to

benefit from already approved targeted therapies.

The Company was co-founded in 2012 by Brian F.

Sullivan and Dr.

Laing and is based

in Minnesota.

is based in Minnesota.

The Company has not generated any revenues to date.

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and the related footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected during the

remainder of the current year or for any future period.

results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected during the remainder of

the current year or for any future period.

uses estimates and assumptions in preparing these unaudited condensed financial statements in accordance with U.S.

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Company is subject to risks common to companies in the development stage including, but not limited to, dependency on the clinical and

commercial success of its initial drug product, gedatolisib, the clinical and commercial success of its diagnostic tests, ability to

obtain regulatory approval of its drug product, gedatolisib, ability to obtain regulatory approval of its diagnostic tests, the need

for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians

and consumers, and significant competition.

commercial success of its diagnostic tests, ability to obtain regulatory approval of its diagnostic tests, the clinical and commercial

success of its initial drug product, gedatolisib, the need for substantial additional financing to achieve its goals, uncertainty of

broad adoption of its approved products, if any, by physicians and consumers, and significant competition.

Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service providers,

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research and development expenses.

The Company accrues for these costs based on factors such as estimates of the work completed and in

accordance with service agreements with its third-party service providers.

The Company makes significant judgments and estimates in determining

the accrued liabilities balance in each reporting period.

As actual costs become known, the Company adjusts its prepaid assets or accrued

The Company has not experienced any material differences between accrued costs and actual costs incurred.

However, the status

and timing of actual services performed, number of patients enrolled, and the rate of patient enrollments may vary from the Company’s

estimates, resulting in an adjustment to expense in future periods.

Changes in these estimates that result in material changes to the

Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations.

of New or Revised Accounting Standards

to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), a company constituting an “emerging growth company”

is, among other things, entitled to rely upon certain reduced reporting requirements.

The Company is an emerging growth company but has

irrevocably elected not to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or

revised accounting standards.

As a result, the Company will comply with new or revised accounting standards on the relevant dates on

which adoption of such standards is required for public companies that are not emerging growth companies.

The Company’s emerging

growth company filer status will cease on its Form 10-K filing for the year ended December 31, 2022.

The Company primarily relies on a compilation of progress reports from third-party service providers,

including the respective invoicing, to record actual expenses, along with determining changes to prepaid assets and accrued liabilities.

To date, the company believes utilization of third-party reports most accurately reflects expenses incurred.

As the current VIKTORIA-1

Phase 3 trial ramps up site activation and patient enrollment, the Company’s estimated expenses in future periods and actual services

performed may vary from these estimates, and these estimates may become more significant.

Changes in these estimates that result in material

changes to the Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations.

Adopted Accounting Pronouncements

May 2021, the FASB issued ASU No.

2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified

Written Call Options, which provides guidance on how an issuer should account for modifications made to equity-classified written call

The guidance in the ASU requires the issuer to treat the modification of an equity-classified warrant that does not cause the

warrant to become liability-classified as an exchange of the original warrant for a new warrant.

The issuer should measure the effect

of a modification as the difference between the fair value of the modified warrant and the fair value of that warrant immediately before

modification.

The standard is effective for all entities for all fiscal years beginning after December 15, 2021.

The Company adopted

this accounting standard effective January 1, 2022, and based on the standard, determined that the Representative’s Warrant amendment

was equity-classified, treated as a deemed dividend within Additional Paid-in Capital, and the estimated incremental fair value of the

modification for the Representative’s Warrant at the date of amendment was $ 271,988 .

June 2016 and related amendments, the FASB issued Accounting Standards Update (ASU) No.

2016-13, Financial Instruments – Credit

Losses (Topic 326).

This guidance changes the methodology to be used to measure credit losses for certain financial instruments and financial

The new methodology requires the recognition of an allowance that reflects the current estimate of credit losses expected to

be incurred over the life of the financial asset.

The Company adopted this standard effective January 1, 2023.

The adoption of the standard

did not have a material impact on the Company’s consolidated financial statements.

Net Loss Per Common Share

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Therefore, the weighted-average shares outstanding used to

calculate both basic and diluted loss per common share is the same.

the three and nine months ended September 30, 2022 and 2021, potentially dilutive securities excluded from the computations of diluted

weighted-average shares outstanding were options to purchase 1,919,114 and 1,184,721 shares of common stock, respectively, warrants to

purchase 309,652 and 378,442 shares of common stock, respectively, and 3,273 and 2,964 shares of restricted common stock, respectively.

accordance with ASU 2021-04, for purposes of calculating basic and diluted net loss per share for the three- and nine-month periods ended

September 30, 2022, the reported net loss was increased by approximately $ 272,000 related to the deemed dividend resulting from the amendment

to the warrant agreement as further discussed in Note 5.

This adjustment increased the basic and diluted net loss per share by $ .02 for

the three- and nine-month periods ended September 30, 2022.

calculate both basic and diluted loss per common share are the same.

the three months ended March 31, 2023 and 2022, potentially dilutive securities excluded from the computations of diluted weighted-average

shares outstanding were preferred stock on an as-if-converted to common stock basis of 10,958,730 and zero shares of common stock, respectively,

options to purchase 2,068,458 and 1,353,406 shares of common stock, respectively, warrants to purchase 7,266,102 and 377,652 shares of

common stock, respectively, and 3,273 and 2,964 shares of restricted common stock, respectively.

securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and reported

at historical cost adjusted for amortization of premiums and accretion of discounts.

Expected credit losses, if any, are recorded through

the establishment of an allowance for credit losses.

All of the Company’s held-to-maturity

investment securities are U.S.

Treasury and agencies securities that are guaranteed or otherwise

supported by the United States government and have no history of credit losses.

Accordingly, the Company does not expect to incur any

credit losses on held-to-maturity investment securities and has no allowance

for credit losses recorded for these securities.

following table summarizes the Company’s held-to-maturity investment securities at amortized cost as of March 31, 2023

and December 31, 2022:

of Investment

Amortized Cost, as Adjusted

Gross Unrealized Holding Gains

Gross Unrealized Holding Losses

Estimated Fair Value

March 31, 2023

Gross Unrealized

Holding Gains

Estimated Fair

Governmental Agency Securities

Treasury Notes

$ 123,839,227

$ 123,853,126

Amortized Cost, as Adjusted

Gross Unrealized Holding Gains

Gross Unrealized Holding Losses

Estimated Fair Value

December 31, 2022

Gross Unrealized

Holding Gains

Estimated Fair

Governmental Agency Securities

Treasury Notes

$ 144,015,954

$ 144,087,110

Company had no investments as of March 31, 2022.

and Finance Leases

Company leases its corporate space in Minneapolis, Minnesota.

In September 2017, the Company entered into a non-cancelable operating

lease agreement for building space.

The lease commenced, and the Company moved to the facility in May 2018, in conjunction with the termination

of its then existing lease.

Rent expense is recorded on a straight-line basis over the lease term.

In July 2020, the Company signed an

amendment to extend this lease through April 30, 2022.

The lease amendment provides for monthly rent, real estate taxes and operating

As a result of the lease amendment, the Company recorded an incremental $ 197,211 in the operating right-of-use (“ROU”)

asset and lease liability.

In July 2021, the Company signed the second amendment to extend this lease through April 30, 2023.

amendment provides for monthly rent, real estate taxes and operating expenses.

As a result of the lease amendment, the Company recorded

an incremental $ 193,571 in the operating right-of-use (“ROU”) asset and lease liability.

In July 2022, the Company signed

the third amendment to extend this lease through April 30, 2024.

This amendment provides for monthly rent, real estate taxes and operating

The Company recorded an incremental $ 195,437 in the operating right-of-use (“ROU”) asset and lease liability pertaining

to this amendment.

May 2018, the Company entered into a non-cancelable finance lease agreement for office equipment with a five-year term.

The underlying

assets are included in furniture and equipment.

The lease contains a bargain purchase option at the end of the lease.

an implicit rate is not provided, the Company uses its incremental borrowing rate based on the information available at the lease commencement

date in determining the present value of the lease payments.

In March 2023, the Company signed the fourth amendment to extend this lease

through April 30, 2026.

This amendment provides for monthly rent, real estate taxes and operating expenses.

The Company recorded an incremental

$ 355,578 in the operating right-of-use (“ROU”) asset and lease liability pertaining to this amendment.

Research Studies

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parties that include, among others, arrangements with vendors, consultants, CMO’s, and CRO’s.

The Company currently has five

The Company currently has four

Phase 2 clinical trial agreements in place to evaluate targeted therapies selected with one of our CELsignia tests.

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based on time and material.

In addition, contracts related to the Company’s Phase 3 clinical study (VIKTORIA-1) are

generally cancelable with reasonable notice within 120 days and the Company’s obligations under these contracts are primarily based

on services performed through termination dates plus certain cancelation charges, if any, as defined in each of the respective agreements.

In addition, these agreements may, from time to time, be subjected to amendments as a result of any change orders executed by the parties.

As of September 30, 2022, the Company had only one material non-cancelable contractual commitment with respect to these arrangements,

which totaled approximately $ 2.5 million.

Stockholders’

September 13, 2022, the Company entered into a First Amendment to Representative’s Warrant (the “Warrant Amendment”)

with Craig-Hallum Capital Group LLC (“Craig-Hallum”), amending the terms of that certain Representative’s Warrant,

dated September 22, 2017 (the “Representative’s Warrant”) issued by the Company to Craig-Hallum in connection with

the Company’s initial public offering.

Under the terms of the Warrant Amendment, (i) the number of shares of the Company’s

common stock issuable upon exercise of the Representative’s Warrant was reduced from 138,000 shares to 70,000 shares, and (ii)

the exercise period of the Representative’s Warrant was extended three years to September 19, 2025 .

There were no other material

amendments or modifications to the Representative’s Warrant.

The estimated incremental fair value of the Representative’s

Warrant at the date of amendment was $ 271,988 .

As the Company has an accumulated deficit balance in Retained Earnings, the incremental

impact will be recorded as a deemed dividend, classified within Additional Paid-in Capital.

September 1, 2022, the Company held a Special Meeting of Stockholders, at which the Company’s stockholders approved a proposal

to amend the Company’s Certificate of Incorporation to increase the authorized number of the Company’s Common Stock from

30,000,000 shares to 65,000,000 shares.

May 15, 2022, the Company entered into a securities purchase agreement with certain institutional and other accredited investors for

the sale of Company common stock, preferred stock that may be convertible into common stock and warrants initially exercisable for preferred

stock for $ 100 million in the aggregate, before deducting placement agent fees and other offering expenses.

Pursuant to the securities

purchase agreement, investors will purchase shares of common stock and preferred stock at a price per share of $ 5.75 (on an as converted

to common stock basis).

For each share of common stock and each 1/10 of a share of preferred stock purchased, investors will receive

a warrant exercisable for 0.40 shares of common stock.

The exercise price of the warrants will be at a 40 % premium to the price paid

by investors for the initial shares of common stock purchased in the private placement.

The preferred stock will be convertible into

common stock at the holder’s election, subject to certain limitations such as beneficial ownership.

The closing of the private

placement is conditioned on, among other customary items, the first patient enrolled in the Company’s Phase 3 clinical

study (VIKTORIA-1) having received their first dose of treatment at a clinical site located in the United States, provided that if such

date does not occur on or before December 31, 2022, each investor will have the right to terminate its obligation to purchase securities

under the securities purchase agreement.

The Company also entered into a customary registration rights agreement with the investors pursuant

to which it agreed to file a registration statement with the SEC registering the resale of (i) the shares of common stock to be issued

and sold in the private placement, (ii) the shares of common stock issuable upon conversion of the preferred stock purchased in the private

placement and (iii) the shares of common stock issuable upon conversion of the shares of preferred stock that may be issued upon exercise

of warrants purchased in the private placement.

As of September 30, 2022, the Company has incurred $ 142,241 in fees related to the transaction.

February 4, 2022, the Company entered into an Open Market Sale Agreement SM with Jefferies LLC, as agent (“Jefferies”),

pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our common stock having an aggregate offering

price of up to $ 50,000,000 .

The Company will pay Jefferies a commission equal to 3.0 % of the aggregate gross proceeds from each sale

of such shares.

On October 12, 2022, pursuant to the above agreement, the Company sold 500,000 shares of common stock in a single transaction

at a price of $ 10.35 per share, generating gross proceeds of $ 5.2 million ($ 4.8 million net of commissions and offering expenses).

July 1, 2021, the Company completed a follow-on offering whereby it sold 2,250,000 shares of common stock at a public offering price

of $ 25.00 per share.

The offering generated approximately $ 56.3 million before deducting underwriting discounts of approximately $ 3.4

million and offering expenses of approximately $ 0.1 million.

February 26, 2021, the Company completed a follow-on offering whereby it sold 1,971,100 shares of common stock (including 257,100 shares

of common stock in connection with the full exercise of the underwriters’ option to purchase additional shares) at a public offering

price of $ 14.00 per share.

The aggregate gross proceeds from the sale of shares in the follow-on offering, including the sale of shares

pursuant to the full exercise of the underwriters’ option to purchase additional shares, was approximately $ 27.6 million before

deducting underwriting discounts of approximately $ 1.6 million and offering expenses of approximately $ 0.2 million.

June 5, 2020, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B.

Riley FBR, Inc.

(the “Agent”).

Pursuant to the ATM Agreement, the Company was able to offer and sell from time to time, at its option, shares

of common stock having an aggregate offering price of up to $ 10,000,000 , par value $ 0.001 per share (the “Placement Shares”),

through the Agent.

the nine months ended September 30, 2022 and 2021, the Company sold 0 and 3,082 shares, respectively, of common stock pursuant to the

ATM Agreement, at an average selling price of $ 12.64 per share.

On February 23, 2021, in conjunction with the Company’s follow-on

offering, the ATM Agreement was terminated through the Agent.

In addition, contracts related to the Company’s Phase 3 clinical study (VIKTORIA-1) are generally cancelable

with reasonable notice within 120 days and the Company’s obligations under these contracts are primarily based on services performed

through termination dates plus certain cancelation charges, if any, as defined in each of the respective agreements.

In addition, these

agreements may, from time to time, be subjected to amendments as a result of any change orders executed by the parties.

As of March 31,

2023, the Company had only one material non-cancelable contractual commitment with respect to these arrangements, which totaled approximately

$ 2.2 million.

Stockholders’ Equity

December 31, 2022, the Company’s authorized capital stock consisted of 65,000,000 shares of $ .001 par value common stock, of which

21,667,250 shares were outstanding, and 2,500,000 shares of $ .001 par value preferred stock, of which 1,120,873 shares were outstanding.

March 31, 2023, one of the Company’s preferred shareholders elected to convert 25,000 shares of Series A Convertible Preferred

Stock into 250,0000 shares of Common Stock, in accordance with the Securities Purchase Agreement dated May 15, 2022.

The cost basis of

the shares transferred is $ 5.75 per share.

March 31, 2023, the Company’s authorized capital stock consisted of 65,000,000 shares of common stock, of which 21,941,372 shares

were outstanding, and 2,500,000 shares of preferred stock, including 1,850,000 shares designated as Series A Preferred Stock, of which

1,095,873 shares were outstanding.

As of March 31, 2023, no dividends have been declared on the Company’s capital stock.

Stock-Based Compensation

following table summarizes the activity for all stock options outstanding for the nine months ended September 30:

following table summarizes the activity for all stock options outstanding for the three months ended March 31:

of Stock Options Activity

Weighted Average Exercise Price

Exercise Price

Options outstanding at beginning of year

Balance at September 30

Options exercisable at September 30:

Balance at March 31

Options exercisable at March 31:

Weighted Average Grant Date Fair Value for options granted during the period:

following table summarizes additional information about stock options outstanding and exercisable at September 30, 2022:

following table summarizes additional information about stock options outstanding and exercisable at March 31, 2023:

of Stock Options Outstanding and Exercisable

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Aggregate Intrinsic Value

Company recognized stock-based compensation expense for stock options of $ 1,162,751 and $ 673,022 for the three months ended September

30, 2022 and 2021, respectively and $ 3,329,969 and $ 1,611,575 for the nine months ended September 30, 2022 and 2021, respectively.

May 2022, the Company modified the exercise price on 776,324 stock option awards to $ 5.50 , the closing market price on the Nasdaq Capital

Market on May 17, 2022.

The effect of this modification on stock-based compensation was $ 49,088 for the three months ending September

30, 2022 and $ 477,431 for the nine months ending September 30, 2022.

Company recognized stock-based compensation expense for stock options of $ 1,222,328 and $ 709,509 for the three months ended March 31,

2023 and 2022, respectively.

In May 2022, the Company modified the exercise price on 776,324 stock option awards to $ 5.50 , the closing

market price on the Nasdaq Capital Market on May 17, 2022.

The effect of this modification on stock-based compensation was $ 39,612 and

$ 0 for the three months ending March 31, 2023 and 2022, respectively.

The effect of this modification on stock-based compensation over

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No director or officer awards were

The effect of this modification on stock-based compensation was $ 21,778 and $ 0 for the three months ended September 30, 2022

and 2021, respectively and $ 75,562 and $ 0 for the nine months ended September 30, 2022 and 2021, respectively.

The effect of this modification

on stock-based compensation over the remaining service period will be approximately $ 219,000 .

In May 2020, the Company modified the exercise

price on 203,750 stock option awards to $ 5.10 , the closing market price on the Nasdaq Capital Market on May 14, 2020.

No director or

officer awards were modified.

The effect of this modification on stock-based compensation was $ 7,681 and $ 12,602 for the three months

ended September 30, 2022 and 2021, respectively and $ 30,897 and $ 34,396 for the nine months ended September 30, 2022 and 2021.

of this modification on stock-based compensation over the remaining service period will be approximately $ 27,000 .

Black-Scholes option-pricing model was used to estimate the grant date fair value of equity-based awards with the following weighted-average

assumptions for the nine months ended September 30:

The effect of this modification on stock-based compensation was $ 16,924 and $ 28,029 for the three months ended March 31, 2023

and 2022, respectively.

The effect of this modification on stock-based compensation over the remaining service period will be approximately

In May 2020, the Company modified the exercise price on 203,750 stock option awards to $ 5.10 , the closing market price on the

Nasdaq Capital Market on May 14, 2020.

No director or officer awards were modified.

The effect of this modification on stock-based compensation

was $ 7,108 and $ 11,614 for the three months ended March 31, 2023 and 2022, respectively.

The effect of this modification on stock-based

compensation over the remaining service period will be approximately $ 13,000 .

Black-Scholes option-pricing model was used to estimate the fair value of equity-based awards with the following weighted-average assumptions

for the three months ended March 31:

of Assumptions for Fair Value of Equity-based Awards

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76.2 % - 76.5 %

76.6 % - 76.9 %

Expected life (years)

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with the agreements would also be cancelled.

Company had 3,273 and 2,964 shares of restricted stock outstanding as of September 30, 2022 and 2021, respectively, and 250 and 0 shares

of restricted stock vested during the three months ended September 30, 2022 and 2021.

The Company recognized stock-based compensation

expense for restricted stock of $ 7,245 and $ 20,792 for the three months ended September 30, 2022 and 2021, respectively and $ 36,686 and

$ 59,359 for the nine months ended September 30, 2022 and 2021, respectively.

Company initially reserved a maximum of 750,000 shares of common stock for issuance under the 2017 Amended and Restated Stock Incentive

Plan (the “2017 Plan”).

The number of shares reserved for issuance was automatically increased by 102,540 , 102,998 and 149,189

shares on January 1, 2020, 2021 and 2022, respectively, and will increase automatically on January 1 each year from 2023 through 2027

by the number of shares equal to 1.0% of the aggregate number of outstanding shares of Company common stock as of the immediately preceding

December 31 .

At the Annual Meeting held on May 12, 2021 and May 12, 2022, the stockholders approved a one-time, 500,000 increase each

year for a total increase of 1,000,000 to the number of shares reserved for issuance under the 2017 Plan.

However, the Company’s

board may reduce the amount of the increase in any particular year.

The total remaining shares available for grant under the Company’s

2017 Plan as of September 30, 2022 was 325,094 .

unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized as follows for the year ended:

restricted stock awards were granted during the three months ended March 31, 2023 and 2022.

The Company had 3,273 and 2,964 shares of

restricted stock outstanding as of March 31, 2023 and 2022, respectively, and 0 shares of restricted stock vested during the three months

ended March 31, 2023 and 2022.

The Company recognized stock-based compensation expense for restricted stock of $ 4,642 and $ 20,344 for

the three months ended March 31, 2023 and 2022, respectively.

Company initially reserved a maximum of 750,000

shares of common stock for issuance under the 2017 Amended and Restated Stock Incentive Plan (the “2017 Plan”).

number of shares reserved for issuance was automatically increased by 102,998 , 149,189

shares on January 1, 2021, 2022 and 2023, respectively, and will increase

automatically on January 1 of each year from 2024 through 2027 by the number of shares equal to 1.0% of the aggregate number of

outstanding shares of Company common stock as of the immediately preceding December 31.

At the Annual Meeting held on May 12,

2021 and May 12, 2022, the stockholders approved a one-time, 500,000

increase each year for a total of 1,000,000

increase, to the number of shares reserved for issuance under the 2017 Plan.

However, the Company’s board may reduce the

amount of the increase in any particular year.

The total remaining shares available for grant under the Company’s 2017 Plan as

of March 31, 2023 was 343,114 .

unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized as follows:

of Unrecognized Compensation Cost

Total estimated compensation cost to be recognized

Company recognized stock-based compensation expense related to its employee stock purchase plan of $ 53,058 and $ 6,102 for the three months

ended September 30, 2022 and 2021, respectively and $ 132,129 and $ 18,397 for the nine months ended September 30, 2022 and 2021, respectively.

The Company initially reserved a total of 100,000 shares for issuance under the employee stock purchase plan.

The number of shares reserved

for issuance was automatically increased by 51,270 , 51,499 and 74,594 shares on January 1, 2020, 2021 and 2022, respectively, and will

increase automatically on each subsequent January 1 by the number of shares equal to 0.5% of the total outstanding number of shares of

Company common stock as of the immediately preceding December 31.

However, the Company’s board may reduce the amount of the increase

in any particular year.

The total remaining shares available for issuance under the employee stock purchase plan as of September 30,

2022 was 208,929 .

Company recognized total stock-based compensation expense as follows for the three and nine months ended September 30:

Schedule of Stock-based Compensation Expense

Company recognized stock-based compensation expense related to its employee stock purchase plan of $ 46,312 and $ 26,148 for the three

months ended March 31, 2023 and 2022, respectively.

The Company initially reserved a total of 100,000 shares for issuance under the employee

stock purchase plan.

The number of shares reserved for issuance was automatically increased by 51,499 , 74,594 and 108,337 shares on January

1, 2021, 2022 and 2023, respectively, and will increase automatically on each subsequent January 1 by the number of shares equal to 0.5%

of the total outstanding number of shares of Company common stock as of the immediately preceding December 31.

However, the Company’s

board may reduce the amount of the increase in any particular year.

The total remaining shares available for issuance under the employee

stock purchase plan as of March 31, 2023 was 300,485 .

Company recognized total stock-based compensation expense as follows for the three months ended March 31:

of Stock-based Compensation Expense

Three Months Ended

Nine Months Ended

September 30,

Stock-based compensation expense in operating expenses:

3 unchanged sentences

Lending Fund I, LP, a Delaware limited partnership (“Innovatus”) in its capacity as Collateral Agent and sole Lender.

Lender agreed to loan up to $ 25 million in three tranches consisting of (i) a $ 15.0 million non-contingent term A loan that was funded

on April 8, 2021, (ii) a $ 5 million term B loan to be funded upon request of the Company no later than March 31, 2022, and (iii) a $ 5

million term C loan to be funded upon request of the Company no later than March 31, 2023 (collectively the “Term Loans”).

The Company is no longer eligible to draw on the term B loan.

Funding of the term C is subject to the Company’s ability to achieve

certain milestones.

Loan Agreement also contains certain events of default, warranties and covenants of the Company.

In connection with each funding of

the Term Loans, the Company is required to issue Innovatus a warrant (the “Warrants”) to purchase a number of shares of

the Company’s stock equal to 2.5% of the principal amount of the relevant Term Loan funded by the exercise price, which will

be based on the lower of (i) $14.40 per share or (ii) the volume weighted price per share of the Company’s stock for the

five-trading day period ending on the last trading day immediately preceding the funding date of the Term C loan .

The warrants may be exercised on a cashless basis and are immediately exercisable through the tenth anniversary of the applicable

funding date.

In connection with the first tranche of the Term Loans, the Company issued a warrant to Innovatus to purchase 26,042 shares

of the Company’s common stock at an exercise price of $ 14.40 per

The company evaluated the warrant under ASC 470, debt, and recognized an additional debt discount of approximately $ 0.3 million

based on the relative fair value of the base instruments and warrants.

The company calculated the fair value of the warrant using

the Black-Scholes model.

In connection with the funding of the first tranche of the Term Loans, a final fee of approximately $ 0.7

million was recorded as additional principal as a debt discount, and a facility fee of approximately $ 0.1

million was recorded as additional debt discount.

The Company is also required to maintain a minimum cash balance in agreement with

the term loans’ default terms.

August 9, 2022, the Company amended the Loan Agreement.

Under the amended Loan Agreement, Innovatus, as Lender, has agreed to loan up

to $ 75 million, a $ 50 million increase from the original Loan Amount, in five tranches consisting of:

(i) a $ 15 million term A loan that

was funded on April 8, 2021 upon entering into the original Loan Agreement, (ii) a $ 20 million term B loan to be funded upon request

of the Company no later than December 31, 2022, with such funding conditioned upon the closing of the Company’s $ 100 million private

placement announced on May 16, 2022, (iii) a $ 10 million term C loan to be funded upon request of the Company no later than April 1,

2024, (iv) a $ 20 million term D loan to be funded upon request of the Company no later than November 1, 2024, and (v) a $ 10 million term

E loan to be funded upon request of the Company no later than February 28, 2025.

Funding of the term B loan is conditioned upon the closing

of the Company’s $ 100 million private placement announced on May 16, 2022, and funding of the term C, D, and E loans are conditioned

upon satisfaction of certain clinical trial milestones and certain financial covenants determined on a pro forma as-funded basis.

the amended Loan Agreement, Innovatus has the right, at its election and until August 9, 2025, the third anniversary of the loan amendment

date, to convert into Common Stock up to (1) 20% of the outstanding principal amount of term A loan, and (ii) an additional 7% of the

amount by which the aggregate principal amount of the funded term B, C, D, and E loans exceed $35 million, provided that the aggregate

outstanding principal amount of all term loans is at least $35 million, which such conversion based upon a price per share equal to $10.00 .

Company is entitled to make interest-only payments for forty-eight months, or up to sixty months from the original Loan Agreement date

if certain conditions are met.

The Term Loans will mature on April 8, 2027, the sixth anniversary of the initial funding date, and will

bear interest at a rate equal to the sum of (a) the greater of (i) Prime Rate (as defined in the amended Loan Agreement) or (ii) 3.25%,

Additionally, the Company elected to make 4.95% of the interest rate as payable in-kind, which shall accrue as principal monthly.

The Amended Loan Agreement includes certain other fees, such as a final fee of 4.5% of the funded loan amounts not converted into equity

by the lender, which apply if prepayment, an event of default, or change of control occurs prior to August 9, 2025, the third anniversary

of the Amendment date .

Subject to certain other conditions, no final fee will be payable after August 9, 2025.

The Company has the option

to prepay the loan at any time following the first anniversary of the amended loan agreement date, with tiered prepayment fees ranging

from 0 to 1% based on when the prepayment occurs.

Upon a change in control or event of default, mandatory prepayment will be required,

and if such an event occurs prior to the first anniversary of the Amendment date, an additional prepayment fee of 3.0 % applies.

amended Loan Agreement remains secured by all assets of the Company.

Proceeds will be used for working capital purposes and to fund the

Company’s general business requirements.

The amended Loan Agreement contains customary representations and warranties and covenants,

subject to customary carve outs, and includes financial covenants related to or based upon liquidity, trailing twelve months revenue

and the funded loan amounts.

connection with the original and amended Loan Agreement and the funding of the first tranche of the Term Loans, the Company incurred

debt issuance costs of approximately $ 0.7 million.

The debt issuance costs, and the debt discount are amortized to interest expense using

the effective interest method over the life of the Term Loans.

The carrying value of the debt approximates fair value as of September

debt consisted of the following:

Schedule of Long-term Debt

September 30, 2022

Payment-in-Kind interest (added to principal)

to $ 75 million, a $ 50 million increase from the original Loan Amount.

As of March 31, 2023, term loans totaling $ 35 million are outstanding

under the Loan Agreement, including the initial Term A loan of $ 15 million which was funded on April 8, 2021, and a $ 20 million Term

B loan which was funded on December 22, 2022.

debt consisted of the following at March 31, 2023 and December 31, 2022:

of Long-term Debt

March 31, 2023

December 31, 2022

PIK interest (added to principal)

unamortized debt issuance costs

1 unchanged sentence

Total long-term debt

principal payments, including the final fee, are as follows:

principal payments, including the incurred PIK interest, are as follows:

of Long Term Debt Future Principal Payments

April 8, 2021, the Company entered into a license agreement with Pfizer to research, develop, manufacture and commercialize gedatolisib,

a potent, well-tolerated, reversible dual inhibitor that selectively targets all Class I PI3K isoforms and mTOR.

The Company paid Pfizer

$ 5.0 million in upfront fees and issued to Pfizer $ 5.0 million of shares of the Company’s common stock pursuant to an Equity Grant

The upfront payment and the issuance of shares were expensed to research & development in full for the three months ending

June 30, 2021.

Company is also required to make milestone payments to Pfizer upon achievement of certain development and commercial milestone events,

up to an aggregate of $ 335.0 million.

Additionally, the Company will pay Pfizer tiered royalties on sales of gedatolisib at percentages

ranging from the low to mid-teens, which may be subject to deductions for expiration of valid claims, amounts due under third-party licenses

and generic competition.

Unless earlier terminated, the license agreement will expire upon the expiration of all royalty obligations.

The royalty period will expire on a country-by-country basis upon the later of (a) 12 years following the date of first commercial sale

of such product in such country, (b) the expiration of all regulatory or data exclusivity in such country for such product or (c) the

date upon which the manufacture, use, sale, offer for sale or importation of such product in such country would no longer infringe, but

for the license granted in the license agreement, a valid claim of a licensed patent right.

Company has the right to terminate the license agreement for convenience upon 90 days’ prior written notice.

Pfizer may not terminate

the agreement for convenience.

Either the Company or Pfizer may terminate the license agreement if the other party is in material breach

and such breach is not cured within the specified cure period.

In addition, either the Company or Pfizer may terminate the license agreement

in the event of specified insolvency events involving the other party.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements