What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 291 added, 262 removed, 318 unchanged (63% of the section changed)

1 unchanged sentence

Balance Sheets

September 30, 2024

December 31, 2023

Current Assets:

Cash and cash

Cash and cash equivalents

Other current assets

1 unchanged sentence

Property and equipment, net

Operating lease right-of-use

Operating lease right-of-use assets

$ 273,036,970

$ 191,219,398

Liabilities and Stockholders’

Liabilities and Stockholders’ Equity:

Current Liabilities:

5 unchanged sentences

Note payable, non-current

Commitments and Contingencies

Total Liabilities

Commitments and Contingencies (Note 5)

Stockholders’ Equity:

1 unchanged sentence

2,500,000 shares authorized;

and 854,134 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Common stock, $ 0.001

317,577 and 854,134 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Common stock, $ 0.001 par value:

65,000,000 shares authorized;

and 25,506,012

shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

37,116,267 and 25,506,012 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

2 unchanged sentences

( 160,076,003 )

Stockholders’ Equity

Liabilities and Stockholders’ Equity

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

$ 273,036,970

2 unchanged sentences

Statements of Operations

Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

Research and development

General and administrative

5 unchanged sentences

( 46,501,059 )

Other income (expense)

Other (expense) income

Interest expense

4 unchanged sentences

Interest income

Other income (expense),

loss before income taxes

Other income, net

Net loss before income taxes

( 29,791,789 )

8 unchanged sentences

Net loss per share, basic and diluted

Weighted average common shares outstanding,

basic and diluted

Weighted average common shares outstanding, basic and diluted

accompanying notes to the condensed financial statements

Statements of Changes in Stockholders’ Equity

and Six Months Ended June 30, 2024

and Nine Months Ended September 30, 2024

Preferred Stock

Balance at December 31, 2023

3 unchanged sentences

Stock-based compensation

Exercise of common stock warrants, net of shares withheld for exercise

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

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

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

Conversion of preferred to common stock

1 unchanged sentence

( 21,612,455 )

Balance at March 31, 2024

Balance at March 31, 2024 (unaudited)

$ 315,393,843

4 unchanged sentences

Conversion of preferred to common stock

Exercise of common stock warrants, net of shares withheld for exercise

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

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

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

Issuance of common stock in an ATM offering

Issuance costs associated with an ATM offering

Issuance of common stock upon closing of follow-on

offering, net of underwriting discounts and offering costs

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

Issuance of common stock warrants, note payable

1 unchanged sentence

( 23,721,820 )

at June 30, 2024 (unaudited)

Balance at June 30, 2024 (unaudited)

$ 382,057,737

1 unchanged sentence

$ 176,684,792

Stock-based compensation

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

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

( 29,791,789 )

Balance at September 30, 2024 (unaudited)

$ 384,873,261

$ ( 235,202,067 )

$ 149,708,628

accompanying notes to the condensed financial statements

Statements of Changes in Stockholders’ Equity

and Six Months Ended June 30, 2023

and Nine Months Ended September 30, 2023

Preferred Stock

Additional Paid-In

Balance at December 31, 2022

3 unchanged sentences

Stock-based compensation

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

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

Conversion of preferred to common stock

Issuance costs associated with private placement

( 11,938,417 )

Balance at March 31, 2023

$ 231,439,035

Issuance costs associated with private placement offering

( 11,938,417 )

Balance at March 31, 2023 (unaudited)

$ 231,439,035

4 unchanged sentences

Conversion of preferred to common stock

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

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

( 14,587,687 )

at June 30, 2023 (unaudited)

Balance at June 30, 2023 (unaudited)

$ 232,932,164

4 unchanged sentences

$ 110,132,341

Stock-based compensation

Conversion of preferred to common stock

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

( 18,404,540 )

Balance at September 30, 2023 (unaudited)

$ 234,100,541

$ ( 141,227,531 )

$ 234,100,541

$ ( 141,227,531 )

accompanying notes to the condensed financial statements

Statements of Cash Flows

Months Ended June 30,

Cash flows from operating

Nine Months Ended September 30,

Cash flows from operating activities:

$ ( 75,126,064 )

$ ( 44,930,644 )

Adjustments to reconcile net loss to net cash

and cash equivalents used for operations:

Adjustments to reconcile net loss to net cash and cash equivalents used for operations:

Stock-based compensation

1 unchanged sentence

Payment-in-kind interest

Non-cash operating lease expense, net

Change in accrued

interest income

Non-cash operating lease, net

Change in accrued interest income

( 1,112,420 )

Changes in operating assets and liabilities:

Other current assets

( 1,065,732 )

Accounts payable

3 unchanged sentences

( 35,276,332 )

Cash flows from investing

Cash flows from investing activities:

Proceeds from maturities of investments

2 unchanged sentences

( 184,779,534 )

Purchases of property

and equipment

Net cash (used for)

provided by investing activities

Purchases of property and equipment

Net cash (used for) provided by investing activities

( 100,627,800 )

Cash flows from financing

Cash flows from financing activities:

Proceeds from exercise of common stock warrants

1 unchanged sentence

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 $ 2,429,917

Proceeds from an ATM offering, net of issuance

Payments for secondary registration statement

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

Proceeds from note payable, net of debt issuance costs and discount of $ 2,437,644

Proceeds from an ATM offering, net of issuance costs

Payments for secondary registration statement costs

Payments for debt issuance costs

Payments for finance

Payments for finance leases

Net cash provided by financing activities

Net change in cash and cash equivalents

( 18,059,485 )

Cash and cash equivalents:

1 unchanged sentence

End of period

Supplemental disclosure

of cash flow information:

Supplemental disclosure of cash flow information:

Interest paid

Supplemental disclosures

of non-cash investing and financing activities:

Offering and registration statement costs included

in accounts payable

Property and equipment included in accounts

Non-cash interest receivable

Common stock warrants issued with note payable

Supplemental disclosures of non-cash investing and financing activities:

Offering and registration statement costs included in accounts payable

Property and equipment included in accounts payable

Common stock warrants issued with note payable transaction

accompanying notes to the condensed financial statements

TO CONDENSED FINANCIAL STATEMENTS (unaudited)

the Three and Six Months Ended June 30, 2024 and 2023)

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

targeted therapies for treatment of multiple solid tumor indications.

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.

A Phase 1b/2 clinical trial, CELC-G-201, evaluating gedatolisib in combination with darolutamide in

patients with metastatic castration resistant prostate cancer, was initiated in the first quarter of 2024 and is currently enrolling

A Phase 3 clinical trial, VIKTORIA-2, evaluating gedatolisib plus a CDK4/6 inhibitor and fulvestrant as first-line

treatment for patients with HR+/HER2- advanced breast cancer is expected to begin enrolling patients in the second quarter of 2025.

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

the Three and Nine Months Ended September 30, 2024 and 2023)

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

therapies for treatment of multiple solid tumor indications.

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

A Phase 1b/2 clinical trial, CELC-G-201, evaluating gedatolisib in combination with darolutamide in patients with metastatic

castration resistant prostate cancer, was initiated in the first quarter of 2024 and is currently enrolling patients.

A Phase 3 clinical

trial, VIKTORIA-2, evaluating gedatolisib plus a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR+/HER2-

advanced breast cancer is expected to begin enrolling patients in the second quarter of 2025.

The Company was co-founded in 2012 by Brian

Sullivan and Dr.

Laing and is based in Minnesota.

The Company has not

generated any revenues to date.

The Company has not generated any revenues to date.

Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements

of Presentation

accompanying unaudited financial statements include the accounts of the Company and have been prepared in accordance with Article 10

accompanying unaudited condensed financial statements include the accounts of the Company and have been prepared in accordance with Article

10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”).

Accordingly, as permitted by Article

the unaudited financial statements do not include all of the information required by accounting principles generally accepted in the

United States (“U.S.

The balance sheet at December 31, 2023 was derived from the audited financial statements at

that date and does not include all the disclosures required by U.S.

In the opinion of management, all adjustments which are of

a normal recurring nature and necessary for a fair presentation have been reflected in the financial statements.

10, the unaudited condensed financial statements do not include all of the information required by accounting principles generally accepted

in the United States (“U.S.

The balance sheet at December 31, 2023 was derived from the audited financial statements

at that date and does not include all the disclosures required by U.S.

In the opinion of management, all adjustments which are

of a normal recurring nature and necessary for a fair presentation have been reflected in the financial statements.

These unaudited condensed

1 unchanged sentence

and the related footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

results for the three and six months ended June 30, 2024 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 and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected during the

remainder of the current year or for any other future period.

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

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and Uncertainties

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 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,

which includes the conduct of preclinical studies and clinical trials.

These costs can be a significant component of the Company’s

research and development expenses.

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 and CELC-G-201 Phase 1b/2 trials ramp 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.

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

of its initial drug product, gedatolisib, the regulatory approval of 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, which includes the conduct of preclinical studies and clinical trials.

These costs can be a significant component of the

Company’s research and development expenses.

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, the CELC-G-201 Phase 1b/2 and the VIKTORIA-2 Phase 3 clinical trials ramp 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

and financial position.

Net Loss Per Common Share

7 unchanged sentences

of Potentially-Dilutive Shares Excluded from Diluted Weighted-Average Shares Outstanding

Preferred stock on an as-if-converted

to common stock basis

September 30,

Preferred stock on an as-if-converted to common stock basis

Options to purchase common stock

1 unchanged sentence

Restricted common stock

warrant shares of 5,747,787 and zero are included in the computation of basic and diluted net loss per share for the three and six months

ended June 30, 2024, and June 30, 2023, respectively, as the pre-funded warrants are exercisable for nominal consideration.

Antidilutive securities excluded from computation of earnings per share, amount

warrant shares of 5,747,787 are included in the computation of basic and diluted net loss per share for the three and nine months ended

September 30, 2024, as the pre-funded warrants are exercisable for nominal consideration.

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

9 unchanged sentences

for credit losses recorded for these securities.

following tables summarize the Company’s held-to-maturity investment securities at amortized cost as of June 30, 2024 and December

following tables summarize the Company’s held-to-maturity investment securities at amortized cost as of September 30, 2024 and

December 31, 2023:

of Investment

Holding Gains

Holding Losses

September 30, 2024

Treasury Bills

$ 251,455,468

2 unchanged sentences

$ 251,652,388

Holding Gains

Holding Losses

December 31, 2023

Treasury Bills

$ 149,919,974

11 unchanged sentences

Company enters into contracts in the normal course of business to conduct research and development programs internally and through third

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

The Company currently has two

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

Timing of milestone

payments related to the Phase 2 clinical trials are uncertain and the contracts generally provide for termination following a certain

period after notice, therefore the Company believes that non-cancelable obligations under the agreements are not material.

also has a license agreement in place with Pfizer to research, develop, manufacture and commercialize gedatolisib.

In conjunction with

the license agreement, the Company continued a Phase 1b study – B2151009 related to gedatolisib.

These patients subsequently transitioned

to an Expanded Access study – CELC-G-001.

Contracts related to the Phase 1B and the Expanded Access studies are generally based

on time and material.

In addition, contracts related to the Company’s Phase 3 clinical study (VIKTORIA-1) and Phase 1b/2 clinical

study (CELC-G-201) 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 June 30, 2024, the Company had two material non-cancelable contractual commitments with respect to these

arrangements, which totaled approximately $ 1.8 million.

parties that include, among others, arrangements with vendors, consultants, contract manufacturing organizations (“CMOs”)

and contract research organizations (“CROs”).

The Company currently has two Phase 2 clinical trial agreements in place to

evaluate targeted therapies selected with one of our CELsignia tests.

Timing of milestone payments related to the Phase 2 clinical trials

are uncertain and the contracts generally provide for termination following a certain period after notice, therefore the Company believes

that non-cancelable obligations under the agreements are not material.

The Company also has a license agreement in place with Pfizer

to research, develop, manufacture and commercialize gedatolisib.

In conjunction with the license agreement, the Company continued a Phase

1b study – B2151009 related to gedatolisib.

These patients subsequently transitioned to an Expanded Access study – CELC-G-001.

Contracts related to the Phase 1B and the Expanded Access studies are generally based on time and material.

In addition, contracts related

to the Company’s Phase 3 clinical study (VIKTORIA-1) and Phase 1b/2 clinical study (CELC-G-201) 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, 2024, the Company

had two material non-cancelable contractual commitments with respect to these arrangements, which totaled approximately $ 1.6 million.

August 2024, the Company entered into two software license agreements.

These agreements will expire in August 2026.

As of September

30, 2024, the Company had non-cancelable contractual commitments with respect to these arrangements, which totaled approximately $ 0.2 million.

Stockholders’ Equity

9 unchanged sentences

the shares transferred is $ 5.75 per share.

March 15, 2024, one of the Company’s investors exercised 1,739,080 of common stock warrants at an exercise price of $ 8.05 , which

generated approximately $ 14 million in cash.

March 15, 2024, one of the Company’s investors exercised 1,739,080 common stock warrants at an exercise price of $ 8.05 per share,

which generated approximately $ 14.0 million in cash.

The warrants were issued pursuant to the Securities Purchase Agreement dated May

15, 2022, that closed and was funded on December 9, 2022.

Additional common stock warrants of 3,683 from several investors were exercised, which

generated approximately $ 9,000 in cash in the first quarter of 2024.

The 3,683 common stock warrants were net of shares withheld for

exercise price.

common stock warrants of 3,683 from several investors were exercised, which generated approximately $ 9,000 in cash in the first quarter

The 3,683 common stock warrants were net of shares withheld for exercise price.

March 19, 2024, one of the Company’s preferred shareholders elected to convert 43,913 shares of Series A Convertible Preferred

16 unchanged sentences

The 19,390 common stock warrants were net of shares withheld for exercise price.

June 30, 2024, the Company’s authorized capital stock consisted of 65,000,000 shares of common stock, of which 37,014,751 shares

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

317,577 shares were outstanding.

As of June 30, 2024, no dividends have been declared on the Company’s capital stock.

stock warrants of 65,204 from several investors were exercised, which generated approximately $ 554,000 in cash in the third quarter of

The 65,204 common stock warrants were net of shares withheld for exercise price.

September 30, 2024, the Company’s authorized capital stock consisted of 65,000,000 shares of common stock, of which 37,116,267

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

of which 317,577 shares were outstanding.

As of September 30, 2024, no dividends have been declared on the Company’s capital stock.

and Issuance of Stock

April 22, 2024, pursuant to an Open Market Sale Agreement SM with Jefferies LLC, as agent, the Company sold 285,714

shares of Common Stock

in a single transaction at a price of $ 17.50

per share, generating

gross proceeds of $ 5.0

April 22, 2024, pursuant to an Open Market Sale Agreement SM with Jefferies LLC, as agent, the Company sold 285,714 shares

of common stock in a single transaction at a price of $ 17.50 per share, generating gross proceeds of $ 5.0 million.

May 8, 2024, pursuant to an Open Market Sale Agreement with Jefferies LLC, as agent, the Company sold 149,700 shares of common stock

in a single transaction at a price of $ 17.65 per share, generating gross proceeds of $ 2.6 million.

and other offering expenses related to the Open Market Sale Agreement transactions were $ 0.3 million.

and other offering expenses related to the Open Market Sale Agreement transactions in April and May 2024 were $ 0.3 million.

May 30, 2024, the Company entered into an underwriting agreement with Leerink Partners LLC, TD Securities (USA) LLC and Stifel, Nicolaus

8 unchanged sentences

Stock-Based Compensation

following table summarizes the activity for all stock options outstanding for the six months ended June 30:

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

of Stock Options Activity

1 unchanged sentence

Exercise Price

Options outstanding at beginning

Balance at June 30

Options exercisable

Weighted Average Grant Date Fair Value for

options granted during the period:

following table summarizes additional information about stock options outstanding and exercisable at June 30, 2024:

Options outstanding at beginning of year

Balance at September 30

Options exercisable at September 30:

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, 2024:

of Stock Options Outstanding and Exercisable

Options Outstanding

Options Exercisable

Exercise Price

Company recognized stock-based compensation expense for stock options of $ 1,329,807 and $ 1,228,284 for the three months ended June 30,

2024 and 2023, respectively and $ 2,619,999 and $ 2,450,612 for the six months ended June 30, 2024 and 2023, respectively.

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 $ 26,692 and $ 37,690 for the three months ending June

30, 2024 and 2023, respectively and $ 53,411 and $ 77,302 for the six months ending June 30, 2024 and 2023, respectively.

The effect of

this modification on stock-based compensation over the remaining service period will be approximately $ 110,000 .

In December 2021, the

Company modified the exercise price on 311,000 stock option awards to $ 13.44 , the closing market price on the Nasdaq Capital Market on

December 15, 2021.

No director or officer awards were modified.

The effect of this modification on stock-based compensation was $ 15,763

and $ 16,920 for the three months ended June 30, 2024 and 2023, respectively and $ 31,527 and $ 33,844 for the six months ending June 30,

2024 and 2023, respectively.

Company recognized stock-based compensation expense for stock options of $ 1,843,424 and $ 1,065,567 for the three months ended September

30, 2024 and 2023, respectively and $ 4,463,423 and $ 3,516,180 for the nine months ended September 30, 2024 and 2023, 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 $ 26,652 and $ 30,188 for the three months ended

September 30, 2024 and 2023, respectively, and $ 80,063 and $ 107,490 for the nine months ended September 30, 2024 and 2023, respectively.

The effect of this modification on stock-based compensation over the remaining service period will be approximately $ 83,000 .

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.

2021, the Company modified the exercise price on 311,000 stock option awards to $ 13.44 , the closing market price on the Nasdaq Capital

Market on December 15, 2021.

No director or officer awards were modified.

The effect of this modification on stock-based compensation

was $ 0 and $ 6,826 for the three months ended June 30, 2024 and 2023, respectively and $ 696 and $ 13,934 for the six months ending June

30, 2024 and 2023, respectively.

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

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

for the six months ended June 30:

was $ 15,773 and $ 15,773 for the three months ended September 30, 2024 and 2023, respectively and $ 47,300 and $ 49,617 for the nine months

ended September 30, 2024 and 2023, respectively.

The effect of this modification on stock-based compensation over the remaining service

period will be approximately $ 51,000 .

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 $ 0 and $ 3,041 for the three months ended September 30, 2024 and 2023, respectively and $ 696 and $ 16,975

for the nine months ended September 30, 2024 and 2023, respectively.

The effect of this modification on stock-based compensation over

the remaining service period will be $ 0 .

Black-Scholes option-pricing model was used to estimate the fair value of equity-based awards and the Monte Carlo simulation model was

used to estimate the fair value of the performance-based awards, with the following weighted-average assumptions for the nine months

ended September 30:

of Assumptions for Fair Value of Equity-based Awards

Risk-free interest rate

3.48 % - 4.71 %

3.41 % - 4.61 %

Expected volatility

71.2 to 76.10 %

78.0 to 79.8 %

Expected life (years)

dividend yield

inputs for the Black-Scholes valuation model require management’s significant assumptions.

Prior to the Company’s initial

public offering, the price per share of common stock was determined by the Company’s board based on recent prices of common stock

sold in private offerings.

Subsequent to the initial public offering, the price per share of common stock is determined by using the

closing market price on the Nasdaq Capital Market on the grant date.

The risk-free interest rates are based on the rate for U.S.

securities at the date of grant with maturity dates approximately equal to the expected life at the grant date.

The expected life is

based on the simplified method in accordance with the SEC Staff Accounting Bulletin Nos.

The expected volatility is estimated

based on historical volatility information of peer companies that are publicly available in combination with the Company’s calculated

volatility since being publicly traded.

5.25 to 10.00

Expected dividend yield

inputs for the Black-Scholes valuation model and the Monte Carlo simulation model require management’s significant assumptions.

Prior to the Company’s initial public offering, the price per share of common stock was determined by the Company’s board

based on recent prices of common stock sold in private offerings.

Subsequent to the initial public offering, the price per share of common

stock is determined by using the closing market price on the Nasdaq Capital Market on the grant date.

The risk-free interest rates are

based on the rate for U.S.

Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the

The expected life is based on the simplified method for the time-based awards and the life of the option for the performance-based

awards, in accordance with the SEC Staff Accounting Bulletin Nos.

The expected volatility is estimated based on historical

volatility information of peer companies that are publicly available in combination with the Company’s calculated volatility since

being publicly traded for the time-based awards.

For the performance-based awards, the Company’s full historical volatility was

used to value the options.

assumptions used to calculate the grant date fair value of non-employee options are generally consistent with the assumptions used for

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with the agreements would also be cancelled.

stock awards were granted to members of the Company’s board during the three months ended June 30, 2024 and 2023.

The Company had

1,079 and 1,958 shares of restricted stock outstanding as of June 30, 2024 and 2023, respectively, and 1,958 and 3,273 shares of restricted

stock vested during the three months ended June 30, 2024 and 2023.

The Company recognized stock-based compensation expense for restricted

stock of $ 8,475 and $ 4,052 for the three months ended June 30, 2024 and 2023, respectively and $ 13,325 and $ 8,694 for the six months

ended June 30, 2024 and 2023, respectively.

Company had 1,079 and 1,958 shares of restricted stock outstanding as of September 30, 2024 and 2023, respectively, and no shares of

restricted stock vested during the three months ended September 30, 2024 and 2023.

The Company recognized stock-based compensation expense

for restricted stock of $ 4,448 and $ 4,903 for the three months ended September 30, 2024 and 2023, respectively and $ 17,773 and $ 13,597

for the nine months ended September 30, 2024 and 2023, respectively.

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

5 unchanged sentences

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

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.

At the Annual Meeting held on May 11, 2023

and May 9, 2024, the stockholders approved a one-time, 1,500,000 increase each year for a total of 3,000,000 increase, to the number

of shares reserved for issuance under the 2017 Plan.

the Annual Meetings held on May 12, 2021 and May 12, 2022, the stockholders approved one-time, 500,000 increases each year for a total

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

At the Annual Meetings held on May 11, 2023

and May 9, 2024, the stockholders approved one-time, 1,500,000 increases each year for a total increase of 3,000,000 , to the number of

shares reserved for issuance under the 2017 Plan.

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

as of June 30, 2024 was 2,267,956 .

unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized at June 30, 2024:

as of September 30, 2024 was 1,286,511 .

unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized at September 30, 2024:

of Unrecognized Compensation Cost

estimated compensation cost to be recognized

Total estimated compensation cost to be recognized

Company recognized stock-based compensation expense related to its employee stock purchase plan of $ 83,329 and $ 38,167 for the three

months ended June 30, 2024 and 2023, respectively and $ 108,534 and $ 90,958 for the six months ended June 30, 2024 and 2023, respectively.

months ended September 30, 2024 and 2023, respectively and $ 191,863 and $ 129,125 for the nine months ended September 30, 2024 and 2023,

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 , 108,337 , and 127,530 shares on January 1, 2021, 2022, 2023, and 2024, 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

June 30, 2024 was 373,739 .

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

of shares reserved for issuance was automatically increased by 51,499 , 74,594 , 108,337 , and 127,530 shares on January 1, 2021, 2022,

2023, and 2024, 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, 2024 was 373,739 .

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

of Stock-based Compensation Expenses

Stock-based compensation expense in operating

and administrative

Three Months Ended

Nine Months Ended

Stock-based compensation expense in operating expenses:

Research and development

General and administrative

May 30, 2024, the Company entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”)

28 unchanged sentences

to liquidity and other financial measures.

Innovatus has the right, at its election and until August 9, 2025, to convert

up to 20 % of the outstanding principal of the Term A Loan into shares of the Company’s common stock at a price per share of $ 10.00

(the “Conversion Right”).

Innovatus will continue to have the right to exercise a previously disclosed warrant granted to

it under the Prior Loan Agreement to purchase 26,042 shares of common stock at a price per share of $ 14.40 through April 8, 2031.

A&R Loan Agreement contains a Final Fee, which is equal to 4.5 %

of the initial funding of the agreement and is due on the

earliest to occur of (a) the Maturity Date, (b) the acceleration of any Term Loan, and (c) the prepayment of the Term Loans.

is also a contingent non-utilization fee for both the Term D and Term E loans.

If the Company achieves the Term D Milestone and (i)

fails to draw the full amount of the Term D Loan during the Term D Draw Period and (ii) fails to notify Collateral Agent, at any

time before the date that is four weeks after the Company’s achievement of the Term D Milestone, of the Company’s intent

not to draw the full amount of the Term D Loan, a non-utilization fee of $ 900,000 ,

with respect to the Term D Loan shall become due and payable on the earliest of (i) the termination of the Term D Draw Period, (ii)

the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans.

If the Company

achieves the Term E Milestone and (i) fails to draw the full amount of the Term E Loan during the Term E Draw Period and (ii) fails

to notify Collateral Agent, at any time before the date that is four weeks after the Company’s achievement of the Term E

Milestone, of the Company’s intent not to draw the full amount of the Term E Loan, a non-utilization fee of $ 1,500,000 ,

with respect to the Term E Loan shall become due and payable on the earliest of (i) the termination of the Term E Draw Period, (ii)

the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans.

After the 18-month

anniversary of the Effective Date, the Company shall have the option to prepay all, but not less than all, of the Term Loans

advanced by the Lenders under the A&R Loan Agreement, provided the Company (i) provides written notice to Collateral Agent of

its election to prepay the Term Loans at least seven Business Days prior to such prepayment, and (ii) pays to Lenders on the date of

such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all

outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Fee, (C)

the Prepayment Fee, plus (D) all other outstanding Obligations that are due and payable, including, without limitation,

Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts.

At May 30, 2024, the Company

recognized the Final Fee of $ 4.5

million as additional debt principal and a corresponding debt discount to be amortized over the life of the loan.

Innovatus has the right, at its election and until August 9, 2025, to convert up to 20 % of

the outstanding principal of the Term A Loan into shares of the Company’s common stock at a price per share of $ 10.00 (the “Conversion

Innovatus will continue to have the right to exercise a previously disclosed warrant granted to it under the Prior Loan

Agreement to purchase 26,042 shares of common stock at a price per share of $ 14.40 through April 8, 2031.

A&R Loan Agreement contains a Final Fee, which is equal to 4.5 % of the initial funding of the agreement and is due on the earliest

to occur of (a) the Maturity Date, (b) the acceleration of any Term Loan, and (c) the prepayment of the Term Loans.

There is also a contingent

non-utilization fee for both the Term D and Term E loans.

If the Company achieves the Term D Milestone and (i) fails to draw the full

amount of the Term D Loan during the Term D Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is

four weeks after the Company’s achievement of the Term D Milestone, of the Company’s intent not to draw the full amount of

the Term D Loan, a non-utilization fee of $ 900,000 , with respect to the Term D Loan shall become due and payable on the earliest of (i)

the termination of the Term D Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in

whole of the Term Loans.

If the Company achieves the Term E Milestone and (i) fails to draw the full amount of the Term E Loan during

the Term E Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is four weeks after the Company’s

achievement of the Term E Milestone, of the Company’s intent not to draw the full amount of the Term E Loan, a non-utilization

fee of $ 1,500,000 , with respect to the Term E Loan shall become due and payable on the earliest of (i) the termination of the Term E

Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans.

the 18-month anniversary of the Effective Date, the Company shall have the option to prepay all, but not less than all, of the Term Loans

advanced by the Lenders under the A&R Loan Agreement, provided the Company (i) provides written notice to Collateral Agent of its

election to prepay the Term Loans at least seven Business Days prior to such prepayment, and (ii) pays to Lenders on the date of such

prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding

principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Fee, (C) the Prepayment

Fee, plus (D) all other outstanding Obligations that are due and payable, including, without limitation, Lenders’ Expenses and

interest at the Default Rate with respect to any past due amounts.

At May 30, 2024, the Company recognized the Final Fee of $ 4.5 million

as additional debt principal and a corresponding debt discount to be amortized over the life of the loan.

connection with the funding of each of the Term C Loan, the Term D Loan, the Term E Loan and the Term F Loan, the Company agreed to issue

18 unchanged sentences

modification of the debt and not an extinguishment of the debt.

debt consisted of the following at June 30, 2024 and December 31, 2023:

debt consisted of the following at September 30, 2024 and December 31, 2023:

of Long-term Debt

September 30,

$ 100,000,000

PIK interest (added

to principal)

unamortized debt

issuance costs

PIK interest (added to principal)

unamortized debt issuance costs

( 1,856,880 )

unamortized debt

unamortized debt discount

( 6,059,370 )

2 unchanged sentences

of Long Term Debt Future Principal Payments

Ending December 31,

$ 104,840,164

Subsequent Event

October 7, 2024, the Company held a Special Meeting of Stockholders at which the Company’s stockholders approved an amendment to

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

65,000,000 to 95,000,000 (the “Authorized Share Increase”).

The Authorized Share Increase had previously been approved, subject

to stockholder approval, by the Company’s Board of Directors.

On October 7, 2024, the Company filed a certificate of amendment

to the Certificate of Incorporation with the Delaware Secretary of State to effect the Authorized Share Increase, which became effective

immediately upon its filing.

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