What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-09 · 87 added, 70 removed, 446 unchanged (26% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

June 30, 2022

September 30, 2022

December 31, 2021

21 unchanged sentences

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized;

no shares issued and outstanding at June 30, 2022 and December 31, 2021

no shares issued and outstanding at September 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value, 250,000,000 shares authorized;

22,597,907 and 22,230,032 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

23,969,497 and 22,230,032 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

8 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating Expenses:

10 unchanged sentences

Total other income, net

Loss before income tax

Income tax benefit

Net (loss) income

Cumulative preferred stock dividends

Net loss attributable to common stockholders

Unrealized gain (loss) on foreign currency translation

Total comprehensive (loss) income

Unrealized loss on foreign currency translation

Total comprehensive loss

Net loss per share attributable to common stockholders, basic and diluted

16 unchanged sentences

Balances as of June 30, 2022

Exercise of stock options

Equity-based compensation

Other comprehensive loss

Balances as of September 30, 2022

Preferred Stock

15 unchanged sentences

Balances as of June 30, 2021

Exercise of stock options

Exercise of common stock warrants

Equity-based compensation

Other comprehensive loss

Balances as of September 30, 2021

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

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

24 unchanged sentences

Deferred offering costs

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

4 unchanged sentences

Supplemental disclosures of non-cash financing activities:

Remeasurement of right-of-use asset and operating lease liability

Issuance of Series B-1 Convertible Preferred Stock upon conversion of debt

21 unchanged sentences

The representative’s exercise of the over-allotment option closed on November 12, 2021, resulting in gross proceeds of $ 6,783 and net proceeds to the Company of approximately $ 6,308 , after deducting underwriting discounts and commissions and other offering related expenses.

The Company held cash and cash equivalents of $ 45,771 at June 30, 2022.

The Company held cash and cash equivalents of $ 46,610 at September 30, 2022.

The Company expects that its cash and cash equivalents, including the net proceeds from its IPO, will enable it to fund its operating expenses and capital expenditure requirements through at least the one year period subsequent to the filing date of this Quarterly Report on Form 10-Q.

3 unchanged sentences

Basis of Presentation

The accompanying consolidated financial statements as of June 30, 2022, and for the three and six months ended June 30, 2022 and 2021, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States of America (“U.S.

The accompanying consolidated financial statements as of September 30, 2022, and for the three and nine months ended September 30, 2022 and 2021, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States of America (“U.S.

GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X.

1 unchanged sentence

GAAP for complete financial statements.

In the opinion of

the Company’s management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of June 30, 2022, the statements of operations and comprehensive loss and convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021.

opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of September 30, 2022, the statements of operations and comprehensive loss and convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021.

Such adjustments are of a normal and recurring nature.

The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period.

The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period.

These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2021, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 30, 2022.

7 unchanged sentences

Grant Receivables

Grant receivables relate to outstanding amounts due for reimbursable expenditures of awarded grants issued by the National Institute of Health (“NIH”) and are carried at their estimated collectible amounts.

Grant receivables relate to outstanding amounts due for reimbursable expenditures of awarded grants issued by the National Institute of Aging, a division of the National Institute of Health (“NIH”) and are carried at their estimated collectible amounts.

The Company expects all receivables to be collectible, and accordingly, there is no allowance for doubtful accounts required on these grant receivables.

6 unchanged sentences

If expected cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the assets.

There were no indicators of impairment of long-lived assets during the three or six months ended June 30, 2022 or 2021.

There were no indicators of impairment of long-lived assets during the three or nine months ended September 30, 2022 or 2021.

Convertible Instruments

7 unchanged sentences

Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date.

For the three and six months ended June 30, 2022, the Company generated grant income of $ 6,385 and $ 12,289 , respectively, primarily from reimbursements from the National Institute of Aging (“NIA”), a division of the NIH, for aging research.

For the three and six months ended June 30, 2021, the Company generated grant income of $ 4,646 and $ 9,338 , respectively, from reimbursements from the NIA.

For the three and nine months ended September 30, 2022, the Company generated grant income of $ 5,947 and $ 18,236 , respectively, primarily from reimbursements from the National Institute of Aging (“NIA”), a division of the NIH, for aging research.

For the three and nine months ended September 30, 2021, the Company generated grant income of $ 3,037 and $ 12,375 , respectively, from reimbursements from the NIA.

The Company records grant income in other income (expense) in the period in which the reimbursable research and development services are incurred and the right to payment is realized.

3 unchanged sentences

Deferred grant income represents grant proceeds received by the Company prior to the period in which the reimbursable research and development services are incurred.

As of June 30, 2022, the Company has been awarded grants with project periods that extend through May 31, 2025, subject to extension.

As of September 30, 2022, the Company has been awarded grants with project periods that extend through May 31, 2025, subject to extension.

Research and Development Costs

The Company is involved in research and development aimed at the development of treatments for a variety of diseases related to the central nervous system, with a primary focus on Alzheimer’s Disease, Dementia with Lewy Bodies and dAMD studies.

The Company is involved in research and development aimed at the development of treatments for a variety of diseases related to the central nervous system, with a primary focus on Alzheimer’s disease, dementia with Lewy Bodies and dry AMD studies.

Research and development costs are expensed as incurred.

14 unchanged sentences

The Company’s lease agreements do not provide an implicit rate.

As a result, the Company utilizes an estimated incremental borrowing rate, or IBR, to discount lease payments, which is based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term.

As a result, the Company utilizes an estimated incremental borrowing rate to discount lease payments, which is based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term.

Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or lease incentives received.

98 unchanged sentences

In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate, apply that rate in providing for income taxes on a current year-to-date (interim period) basis, and include the tax impact for discrete items within the interim period.

The Company maintains a full valuation allowance against all deferred tax assets as of June 30, 2022 and December 31, 2021, as management has determined that it is not more likely than not that the Company will realize these future tax benefits.

As of June 30, 2022 and December 31, 2021, the Company had no uncertain tax positions.

The Company maintains a full valuation allowance against all deferred tax assets as of September 30, 2022 and December 31, 2021, as management has determined that it is not more likely than not that the Company will realize these future tax benefits.

As of September 30, 2022 and December 31, 2021, the Company had no uncertain tax positions.

Financial Instruments and Fair Value Measurements

Financial assets and liabilities measured at fair value are summarized below:

As of June 30, 2022

As of September 30, 2022

Quoted Priced in

9 unchanged sentences

Money market funds

The following table sets forth a summary of the changes in fair value of the Level 3 liabilities for the six months ended June 30, 2021:

Six Months Ended June 30, 2021

The following table sets forth a summary of the changes in fair value of the Level 3 liabilities for the nine months ended September 30, 2021:

Nine Months Ended September 30, 2021

Balance at December 31, 2020

2 unchanged sentences

Change in the fair value of SAFE

Balance at June 30, 2021

Balance at September 30, 2021

Derivative Liability — The Company recognizes derivative liabilities as a result of the issuance of the convertible notes that contain conversion and redemption features that are required to be bifurcated.

13 unchanged sentences

Management determined the fair value of the SAFEs using the following significant unobservable inputs:

September 30,

Expected term (in years)

5 unchanged sentences

Probability of change of control occurrence

The change in fair value of the SAFEs for the three and six months ended June 30, 2021 was $ 1,044 and $ 1,044 , respectively.

The change in fair value of the SAFEs for the three and nine months ended September 30, 2021 was $ 932 and $ 1,976 , respectively.

In addition, the Company recorded the Series B-1 convertible preferred stock within mezzanine equity at fair value on the date of issuance, May 1, 2021.

2 unchanged sentences

Accrued expense consists of the following as of:

September 30,

Employee compensation, benefits, and related accruals

Research and development costs

Professional fees

Legal reserves and professional fees

Other accrued

3 unchanged sentences

Payments of approximately $ 134 are due monthly from October 2021 through September 2022.

As of June 30, 2022 and December 31, 2021, the outstanding principal of the loan was $ 401 and $ 1,191 , respectively, and is included in other current liabilities on the consolidated balance sheet.

As of September 30, 2022 and December 31, 2021, the outstanding principal of the loan was $ 0 and $ 1,191 , respectively, and is included in other current liabilities on the consolidated balance sheet.

Commitments and Contingencies

Operating Leases

The Company’s corporate headquarters is located in Purchase, New York where we currently occupy 2,864 square feet of office space under a lease that expires in May, 2029.

The Company’s corporate headquarters is located in Purchase, New York where it currently occupies 2,864 square feet of office space under a lease that expires in May, 2029.

The Company also leases approximately 6,068 square feet of laboratory and office space located in Pittsburgh, Pennsylvania under leases that expire in June, 2026.

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of June 30, 2022 were as follows, in thousands:

As of June 30,

On August 31, 2022, the Company entered into a lease agreement for approximately 2,980 square feet of office space located in Pittsburgh, Pennsylvania.

The lease has a term of 45 months and commenced on October 1, 2022.

Additionally, on August 31, 2022, the Company and Landlord modified one of its existing lease agreements for approximately 3,706 square feet of lab space at the same location to extend the lease term termination date from June 30, 2023 until June 30, 2026.

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of September 30, 2022 were as follows, in thousands:

As of September 30,

Operating lease assets

3 unchanged sentences

Total operating lease liabilities

The following table summarizes operating lease costs for the three and six months ended June 30, 2022:

The following table summarizes operating lease costs for the three and nine months ended September 30, 2022:

Three Months Ended

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Operating lease costs

1 unchanged sentence

Total lease costs

Rent expense for the three and six months ended June 30, 2021 was $ 48 and $ 82 , respectively.

The maturities of the operating lease liabilities and minimum lease payments as of June 30, 2022 were as follows:

Rent expense for the three and nine months ended September 30, 2021 was $ 34 and $ 116 , respectively.

The maturities of the operating lease liabilities and minimum lease payments as of September 30, 2022 were as follows:

For the Years Ended December 31,

4 unchanged sentences

Present value of operating lease liabilities

The following table summarizes the lease term and discount rate as of June 30, 2022:

As of June 30,

The following table summarizes the lease term and discount rate as of September 30, 2022:

As of September 30,

Weighted-average remaining lease term (years)

2 unchanged sentences

Operating leases

The following table summarizes cash paid for amounts included in the measurement of the Company’s operating lease liabilities for the three and six months ended June 30, 2022:

Six Months Ended June 30, 2022

The following table summarizes cash paid for amounts included in the measurement of the Company’s operating lease liabilities for the three and nine months ended September 30, 2022:

Nine Months Ended September 30, 2022

(in thousands)

4 unchanged sentences

When a material loss contingency is only reasonably possible, the Company does not record a liability but instead discloses the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made.

As of June 30, 2022 and December 31, 2021, there was no litigation or contingency with at least a reasonable possibility of a material loss.

As of September 30, 2022 and December 31, 2021, there was no litigation or contingency with at least a reasonable possibility of a material loss.

Equity-based Compensation

2021 Equity Incentive Plan

On October 7, 2021, the date upon which the Registration Statement on Form S-1 in connection with the IPO was declared effective, the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) became effective.

On October 7, 2021, the date upon which the Company’s Registration Statement on Form S-1 in connection with the IPO was declared effective, the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) became effective.

On the same date, the Company ceased granting awards under its 2017 Equity Incentive Plan (the “2017 Plan”).

The 2021 Plan authorizes the award of both equity-based and cash-based incentive awards, including:

(i) stock options (both incentive stock options and nonqualified stock options), (ii) stock appreciation rights, (iii) restricted stock awards, (iv) restricted stock units, or

RSUs, and (v) cash or other stock-based awards.

(i) stock options (both incentive stock options and nonqualified stock options), (ii) stock appreciation rights, (iii) restricted stock awards, (iv) restricted stock units, or RSUs, and (v) cash or other stock-based awards.

Incentive stock options may be granted only to employees.

All other types of awards may be issued to employees, directors, consultants, and other service providers.

As of June 30, 2022, the aggregate number of shares of common stock of the Company that may be issued under the Plan is 3,480,014 .

As of September 30, 2022, the aggregate number of shares of common stock of the Company that may be issued under the Plan is 2,529,995 .

The number of shares reserved for issuance under the 2021 Plan increased automatically on January 1, 2022 pursuant to an evergreen provision therein by 1,111,502 shares, representing 5 % of total common shares outstanding at December 31, 2021.

The aggregate number of shares will increase each anniversary of such date prior to the termination of the 2021 Plan, equal to the lesser of (i) 5 % of our shares of common stock issued and outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Company’s board of directors or the compensation committee.

The aggregate number of shares will increase each anniversary of such date prior to the termination of the 2021 Plan, equal to the lesser of (i) 5 % of the Company’s shares of common stock issued and outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Company’s board of directors or the compensation committee.

No more than 7,543,185 shares of common stock may be issued under the 2021 Plan through incentive stock options.

3 unchanged sentences

On September 15, 2017, the Company’s board of directors approved the 2017 Plan, which provides for the granting of incentive stock options, non-qualified stock options and stock awards to employees, certain consultants and directors.

The Board, or its designated committee, has the sole authority to select the individuals to whom awards are granted and determine the terms of each award, including the number of shares and the schedule upon which the award becomes exercisable.

The board of directors, or its designated committee, has the sole authority to select the individuals to whom awards are granted and determine the terms of each award, including the number of shares and the schedule upon which the award becomes exercisable.

Upon the effectiveness of the 2021 Plan, no further awards will be granted under the 2017 Plan.

4 unchanged sentences

Under the ESPP, the Company may provide employees and employees of the Subsidiary with an opportunity to purchase shares of the Company’s common stock at a discounted purchase price.

As of June 30, 2022, subject to adjustment as provided in the ESPP, a total of 209,532 shares of common stock are authorized and reserved for issuance under the ESPP.

Subject to prior approval by the board of directors in each instance, on or about January 1, 2022 and each anniversary of such date thereafter prior to the termination of the ESPP, the number of shares of common stock authorized and reserved for issuance under the ESPP will be increased by a number of shares of common stock equal to the least of (i) 1,000,000 shares of the Company’s common stock, (ii) 1 % of the shares of common stock outstanding on the final day of the immediately preceding calendar year, and (iii) such smaller number of shares of common stock as determined by the Company’s board of directors.

As of September 30, 2022, subject to adjustment as provided in the ESPP, a total of 209,532 shares of common stock are authorized and reserved for issuance under the ESPP.

determined by the Company’s board of directors.

Such shares of common stock may be newly issued shares, treasury shares or shares acquired on the open market.

2 unchanged sentences

The fair value of options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Six Months Ended June 30,

Nine Months Ended September 30,

Fair value of common stock

27 unchanged sentences

Options exercised

( 1,739,465 )

Options forfeited

Options expired

Balance, June 30, 2022

Exercisable as of June 30, 2022

Vested and expected to vest as of June 30, 2022

The weighted-average grant date fair value of stock options granted was $ 2.00 and $ 2.52 during the three and six months ended June 30, 2022, respectively.

The weighted-average grant date fair value of stock options granted was $ 1.19 and $ 1.39 during the three and six months ended June 30, 2021, respectively.

There were 214,125 and 426,575 stock options granted at an aggregate fair value of $ 429 and $ 1,077 for the three and six months ended June 30, 2022, respectively.

There were 11,593 and 67,232 stock options granted at an aggregate fair value of $ 14 and $ 91 for the three and six months ended June 30, 2021, respectively.

During the three and six months ended June 30, 2022 there were 19,321 and 367,875 stock options exercised, respectively, with an aggregate grant date fair value of $ 22 and $ 327 , respectively.

During the three and six months ended June 30, 2021 there were 0 and 20,787 stock options exercised, respectively, with an aggregate grant date fair value of $ 0 and $ 11 , respectively.

The intrinsic value of stock options exercised during the three and six months ended June 30, 2022 was $ 36 and $ 1,121 , respectively, and was $ 0 and $ 114 for the three and six months ended June 30, 2021, respectively.

Balance, September 30, 2022

Exercisable as of September 30, 2022

The weighted-average grant date fair value of stock options granted was $ 1.47 and $ 1.90 during the three and nine months ended September 30, 2022, respectively.

The weighted-average grant date fair value of stock options granted was $ 1.79 during the nine months ended September 30, 2021.

There were 14,000 and 449,270 stock options granted at an aggregate fair value of $ 21 and $ 838 for the three and nine months ended September 30, 2022, respectively.

There were no stock options granted during the three months ended September 30, 2021, and 67,232 stock options granted at an aggregate fair value of $ 121 for the nine months ended September 30, 2021.

During the three and nine months ended September 30, 2022 there were 1,371,589 and 1,739,465 stock options exercised, respectively, with an aggregate grant date fair value of $ 1,018 and $ 1,308 , respectively.

During the three and nine months ended September 30, 2021 there were 4,996 and 25,783 stock options exercised, respectively, with an aggregate grant date fair value of $ 3 and $ 14 , respectively.

The intrinsic value of stock options exercised during the three and nine months ended September 30, 2022 was $ 1,596 and $ 2,717 , respectively, and was $ 26 and $ 140 for the three and nine months ended September 30, 2021, respectively.

The Company recorded total equity-based compensation expense in the statement of operations and comprehensive loss related to stock options as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

1 unchanged sentence

Total equity-based compensation

As of June 30, 2022, total future compensation expense related to unvested awards yet to be recognized by the Company was $ 9,025 , which is expected to be recognized over a weighted-average remaining vesting period of approximately 2.5 years.

As of September 30, 2022, total future compensation expense related to unvested awards yet to be recognized by the Company was $ 7,338 , which is expected to be recognized over a weighted-average remaining vesting period of approximately 2.2 years.

Net Loss per Share

The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods presented due to their antidilutive effect:

September 30,

Options issued and outstanding

1 unchanged sentence

Warrants for common stock

Subsequent Events

On November 10, 2022, the Company entered into an underwriting agreement with respect to a follow-on public offering, pursunt to which the Company agreed to issue and sell 5,000,000 shares of its common stock at a public offering price of $ 1.20 per share.

In connection with the follow-on public offering, the Company is expected to receive net proceeds of approximately $ 5.4 million, after deducting underwriting discounts and commissions and other offering related expenses.

The follow-on public offering is expected to close on November 15, 2022, subject to customary closing conditions.

Additionally, the Company granted the underwriters in the follow-on public offering an option to purchase up to 750,000 additional shares of its common stock at the public offering price, less underwriting discounts and commissions.

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