Cellectar Biosciences, Inc. 10-Q

Item 1. Financial Statements CELLECTAR BIOSCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ ​ ​ 2021 ​ December 31, ​ (Unaudited) 2020 ASSETS ​ ​ CURRENT ASSETS: ​ ​ Cash and cash equivalents ​ $ 40,344,727 ​ $ 57,165,377 Prepaid expenses and other current assets ​ 1,048,082 ​ ​ 774,432 Total current assets ​ 41,392,809 ​ ​ 57,939,809 Fixed assets, net ​ 254,041 ​ ​ 355,982 Right-of-use asset, net ​ 225,205 ​ ​ 282,365 Long-term assets ​ 75,000 ​ ​ 75,000 Other assets ​ 6,214 ​ ​ 6,214 TOTAL ASSETS ​ $ 41,953,269 ​ $ 58,659,370 ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ $ 3,034,489 ​ $ 3,443,197 Lease liability ​ 131,406 ​ ​ 119,904 Total current liabilities ​ 3,165,895 ​ ​ 3,563,101 Long-term lease liability ​ 201,970 ​ ​ 301,740 TOTAL LIABILITIES ​ 3,367,865 ​ ​ 3,864,841 COMMITMENTS AND CONTINGENCIES (Note 7) ​ ​ STOCKHOLDERS’ EQUITY: ​ ​ Preferred stock, $ 0.00001 par value; 7,000 shares authorized; Series C preferred stock: 0 and 215 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively ​ ​ — ​ ​ 1,148,204 Series D preferred stock: 111 and 1,519 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively ​ ​ 1,382,023 ​ ​ 18,887,645 Common stock, $ 0.00001 par value; 160,000,000 and 80,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 61,101,264 and 45,442,729 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively ​ 611 ​ ​ 454 Additional paid-in capital ​ 182,182,461 ​ ​ 161,533,653 Accumulated deficit ​ ( 144,979,691 ) ​ ​ ( 126,775,427 ) Total stockholders’ equity ​ 38,585,404 ​ ​ 54,794,529 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY ​ $ 41,953,269 ​ $ 58,659,370 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents CELLECTAR BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ COSTS AND EXPENSES: ​ ​ ​ ​ ​ Research and development ​ $ 3,937,464 ​ $ 2,683,944 ​ $ 13,198,294 ​ $ 7,765,673 General and administrative ​ 1,882,190 ​ 1,225,993 ​ 5,009,581 ​ 3,725,153 Total costs and expenses ​ 5,819,654 ​ 3,909,937 ​ 18,207,875 ​ 11,490,826 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LOSS FROM OPERATIONS ​ ( 5,819,654 ) ​ ( 3,909,937 ) ​ ( 18,207,875 ) ​ ( 11,490,826 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER INCOME: ​ ​ ​ ​ ​ ​ ​ ​ Interest income, net ​ 590 ​ 374 ​ 3,611 ​ 11,730 Total other income ​ 590 ​ 374 ​ 3,611 ​ 11,730 NET LOSS ​ $ ( 5,819,064 ) ​ $ ( 3,909,563 ) ​ $ ( 18,204,264 ) ​ $ ( 11,479,096 ) BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE ​ $ ( 0.10 ) ​ $ ( 0.15 ) ​ $ ( 0.34 ) ​ $ ( 0.69 ) SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE ​ 59,868,374 ​ 26,326,782 ​ 53,633,421 ​ 16,539,183 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ 6 Table of Contents CELLECTAR BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Additional ​ Accumulated ​ Stockholders’ ​ Shares Amount Shares Par Amount Paid ‑ In Capital Deficit Equity BALANCE AT DECEMBER 31, 2019 215 ​ $ 1,148,204 ​ 9,386,689 ​ $ 94 ​ $ 119,592,366 ​ $ ( 111,681,255 ) ​ $ 9,059,409 Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 144,146 ​ ​ — ​ ​ 144,146 Vested restricted stock — ​ ​ — ​ 9,334 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Retired shares ​ — ​ ​ — ​ ( 8 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 3,957,608 ) ​ ​ ( 3,957,608 ) BALANCE AT MARCH 31, 2020 215 ​ $ 1,148,204 ​ 9,396,015 ​ $ 94 ​ $ 119,736,512 ​ $ ( 115,638,863 ) ​ $ 5,245,947 Issuance of common stock and warrants, net of issuance costs ​ — ​ ​ — ​ 14,601,628 ​ ​ 146 ​ ​ 18,258,435 ​ ​ — ​ ​ 18,258,581 Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 92,643 ​ ​ — ​ ​ 92,643 Conversion of warrants for common shares — ​ ​ — ​ 1,474,740 ​ ​ 14 ​ ​ — ​ ​ — ​ ​ 14 Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 3,611,925 ) ​ ​ ( 3,611,925 ) BALANCE AT JUNE 30, 2020 ​ 215 ​ $ 1,148,204 ​ 25,472,383 ​ $ 254 ​ $ 138,087,590 ​ $ ( 119,250,788 ) ​ $ 19,985,260 Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 116,292 ​ ​ — ​ ​ 116,292 Conversion of warrants for common shares — ​ ​ — ​ 1,341,210 ​ ​ 14 ​ ​ 31,697 ​ ​ — ​ ​ 31,711 Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 3,909,563 ) ​ ​ ( 3,909,563 ) BALANCE AT SEPTEMBER 30, 2020 215 ​ $ 1,148,204 ​ 26,813,593 ​ $ 268 ​ $ 138,235,579 ​ $ ( 123,160,351 ) ​ $ 16,223,700 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BALANCE AT DECEMBER 31, 2020 1,734 ​ $ 20,035,849 ​ 45,442,729 ​ $ 454 ​ $ 161,533,653 ​ $ ( 126,775,427 ) ​ $ 54,794,529 Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 124,564 ​ ​ — ​ ​ 124,564 Conversion of preferred shares for common shares ​ ( 789 ) ​ ​ ( 8,288,652 ) ​ 6,278,236 ​ ​ 63 ​ ​ 8,288,589 ​ ​ — ​ ​ — Exercise of warrants for common shares ​ — ​ ​ — ​ 1,005,320 ​ ​ 10 ​ ​ 1,213,914 ​ ​ — ​ ​ 1,213,924 Retired shares ​ — ​ ​ — ​ ( 7 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 6,357,170 ) ​ ​ ( 6,357,170 ) BALANCE AT MARCH 31, 2021 945 ​ $ 11,747,197 ​ 52,726,278 ​ $ 527 ​ $ 171,160,720 ​ $ ( 133,132,597 ) ​ $ 49,775,847 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 200,617 ​ ​ — ​ ​ 200,617 Conversion of preferred shares for common shares ​ ( 250 ) ​ ​ ( 3,109,552 ) ​ 2,500,000 ​ ​ 25 ​ ​ 3,109,527 ​ ​ — ​ ​ — Issuance of common stock, net of issuance costs ​ — ​ ​ — ​ 41,692 ​ ​ 1 ​ ​ 34,872 ​ ​ — ​ ​ 34,873 Retired shares ​ — ​ ​ — ​ ( 39 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 6,028,030 ) ​ ​ ( 6,028,030 ) BALANCE AT JUNE 30, 2021 695 ​ $ 8,637,645 ​ 55,267,931 ​ $ 553 ​ $ 174,505,736 ​ $ ( 139,160,627 ) ​ $ 43,983,307 Stock-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ ​ 421,161 ​ ​ — ​ ​ 421,161 Conversion of preferred shares for common shares ( 584 ) ​ ( 7,255,622 ) 5,833,333 ​ 58 ​ 7,255,564 ​ — ​ — Net loss — ​ — — ​ — ​ — ​ ( 5,819,064 ) ​ ( 5,819,064 ) BALANCE AT SEPTEMBER 30, 2021 111 ​ ​ 1,382,023 61,101,264 ​ $ 611 ​ $ 182,182,461 ​ $ ( 144,979,691 ) ​ $ 38,585,404 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 7 Table of Contents CELLECTAR BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ Net loss ​ $ ( 18,204,264 ) ​ $ ( 11,479,096 ) Adjustments to reconcile net loss to cash used in operating activities: ​ ​ ​ ​ ​ Depreciation and amortization ​ 110,624 ​ ​ 105,529 Stock-based compensation expense ​ 746,342 ​ ​ 353,081 Noncash lease expense ​ 57,160 ​ ​ 48,859 Loss on disposal of fixed assets ​ 2,938 ​ ​ — Changes in: ​ ​ ​ ​ Prepaid expenses and other current assets ​ ( 273,650 ) ​ ​ ( 189,955 ) Lease liability ​ ( 88,268 ) ​ ​ ( 77,897 ) Accounts payable and accrued liabilities ​ ( 408,708 ) ​ ​ 1,175,445 Cash used in operating activities ​ ( 18,057,826 ) ​ ​ ( 10,064,034 ) CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ Purchases of fixed assets ​ ( 11,622 ) ​ ​ ( 45,143 ) Cash used in investing activities ​ ( 11,622 ) ​ ​ ( 45,143 ) CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ Proceeds from issuance of common stock, net of underwriting issuance costs ​ ​ 34,874 ​ ​ 18,258,581 Deferred issuance costs ​ ​ — ​ ​ ( 137,907 ) Proceeds from long-term obligations ​ ​ — ​ ​ 184,000 Issuance of common stock in connection with exercise of pre-funded warrants ​ ​ — ​ ​ 28 Proceeds from exercise of warrants ​ ​ 1,213,924 ​ ​ 31,697 Cash provided by financing activities ​ 1,248,798 ​ ​ 18,336,399 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ​ ( 16,820,650 ) ​ ​ 8,227,222 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ​ 57,165,377 ​ ​ 10,614,722 CASH AND CASH EQUIVALENTS AT END OF PERIOD ​ $ 40,344,727 ​ $ 18,841,944 ​ ​ ​ ​ ​ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION ​ ​ ​ ​ Cash paid for interest expense ​ $ — ​ $ 1,584 Conversion of preferred stock to common stock ​ $ 18,653,826 ​ $ — ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 8 Table of Contents CELLECTAR BIOSCIENCES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. NATURE OF BUSINESS AND ORGANIZATION Cellectar Biosciences, Inc. (the “Company”) is a late-stage clinical biopharmaceutical company focused on the discovery and development of drugs for the treatment of cancer leveraging our proprietary phospholipid drug conjugate™ (PDC™) delivery platform that specifically targets cancer cells and deliver improved efficacy and better safety as a result of fewer off-target effects. The Company has incurred losses since inception in devoting substantially all of its efforts toward research and development and has an accumulated deficit of approximately $ 144,979,691 at September 30, 2021. During the nine months ended September 30, 2021, the Company generated a net loss of approximately $ 18,204,264 and expects that it will continue to generate operating losses for the foreseeable future. However, the Company believes that its cash balance at September 30, 2021 is adequate to fund our basic budgeted operations for at least 12 months from the filing of these financial statements.The Company’s ability to execute its current operating plan depends on its ability to obtain additional funding via the sale of equity and/or debt securities, a strategic transaction or otherwise. The Company plans to continue to actively pursue financing alternatives , but there can be no assurance that it will obtain the necessary funding. The accompanying Condensed Consolidated Balance Sheet as of December 31, 2020 has been derived from our audited financial statements. The accompanying unaudited Condensed Consolidated Balance Sheet as of September 30, 2021, and the Condensed Consolidated Statements of Operations, the Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020, the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020, and the related interim information contained within the notes to the Condensed Consolidated Financial Statements, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions, rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information and the notes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments which are of a nature necessary for the fair presentation of the Company’s consolidated financial position at September 30, 2021 and consolidated results of its operations and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and cash flows for the nine months ended September 30, 2021 and 2020. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of future results. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on March 2, 2021. Principles of Consolidation — The consolidated financial statements include the accounts of the Company and the accounts of its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Fixed Assets — Property and equipment are stated at cost. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets ( 3 to 10 years ). Because of the significant value of leasehold improvements purchased, leasehold improvements are depreciated over 64 months (their estimated useful life), which represents the full term of the lease. Our only long-lived assets are property and equipment. The Company periodically evaluates long-lived assets for potential impairment. Whenever events or circumstances change, an assessment is made as to whether there has been impairment to the value of long-lived assets by determining whether projected undiscounted cash flows generated by the applicable asset exceed its net book value as of the assessment date. There were no long-lived fixed asset impairment charges recorded during the nine months ended September 30, 2021 or year ended December 31, 2020. Right-of-Use (ROU) Asset and Lease Liabilities -On January 1, 2019, the Company implemented FASB Accounting Standards Codification (“ASC”) Topic 842 using the modified retrospective method for all material leases that existed at or commenced after January 1, 2019. ROU Assets are amortized over their estimated useful life, which represents the full term of the lease. Stock-Based Compensation — The Company uses the Black-Scholes option-pricing model to calculate the grant-date fair value of stock option awards. The resulting compensation expense for awards that are not performance-based is recognized on a straight-line basis over the service period of the award, which for grants issued in 2021 and 2020 ranged from one year to three years for stock options. 9 Table of Contents Research and Development — Research and development costs are expensed as incurred. The Company recognizes revenue and cost reimbursements from government grants when it is probable that the Company will comply with the conditions attached to the grant arrangement and the grant proceeds will be received. Government grants are recognized in the Consolidated Statements of Operations on a systematic basis over the periods in which the Company recognizes the related costs for which the government grant is intended to compensate. Specifically, when government grants are related to reimbursements for cost of revenues or operating expenses, the government grants are recognized as a reduction of the related expense in the Consolidated Statements of Operations. The Company records government grants receivable in the Consolidated Balance Sheets in accounts receivable. Income Taxes — Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement basis and tax basis of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when it is more likely than not that some portion of the deferred tax assets will not be realized. Management has provided a full valuation allowance against the Company’s gross deferred tax asset. Tax positions taken or expected to be taken in the course of preparing tax returns are required to be evaluated to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. Tax positions deemed not to meet a more-likely-than-not threshold would be recorded as tax expense in the current year. There were no uncertain tax positions that require accrual to or disclosure in the financial statements as of September 30, 2021 and December 31, 2020. Fair Value of Financial Instruments — The guidance under FASB ASC Topic 825, Financial Instruments , requires disclosure of the fair value of certain financial instruments. Financial instruments in the accompanying financial statements consist of cash equivalents, prepaid expenses and other assets, accounts payable and long-term obligations. The carrying amount of cash equivalents and accounts payable approximate their fair value as a result of their short-term nature. (See Note 2) Concentration of Credit Risk — Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions. The Company’s excess cash as of September 30, 2021 and December 31, 2020 is on deposit in interest-bearing transaction accounts with well-established financial institutions. At times, such amounts may exceed the FDIC insurance limits. As of September 30, 2021, and December 31, 2020, uninsured cash balances totaled approximately $ 39,800,000 and $ 56,700,000 , respectively. Recently Adopted Accounting Pronouncements - For the fiscal year beginning January 1, 2021, management early adopted Accounting Standards Update (“ASU”) 2020-06 using the modified retrospective method. ASU 2020-06 simplifies entities’ accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature (“BCF”) models outlined in ASC 470-20 Debt-Debt with Conversion and Other Options . Under ASU 2020-06, convertible instruments that would have previously been subject to the BCF or cash conversion guidance no longer require separate accounting for the conversion feature. Entities may elect to early adopt ASU 2020-06 for fiscal years beginning after December 15, 2020. Since the Company early adopted ASU 2020-06 beginning January 1, 2021, the Company would no longer be required to recognize a BCF even when shareholder approval is received. In December 2020, the Company completed a private placement where we issued Series D convertible preferred stock. The preferred shares are convertible into shares of common stock upon receipt of stockholder approval of the issuance of the underlying shares of common stock as required by Nasdaq Marketplace Rule 5635(d) at a special stockholder meeting. The shareholders approved this conversion on February 25, 2021. As such, management will continue to account for the Series D preferred stock in equity without any separate accounting for the conversion options. ​ ​ ​ 2. FAIR VALUE In accordance with the Fair Value Measurements and Disclosures Topic of the FASB ASC 820, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value: ● Level 1: Input prices quoted in an active market for identical financial assets or liabilities. ​ ● Level 2: Inputs other than prices quoted in Level 1, such as prices quoted for similar financial assets and liabilities in active markets, prices for identical assets, and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data. ​ 10 Table of Contents ● Level 3: Input prices quoted that are significant to the fair value of the financial assets or liabilities which are not observable or supported by an active market. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying value of cash and cash equivalents approximates fair value as maturities are less than three months. The carrying amounts reported on the Consolidated Balance sheets for other current financial assets and liabilities approximate fair value because of their short-term nature. ​ ​ 3. STOCKHOLDERS’ EQUITY Authorized Share Increase At a special meeting held on February 25, 2021, the Company’s stockholders approved the amendment of the Company’s Second Amended and Restated Certificate of Incorporation, as amended, to increase the authorized common stock from 80,000,000 shares to 160,000,000 shares. Equity Distribution Agreement On August 11, 2020, the Company entered into an equity distribution agreement (the “Sales Agreement”) with Oppenheimer & Co. Inc. (the “Sales Agent”). Pursuant to the Sales Agreement, the Company may offer and sell from time to time through the Sales Agent, up to $ 14.5 million of shares of the Company’s common stock, par value $ 0.00001 per share (the “ATM Shares”). The Sales Agent will receive from the Company a commission of 3.0 % of the gross proceeds from the sales of the ATM Shares pursuant to the terms of the Sales Agreement. The offering of the ATM Shares pursuant to the Sales Agreement will terminate upon the earliest of (i) the sale of all ATM Shares subject to the Sales Agreement, and (ii) the termination of the Sales Agreement by the Company or the Sales Agent. Net proceeds from the sale of the ATM Shares will be used for general corporate purposes, including working capital. The ATM Shares issued under the Sales Agreement are offered pursuant to a registration statement on Form S-3, which was declared effective by the SEC on August 20, 2020. In June 2021, the Company issued and sold an aggregate of 41,692 ATM Shares pursuant to the Sales Agreement and received gross proceeds of approximately $ 69,000 and net proceeds of $ 35,000 after deducting commissions to the Sales Agent and other offering expenses. December 2020 Public Offering and Private Placement On December 23, 2020, the Company issued and sold 18,148,136 shares of common stock, par value $ 0.00001 per share, at a public offering price of $ 1.35 per share of common stock, prior to deducting underwriting discounts and commissions and estimated offering expenses. 11 Table of Contents In a concurrent private placement, the Company issued and sold 1,518.5180 shares of Series D convertible preferred stock. The preferred shares are convertible into a number of shares of common stock equal to $ 13,500 divided by $ 1.35 (or 10,000 shares of common stock for each share of Series D preferred stock converted) and were issued at a price of $ 13,500 per share of Series D preferred stock. The preferred shares will only be convertible into common stock upon receipt of stockholder approval of the issuance of the underlying shares of common stock as required by Nasdaq Marketplace Rule 5635(d) at a special stockholder meeting to be called for that purpose. At a special meeting of stockholders held on February 25, 2021, the stockholders approved, in accordance with Nasdaq Listing Rule 5635(d), the issuance of shares of the Company’s common stock upon the conversion of the Series D preferred stock. During the three months ended March 31, 2021, 574.0736 shares of our Series D convertible preferred stock were converted into 5,740,736 Common Stock at a rate of 1 to 10,000 shares. During the three months ended June 30, 2021, 250 shares of our Series D convertible preferred stock were converted into 2,500,000 Common Stock at a rate of 1 to 10,000 shares. During the three months ended September 30, 2021, 583.33 shares of our Series D convertible preferred stock were converted into 5,833,333 Common Stock at a rate of 1 to 10,000 shares. For the nine months ended September 30, 2021 the total Series D convertible preferred stock converted into 14,074,069 Common Stock at a rate of 1 to 10,000 shares. The net proceeds of the offerings to the Company, after deducting the underwriting discounts and commissions, placement agency fees and estimated offering expenses payable by the Company were approximately $ 41.4 million. The common stock issued in the public offering was offered by the Company pursuant to a registration statement on Form S-3, which was declared effective by the SEC on August 20, 2020. The common stock issuable upon conversion of the Series D preferred stock in the private placement was offered by the Company pursuant to a registration statement on Form S-3, which was declared effective by the SEC on February 1, 2021. In accordance with the concept of ASC 820 regarding the December 2020 public offering, the Company allocated the value of the proceeds to the common stock and preferred stock utilizing a relative fair value basis. Using the Nasdaq closing trading price for our stock on December 28, 2020, the Company computed the fair value of the shares sold. The fair value of the preferred stock was estimated on a relative fair value basis. This valuation did not impact total Stockholders’ Equity of $ 45.0 million, but is an internal proportionate calculation allocating the gross proceeds of approximately $ 24.5 million to common stock and $ 20.5 million to preferred stock. June 2020 Public Offering On June 5, 2020, the Company issued and sold 14,601,628 shares of common stock, 2,789,700 pre-funded warrants exercisable for one share of our common stock at an exercise price of $ 0.00001 per share and 8,695,664 Series H warrants to purchase 8,695,664 shares of common stock. The public offering price of a share of common stock together with one-half of a Series H warrant to purchase one share of common stock was $ 1.15 . The public offering price of a pre-funded warrant together with one-half of a Series H Warrant was $ 1.1499 . The Series H warrants have an exercise price of $ 1.2075 per share and are exercisable for five years from the date of issuance. As of September 30, 2021, all 2,789,700 pre-funded warrants have been exercised. As of September 30, 2021, a total of 1,487,695 Series H warrants have been exercised. In accordance with the concept of ASC 820 regarding the June 2020 public offering, the Company allocated value of the proceeds to the common stock and warrants utilizing a relative fair value basis. Using the Nasdaq closing trading price for our stock on June 5, 2020, the Company computed the fair value of the shares sold. The fair value of the warrants was estimated using the Black-Scholes option-pricing model at that same date. This valuation did not impact total Stockholders’ Equity of $ 20.0 million, but is an internal proportionate calculation allocating the gross proceeds of approximately $ 12.1 million to common stock and $ 7.9 million to warrants. Gross offering proceeds to the Company were $ 20.0 million, with net proceeds to the Company of approximately $ 18.3 million after deducting placement agent fees and related offering expenses. The Company intends to use the net proceeds from the offering for research and development, funding clinical studies, working capital and general corporate purposes. 12 Table of Contents The common stock, pre-funded warrants and Series H warrants were offered by the Company pursuant to a registration statement on Form S-1 , which was declared effective by the SEC on June 2, 2020 and an additional registration statement filed on June 2, 2020 pursuant to Rule 462(b) under the Act. Common Stock Warrants The following table summarizes information with regard to outstanding warrants to purchase common stock as of September 30, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ ​ ​ ​ ​ ​ ​ Issuable Upon ​ ​ ​ ​ ​ ​ Exercise of ​ ​ ​ ​ ​ ​ Outstanding ​ Exercise ​ Offering Warrants Price Expiration Date June 2020 Series H Warrants ​ 7,207,969 ​ $ 1.2075 ​ June 5, 2025 May 2019 Series F Warrants ​ 1,957,000 ​ $ 2.40 ​ May 20, 2024 May 2019 Series G Warrants ​ 2,018,000 ​ $ 2.40 ​ May 20, 2024 July 2018 Series E Warrants 4,140,000 ​ $ 4.00 July 31, 2023 October 2017 Series D Warrants ​ 310,856 ​ $ 17.80 October 14, 2024 November 2016 Public Offering Series C 415,785 ​ $ 15.00 November 29, 2021 October 2015 Incremental Series A 30,006 ​ $ 21.30 October 20,2021 Total 16,079,616 ​ ​ ​ 4. STOCK-BASED COMPENSATION Accounting for Stock-Based Compensation 2021 Stock Incentive Plan The 2021 Stock Incentive Plan (the “2021 Plan”) was adopted on June 23, 2021 authorizing an aggregate of 6,000,000 shares of common stock for grants of incentive or nonqualified stock options, rights to purchase restricted and unrestricted shares of common stock, stock appreciation rights and performance share grants. The Compensation Committee determines exercise prices, vesting periods and any performance requirements on the date of grant, subject to the provisions of the 2021 Plan. Options are granted at or above the fair market value of the common stock at the grant date and expire on the tenth anniversary of the grant date. Vesting periods are generally between one and four years . Options granted pursuant to the 2021 Plan generally will become fully vested upon a termination event occurring within one year following a change in control, as defined. A termination event is defined as either termination of employment or services other than for cause or constructive termination of employees or consultants resulting from a significant reduction in either the nature or scope of duties and responsibilities, a reduction in compensation or a required relocation. All outstanding awards under the 2015 Stock Incentive Plan (the “2015 Plan”) remained in effect according to the terms of the 2015 Plan and the respective agreements relating to such awards. In addition, any shares that are currently available under the 2015 Plan and any shares underlying awards under the 2015 Plan which are forfeited, cancelled, reacquired by the Company or otherwise terminated will be added to the number of shares available for grant under the 2021 Plan. As of September 30, 2021, there are an aggregate of 3,184,363 shares available for future grants under the 2021 Plan. 13 Table of Contents During the nine-month periods ended September 30, 2021 and 2020, options granted were 3,537,500 and 653,750 , respectively. The following table summarizes amounts charged to expense for stock-based compensation related to employee and director stock option grants: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee and director stock option grants: ​ ​ ​ ​ Research and development ​ $ 62,655 ​ $ 22,858 ​ $ 133,450 ​ $ 50,071 General and administrative ​ 358,506 ​ 93,435 ​ 612,892 ​ 303,010 Total stock-based compensation ​ $ 421,161 ​ $ 116,292 ​ $ 746,342 ​ $ 353,081 ​ On March 4, 2021, we granted 2,810,000 contingent non-statutory stock option awards at an exercise price of $ 1.74 per share to our employees. Each of these grants was contingent on approval of the 2021 Plan that was voted on and approved by the stockholders at the Annual Meeting of Stockholders held on June 23, 2021. In accordance with the timing of the stockholder approval, the Company recognized the compensation expense of the contingent non-statutory stock option awards issued in March 2021 beginning in June 2021 and continuing through vesting period. Assumptions Used in Determining Fair Value Valuation and amortization method . The fair value of each stock award is estimated on the grant date using the Black-Scholes option-pricing model. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the required service period which is generally the vesting period. The estimated fair value of the non-employee options is amortized to expense over the period during which a non-employee is required to provide services for the award (usually the vesting period). Volatility. The Company estimates volatility based on the Company’s historical volatility since its common stock is publicly traded. Risk-free interest rate . The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. Expected term . The expected term of stock options granted is based on an estimate of when options will be exercised in the future. The Company applies the simplified method of estimating the expected term of the options, as described in the SEC’s Staff Accounting Bulletins 107 and 110, as the historical experience is not indicative of the expected behavior in the future. The expected term, calculated under the simplified method, is applied to groups of stock options that have similar contractual terms. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted. The Company applied the simplified method to non-employees who have a truncation of term based on termination of service and utilizes the contractual life of the stock options granted for those non-employee grants which do not have a truncation of service. Forfeitures. The Company records stock-based compensation expense only for those awards that are expected to vest. The Company accounts for forfeitures as they occur. Dividends. The Company has not historically recorded dividends related to stock options. Exercise prices for all grants made during the nine months ended September 30, 2021 were equal to the market value of the Company’s common stock on the date of grant. 14 Table of Contents Stock Option Activity A summary of stock option activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Average ​ ​ ​ ​ ​ Shares Issuable ​ ​ ​ ​ Remaining ​ ​ ​ ​ ​ Upon Exercise ​ Weighted ​ Contracted ​ Aggregate ​ ​ of Outstanding ​ Average ​ Term in ​ Intrinsic ​ Options Exercise Price Years Value Outstanding at December 31, 2020 1,184,464 ​ $ 4.34 ​ ​ ​ $ 316,688 Granted 208,500 ​ $ 1.78 ​ ​ ​ ​ ​ Outstanding at March 31, 2021 ​ 1,392,964 ​ $ 3.96 ​ 8.56 ​ $ 122,700 Granted ​ 3,309,000 ​ $ 1.66 ​ ​ ​ ​ ​ Expired ( 177 ) ​ $ 2,800.00 ​ ​ Outstanding at June 30, 2021 ​ 4,701,787 ​ $ 2.23 ​ 9.31 ​ $ — Granted ​ 20,000 ​ $ 1.06 ​ ​ ​ ​ ​ Forfeited ( 46,001 ) ​ $ 2.01 ​ ​ Outstanding at September 30, 2021 4,675,786 ​ $ 2.23 ​ 9.05 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable, September 30, 2021 810,100 ​ $ 4.87 ​ 7.45 ​ $ — Unvested, September 30, 2021 3,865,686 ​ $ 1.68 ​ 9.38 ​ $ — ​ The aggregate intrinsic value of options outstanding is calculated based on the positive difference between the estimated per-share fair value of common stock at the end of the respective period and the exercise price of the underlying options. There have been no option exercises to date. Shares of common stock issued upon the exercise of options are from authorized but unissued shares. As of September 30, 2021, there was approximately $ 3,005,000 of total unrecognized compensation cost related to unvested stock-based compensation arrangements. Of this total amount, the Company expects to recognize approximately $ 413,000 , $ 1,396,000 , $ 1,020,000 , and $ 176,000 during 2021, 2022, 2023, and 2024 respectively. The Company’s expense estimates are based upon the expectation that all unvested options will vest in the future. The weighted-average grant-date fair value of vested and unvested options outstanding at September 30, 2021 was $ 3.86 and $ 0.90 , respectively. Restricted Stock Grant s. During 2017, the Company issued 46,000 shares under the 2015 Plan of restricted common stock with a weighted average grant date fair value of $ 20.96 . The shares vested annually over a three year period. The following table summarizes the restricted stock grants: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Grant Date ​ Total Grant ​ ​ Number of ​ Fair Value ​ Date Fair ​ Shares Per Share Value Outstanding at December 31, 2019 9,334 ​ $ 21.00 ​ $ 196,000 Vested ( 9,334 ) ​ $ 21.00 ​ $ ( 196,000 ) Outstanding at December 31, 2020 — ​ $ — ​ $ — ​ ​ 15 Table of Contents 5. INCOME TAXES The Company accounts for income taxes in accordance with the liability method of accounting. Deferred tax assets or liabilities are computed based on the difference between the financial statement and income tax basis of assets and liabilities, and net operating loss carryforwards (“NOLs”), using the enacted tax rates. Deferred income tax expense or benefit is based on changes in the asset or liability from period to period. The Company did not record a provision or benefit for federal, state or foreign income taxes for the nine months ended September 30, 2021 or 2020 because the Company has experienced losses on a tax basis since inception. Because of the limited operating history, continuing losses and uncertainty associated with the utilization of the NOLs in the future, management has provided a full allowance against the value of its gross deferred tax assets. The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable accounting guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in income tax positions. No uncertain tax positions have been identified. ​ 6. NET LOSS PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share for the three and nine months ended September 30, 2021 and September 30, 2020 is computed by dividing net income (loss) by the sum of the weighted average number of shares of common stock and the dilutive potential common stock equivalents then outstanding. Potential common stock equivalents consist of stock options, warrants, non-vested restricted stock, preferred shares convertible into common stock and, pre-funded warrants. Since there is a net loss attributable to common stockholders for the three and nine months ended September 30, 2021 and September 30, 2020, the inclusion of common stock equivalents in the computation for that period would be antidilutive. The following potentially dilutive securities have been excluded from the computation of diluted net income (loss) per share since their inclusion would be antidilutive: ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ 2021 2020 Warrants 16,079,616 17,937,766 Preferred shares as convertible into common stock 1,111,111 537,500 Stock options 4,675,786 1,184,464 Total potentially dilutive shares 21,866,513 19,659,730 ​ ​ ​ 7. COMMITMENTS AND CONTINGENCIES Real Property Leases Florham Park, New Jersey On June 4, 2018, the Company entered in an Agreement of Lease for 3,893 square feet for its corporate headquarters in Borough of Florham Park, New Jersey (the “HQ Lease”). The HQ Lease commencement date was October 2018 and terminates in February 2024. The Company has an option to extend the term of the HQ Lease for one additional 60-month period. Under the terms of the HQ Lease, the Company paid a security deposit of $ 75,000 and the aggregate rent due over the term of the HQ Lease is approximately $ 828,000 , which will be reduced to approximately $ 783,000 after certain rent abatements. The Company is required to pay its proportionate share of certain operating expenses and real estate taxes applicable to the leased premises. After certain rent abatements the rent is approximately $ 12,500 per month for the first year and then escalates thereafter by 2 % per year for the duration of the term. Madison, Wisconsin The Company presently rents office space in Madison and is rented for approximately $ 3,000 per month under an agreement that expires on August 31, 2022. 16 Table of Contents Operating Lease Liability In June 2018, the Company entered into the HQ Lease. The HQ Lease commenced upon completion of certain improvements by the landlord in October 2018 and terminates in February 2024 with an option to extend the term of the lease for one additional 60-month period. As of December 31, 2018, the Company recorded a deferred lease liability of approximately $ 176,000 for the improvements funded by the landlord on the consolidated balance sheet. The Company amortizes the deferred liability as a reduction to rent expense in the consolidated statement of operations over the term of the lease. Under the HQ Lease, the Company will pay monthly fixed rent based on approximate rate per rentable square foot which ranges between approximately $ 12,400 to $ 13,600 over the lease period. In addition, the Company received certain rent abatements and lease incentives subject to the limitations in the HQ Lease. The HQ Lease’s net ROU asset and lease liability are approximately $ 225,000 and ($ 333,000 ), respectively, as of September 30, 2021 and rental expense for the nine months ended September 30, 2021 is approximately $ 85,000 . Discount Rate The Company has determined the interest rate implicit in the lease considering factors such as Company’s credit rating, borrowing terms offered by the U.S. Small Business Administration, amount of lease payments, quality of collateral and alignment of the borrowing term and lease term. The Company considers 10 % per annum as reasonable to use as the incremental borrowing rate for purposes of the calculation of lease liabilities. Maturity Analysis of Short-Term and Operating Leases The following table approximates the dollar maturity of the Company’s undiscounted payments for its short-term leases and operating lease liabilities as of September 30, 2021: ​ ​ ​ ​ ​ Years ending December 31, ​ ​ Remainder of 2021 ​ $ 39,000 2022 ​ ​ 158,000 2023 ​ ​ 161,000 2024 ​ ​ 14,000 Total undiscounted lease payments ​ ​ 372,000 Less: Imputed interest ​ ​ ( 39,000 ) Present value of lease liabilities ​ $ 333,000 ​ Legal The Company may be involved in legal matters and disputes in the ordinary course of business. We do not anticipate that the outcome of such matters and disputes will materially affect the Company’s financial statements. ​ 8. LOAN PAYABLE On April 21, 2020, the Company received loan proceeds in the amount of approximately $ 184,000 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after 24 weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the 24-week period. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1 %, with a deferral of payments for the first six months. The Company intends to use the proceeds for purposes consistent with the PPP requirements. On December 30, 2020, the principal loan amount of $ 184,000 and accrued interest of $ 1,280 were forgiven and recognized as a gain on extinguishment of debt in the fourth quarter of 2020. ​ ​ 17 Table of Contents ​