What changed in this filing

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Item 1. Financial Statements

2023-08-08 compared with 2023-05-04 · 90 added, 74 removed, 324 unchanged (34% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

March 31, 2023

June 30, 2023

December 31, 2022

20 unchanged sentences

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

no shares issued and outstanding at March 31, 2023 and December 31, 2022

no shares issued and outstanding at June 30, 2023 and December 31, 2022

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

29,277,227 and 28,991,548 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

30,286,582 and 28,991,548 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

8 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating Expenses:

4 unchanged sentences

Other income (expense):

Other expense, net

Other income (expense), net

Interest expense

1 unchanged sentence

Loss before income tax

Income tax expense

Net loss attributable to common stockholders

Unrealized gain on foreign currency translation

Income tax benefit

Unrealized (loss) gain on foreign currency translation

Total comprehensive loss

9 unchanged sentences

Balances as of December 31, 2022

Issuance of common stock under the at-the-market sales agreement, net of commissions and allocated fees

Issuance of common stock under the at-the-market (ATM) sales agreement, net of commissions and allocated fees

Issuance of common stock as commitment shares for equity line financing (see Note 7)

2 unchanged sentences

Balances as of March 31, 2023

Issuance of common stock under the at-the-market (ATM) sales agreement, net of commissions and allocated fees

Equity-based compensation

Other comprehensive loss

Balances as of June 30, 2023

Comprehensive

5 unchanged sentences

Balances as of March 31, 2022

Exercise of stock options

Equity-based compensation

Other comprehensive loss

Balances as of June 30, 2022

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

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

15 unchanged sentences

Cash flows from financing activities:

Proceeds from the ATM

Proceeds from issuance of common stock under the ATM sales agreement, net of commissions and allocated fees

Proceeds from the exercise of common stock options

Payments on loan payable

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

11 unchanged sentences

(the “Company”) was incorporated as a Delaware corporation on August 21, 2007.

The Company is a biopharmaceutical company developing disease modifying therapies for central nervous system (“CNS”) disorders.

The Company is a biopharmaceutical company developing disease modifying therapies targeting age-related degenerative diseases and disorders of the central nervous system (“CNS”) and retina.

The Company’s pipeline candidates were discovered using proprietary biology and chemistry platforms designed to identify novel drug targets and disease-modifying therapies that address dysregulated pathways specifically associated with neurodegenerative diseases.

12 unchanged sentences

The Company also simultaneously entered into a sales agreement with Cantor Fitzgerald & Co.

Riley Securities, Inc., or the Sales Agents, providing for the offering, issuance and sale by the Company of up to $ 40,000 of its common stock from time to time in “at-the-market” offerings under the Shelf (the “ATM”).

Riley Securities, Inc.

(the “Sales Agents”) providing for the offering, issuance and sale by the Company of up to $ 40,000 of its common stock from time to time in “at-the-market” offerings under the Shelf (the “ATM”).

During the six months ended June 30, 2023, the Company sold 1,105,178 shares of our common stock pursuant to the ATM for gross proceeds of approximately $ 2,502 .

Please refer to Note 7 for further details.

3 unchanged sentences

333-268992) covering the resale of shares of common stock that may be issued under the Purchase Agreement.

As of March 31, 2023, the Company had not sold any shares of its common stock to Lincoln Park.

As of June 30, 2023, the Company had not sold any shares of its common stock to Lincoln Park.

Please refer to Note 7 for further details.

The Company held cash and cash equivalents of $ 38,810 at March 31, 2023.

The Company held cash and cash equivalents of $ 37,190 at June 30, 2023.

The Company expects that its cash and cash equivalents 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.

However, additional funding will be necessary beyond this point to fund the Company’s future preclinical and clinical activities.

However, additional funding will

be necessary beyond this point to fund the Company’s future preclinical and clinical activities.

The Company expects to finance its future cash needs through a combination of grant awards, equity or debt financings, collaboration agreements, strategic alliances and licensing arrangements.

1 unchanged sentence

Basis of Presentation

The accompanying consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, 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 June 30, 2023, and for the three and six months ended June 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the 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 March 31, 2023, the statements of operations and comprehensive loss and stockholders’ equity for the three months ended March 31, 2023 and 2022.

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, 2023, the statements of operations and comprehensive loss and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022.

Such adjustments are of a normal and recurring nature.

The results for the three months ended March 31, 2023 are not necessarily indicative of the results for the year ending December 31, 2023, or for any future period.

The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023, 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, 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 23, 2023.

12 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.

For the three months ended March 31, 2023 and 2022, the Company generated grant income of $ 3,426 and $ 5,904 , respectively, primarily from reimbursements from the National Institute of Aging, a division of the NIH for aging research.

The current and noncurrent portion of deferred grant income as of March 31, 2023 was $ 1,646 and $ 1,764 , respectively, as compared to the current and noncurrent portion of deferred grant income as of December 31, 2022 of $ 1,702 and $ 1,686 , respectively.

The grants awarded relate to agreed-upon direct and indirect costs for specific studies or clinical trials, which may include personnel and consulting costs, costs paid to contract research organizations (“CROs”), research institutions

and/or consortiums involved in the grant, as well as facilities and administrative costs.

For the three and six months ended June 30, 2023, the Company generated grant income of $ 6,925 and $ 10,351 , respectively, primarily from reimbursements from the National Institute of Aging (the “NIA”), a division of the NIH for aging research.

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 NIA, a division of the NIH for aging research.The

current and noncurrent portion of deferred grant income as of June 30, 2023 was $ 1,056 and $ 1,052 , respectively, as compared to the current and noncurrent portion of deferred grant income as of December 31, 2022 of $ 1,702 and $ 1,686 , respectively.

These grants are cost plus fixed fee arrangements in which the Company is reimbursed for its eligible direct and indirect costs over time, up to the maximum amount of each specific grant award.

3 unchanged sentences

To date, the Company has not been found to have breached the terms of any NIH grant.

As of March 31, 2023, the Company has been awarded grants with project periods that extend through May 31, 2026, subject to extension.

As of June 30, 2023, the Company has been awarded grants with project periods that extend through May 31, 2026, 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.

The Company is involved in research and development of treatments for a variety of diseases related to the central nervous system, with a primary focus on Alzheimer’s disease.

Research and development costs are expensed as incurred.

17 unchanged sentences

Prior to the IPO, due to the absence of an active market for the Company’s common stock, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation , to estimate the fair value of its common stock.

In determining the exercise prices for stock options granted, the Company has considered the

estimated fair value of the common stock as of the measurement date.

In determining the exercise prices for stock options granted, the Company has considered the estimated fair value of the common stock as of the measurement date.

The estimated fair value of the common stock has been determined at each grant date based upon a variety of factors, including the illiquid nature of the common stock, arm’s-length sales of the Company’s capital stock (including convertible preferred stock), the effect of the rights and preferences of the preferred stockholders and the prospects of a liquidity event.

1 unchanged sentence

Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date.

Subsequent to the IPO, the board of directors will determine the fair value of the shares of common stock underlying the stock-based awards based off of the closing price as reported on the Nasdaq Stock Market LLC on the grant date.

Subsequent to the IPO, the board of directors determines the fair value of the shares of common stock underlying the stock-based awards based off of the closing price as reported on the Nasdaq Stock Market LLC on the grant date.

Concentration of Credit Risk

16 unchanged sentences

● Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

Net Loss Per Share Attributable to Common Stockholders

Basic net loss attributable to common shares is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period.

loss attributable to common shares includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss per share by the weighted-average number of shares of common stock outstanding during each period.

Diluted net loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock.

For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.

7 unchanged sentences

Recent Accounting Pronouncements

There have been no new pronouncements issued during the three months ended March 31, 2023, which could be expected to materially impact the Company’s consolidated financial statements.

There have been no new pronouncements issued during the six months ended June 30, 2023, which could be expected to materially impact the Company’s consolidated financial statements.

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 March 31, 2023 and December 31, 2022, as management has determined that it is not more likely than not that the Company will realize these future tax benefits.

As of March 31, 2023 and December 31, 2022, the Company had no uncertain tax positions.

The Company maintains a full valuation allowance against all deferred tax assets as of June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, 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 March 31, 2023

As of June 30, 2023

Quoted Priced in

10 unchanged sentences

Accrued Expenses

Accrued expense consists of the following as of:

March 31, 2023

Accrued expense consists of the following:

June 30, 2023

December 31, 2022

5 unchanged sentences

Under the agreement, the Company financed $ 841 of certain premiums at a 6.85 % annual interest rate.

Payments of approximately $ 72 are due monthly from November 2022 through October 2023.

As of March 31, 2023 and December 31, 2022, the outstanding principal of the loan was $ 427 and $ 634 , respectively, and is included in other current liabilities on the consolidated balance sheet.

Total payments of approximately $ 72 , including interest and principal, are due monthly from November 2022 through October 2023.

As of June 30, 2023 and December 31, 2022, the outstanding principal of the loan was $ 217 and $ 634 , respectively, and is included in other current liabilities on the consolidated balance sheet.

Commitments and Contingencies

Operating Leases

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of March 31, 2023 were as follows, in thousands:

March 31, 2023

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of June 30, 2023 were as follows, in thousands:

June 30, 2023

Operating lease assets

3 unchanged sentences

Total operating lease liabilities

Operating lease costs for the three months ended March 31, 2023 and 2022 was $ 54 and $ 50 , respectively.

The maturities of the operating lease liabilities and minimum lease payments as of March 31, 2023 were as follows:

Operating lease costs for the three and six months ended June 30, 2023 was $ 54 and $ 108 , respectively, as compared to operating lease costs for the three and six months ended June 30, 2022 of $ 49 and $ 99 , respectively.

The maturities of the operating lease liabilities and minimum lease payments as of June 30, 2023 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 March 31, 2023:

March 31, 2023

The following table summarizes the lease term and discount rate as of June 30, 2023:

June 30, 2023

Weighted-average remaining lease term (years)

3 unchanged sentences

The following table summarizes the supplemental cash flow information related to the Company’s operating leases:

Three Months Ended March 31,

Six Months Ended June 30,

(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 March 31, 2023 and December 31, 2022, there was no litigation or contingency with at least a reasonable possibility of a material loss.

As of June 30, 2023 and December 31, 2022, there was no litigation or contingency with at least a reasonable possibility of a material loss.

Stockholders’ Equity

2 unchanged sentences

Common stockholders are entitled to dividends if and when declared by the Company’s board of directors subject to the rights of the preferred stockholders.

As of March 31, 2023, no dividends on common stock had been declared by the Company.

As of June 30, 2023, no dividends on common stock had been declared by the Company.

On December 23, 2022, the Company filed a shelf registration statement on Form S-3 with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants, subscription rights, and/or units of any combination thereof of up to $ 200,000 in aggregate (the “Shelf”).

The Shelf was declared effective on January 3, 2023 by the SEC.

The Company also simultaneously entered into a sales agreement with Cantor Fitzgerald & Co.

Riley Securities, Inc., or the Sales Agents, providing for the offering, issuance and sale by the Company of up to $ 40,000 of its common stock from time to time in ATM offerings under the Shelf.

The Company sold 95,823 shares of common stock pursuant to the ATM during the three months ended March 31, 2023 for gross proceeds of approximately $ 197 .

As of March 31, 2023, there was $ 39,803 remaining of common stock available for sale under the ATM, subject to the limitations of General Instruction I.B.6 of Form S-3.

The Company also simultaneously entered into a sales agreement with the Sales Agents providing for the offering, issuance and sale by the Company of up to $ 40,000 of its common stock from time to time in ATM offerings under the Shelf.

The Company sold 1,105,178 shares of common stock pursuant to the ATM during the six months ended June 30, 2023 for gross proceeds of approximately $ 2,502 .

As of June 30, 2023, there was $ 37,498 remaining of common stock available for sale under the ATM.

Lincoln Park Purchase Agreement

3 unchanged sentences

The Company recorded $ 318 to other expense, net in connection with the issuance of the Commitment Shares.

As of March 31, 2023, the Company had not sold any shares of its common stock to Lincoln Park under the Purchase Agreement.

As of June 30, 2023, the Company had not sold any shares of its common stock to Lincoln Park under the Purchase Agreement.

Equity-based Compensation

3 unchanged sentences

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 (“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 March 31, 2023, the aggregate number of shares of common stock of the Company that may be issued under the Plan is 3,224,254 .

As of June 30, 2023, the aggregate number of shares of common stock of the Company that may be issued under the 2021 Plan is 3,001,359 .

The number of shares reserved for issuance under the 2021 Plan increased automatically on January 1, 2023 pursuant to an evergreen provision therein by 1,449,577 shares, representing 5 % of total common shares outstanding at December 31, 2022.

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.

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.

Shares subject to the 2017 Plan or the 2007 Equity Incentive Plan (the “2007 Plan” and collectively with the 2017 Plan, the “Prior Plans”) that expire, terminate or are cancelled or forfeited for any reason after the effectiveness of the 2021 Plan will be added (or added back) to the shares available for issuance under the 2021 Plan.

Shares subject to the 2021 Plan, the 2017 Plan or the 2007 Equity Incentive Plan (the “2007 Plan” and collectively with the 2017 Plan, the “Prior Plans”) that expire, terminate or are cancelled or forfeited for any reason after the effectiveness of the 2021 Plan will be added (or added back) to the shares available for issuance under the 2021 Plan.

The total number of shares underlying the Prior Plan awards that may be recycled into the 2021 Plan will not exceed 4,334,131 shares.

8 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 March 31, 2023, 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.

As of June 30, 2023, 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 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 board of directors.

3 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:

Three Months Ended March 31,

Six Months Ended June 30,

Fair value of common stock

$ 1.65 – $ 2.99

$ 1.92 – $ 3.05

Expected volatility

91.53 % – 92.68 %

91.09 % – 92.72 %

Risk-free interest rate

3.46 % – 4.21 %

1.87 % – 3.25 %

Dividend yield

20 unchanged sentences

Options expired

Balance, March 31, 2023

Exercisable as of March 31, 2023

The weighted-average grant date fair value of stock options granted was $ 1.62 and $ 2.31 during the three months ended March 31, 2023 and 2022, respectively.

There were 412,720 stock options granted at an aggregate fair value of $ 668 for the three months ended March 31, 2023 and 212,450 stock options granted at an aggregate fair value of $ 491 for the three months ended March 31, 2022.

During the three months ended March 31, 2023 and 2022, there were 0 and 348,552 stock options exercised, respectively, with an aggregate grant date fair value of $ 0 and $ 209 , respectively.

The intrinsic value of stock options exercised during the three months ended March 31, 2023 was $ 0 , and was $ 1,084 for the three months ended March 31, 2022.

Balance, June 30, 2023

Exercisable as of June 30, 2023

The weighted-average grant date fair value of stock options granted was $ 1.57 and $ 1.61 during the three and six months ended June 30, 2023, respectively.

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.

There were 163,549 and 576,269 stock options granted at an aggregate fair value of $ 257 and $ 925 for the three and six months ended June 30, 2023, 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.

During the three and six months ended June 30, 2023, there were no stock options exercised.

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.

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

Restricted Stock Units

The fair values of restricted stock units (“RSUs”) are based on the fair market value of the Company’s common stock on the date of grant.

The fair values of RSUs are based on the fair market value of the Company’s common stock on the date of grant.

Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting.

The RSUs will vest annually over three years on each anniversary of the Grant Date.

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2023:

RSUs for employees vest annually over three years on each anniversary of the Grant Date and RSUs for non-employee directors vest on the one-year anniversary of the Grant Date.

The following table summarizes the Company’s RSU activity for the six months ended June 30, 2023:

Weighted-Average

Outstanding at December 31, 2022

Outstanding at March 31, 2023

Outstanding at June 30, 2023

Equity-based Compensation Expense

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

1 unchanged sentence

Total equity-based compensation

As of March 31, 2023, total future compensation expense related to unvested awards yet to be recognized by the Company was $ 6,944 , which is expected to be recognized over a weighted-average remaining vesting period of approximately 2.0 years.

As of June 30, 2023, total future compensation expense related to unvested awards yet to be recognized by the Company was $ 6,347 , which is expected to be recognized over a weighted-average remaining vesting period of approximately 1.9 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:

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

Options issued and outstanding

1 unchanged sentence

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