What changed in this filing

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Item 1. Financial Statements

2024-11-13 compared with 2024-08-07 · 91 added, 53 removed, 368 unchanged (28% of the section changed)

2 unchanged sentences

Balance Sheets

September 30,

Cash and cash equivalents

7 unchanged sentences

Common Stock, par value $ 0.0001 per share, 250,000,000 shares authorized;

693,175 shares issued and outstanding as of June 30, 2024;

1,677,768 shares issued and outstanding as of September 30, 2024;

261,998 shares issued and outstanding as of December 31, 2023.

9 unchanged sentences

For the three months ended

For the six months ended

September 30,

For the nine months ended

September 30,

Operating expenses:

34 unchanged sentences

$ ( 59,351,246 )

Issuance of pre-funded warrants and warrants, net of issuance costs

Issuance of Common Stock upon exercise of pre-funded warrants

Issuance of Common Stock from ATM sales, net of issuance costs

Issuance of abeyance shares

Stock-based compensation

( 3,173,156 )

Balance at September 30, 2024

$ ( 62,524,402 )

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

19 unchanged sentences

$ ( 49,534,694 )

Stock-based compensation

Issuance costs

( 1,719,211 )

Balance at September 30, 2023

$ ( 51,253,905 )

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

1 unchanged sentence

Statements of Cash Flows

For the six months ended

For the nine months ended

September 30,

Cash flows from operating activities:

12 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of Common Stock and warrants, net of issuance costs

Issuance costs paid setting up ATM

Proceeds from issuance of Common Stock, pre-funded warrants, and warrants, net of issuance costs

Proceeds from exercise of pre-funded warrants

8 unchanged sentences

Incremental fair value of May 2024 warrant inducement

Equity issuance costs in accounts payable or accrued expenses

Deferred offering costs included in accounts payable and accrued expenses

Issuance costs in accounts payable or accrued expenses

Incremental fair value of March 2023 warrant modification

9 unchanged sentences

Reverse Stock Splits

On May 7, 2024, the Company held its annual meeting of stockholders at which time the stockholders approved the adoption of an amendment to its Amended and Restated Certificate of Incorporation, as amended (the “Charter”), to effect a reverse stock split of its issued and outstanding shares of Common Stock, at a specific ratio, ranging from one-for-five to one-for-thirty, with the exact ratio determined by the Company’s board of directors without further approval or authorization of its stockholders (the “Reverse Split”).

On May 16, 2024, the Company effected the Reverse Split of its shares of Common Stock at a ratio of 1-for-15, as approved by the Company’s board of directors (the “May 2024 Reverse Stock Split”).

The par value was not adjusted as a result of the May 2024 Reverse Stock Split.

All issued and outstanding shares of Common Stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented.

On March 13, 2023, the Company effected a reverse stock split of shares of the Company’s Common Stock at a ratio of 1-for-16 pursuant to an amendment to the Company’s certificate of incorporation approved by the Company’s board of directors and stockholders.

1 unchanged sentence

On May 7, 2024, the Company held its annual meeting of stockholders at which time the stockholders approved the adoption of an amendment to its Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of its issued and outstanding shares of Common Stock, at a specific ratio, ranging from one-for-five to one-for-thirty, with the exact ratio determined by the Company’s board of directors without further approval or authorization of its stockholders.

On May 16, 2024, the Company effected the reverse split of its shares of Common Stock at a ratio of 1-for-15, as approved by the Company’s board of directors.

The par value was not adjusted as a result of the May 2024 reverse stock split.

Liquidity and Going Concern Uncertainty

Since its inception, the Company has devoted substantially all of its resources to research and development activities and has not generated any revenue or commercialized any product candidates.

As of June 30, 2024, cash and cash equivalents totaled $ 4.9 million and the Company had an accumulated deficit of $ 59.4 million.

For the six months ended June 30, 2024, and the year ended December 31, 2023, the Company used cash of $ 4.8 million and $ 6.4 million, respectively, in operations.

The Company’s cash and cash equivalents are expected to fund operations into the fourth quarter of 2024.

As of September 30, 2024, cash and cash equivalents totaled $ 6.1 million and the Company had an accumulated deficit of $ 62.5 million.

For the nine months ended September 30, 2024, and the year ended December 31, 2023, the Company used cash of $ 8.2 million and $ 6.4 million, respectively, in operations.

The Company’s cash and cash equivalents are expected to fund operations into the second quarter of 2025.

The Company anticipates that it will continue to incur net losses for the foreseeable future.

21 unchanged sentences

Actual results could differ materially from those estimates.

The unaudited financial statements included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024, which includes a broader discussion of the Company’s business and the risks inherent therein.

The unaudited financial statements included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with Securities and Exchange Commission (the “SEC”) on March 21, 2024, which includes a broader discussion of the Company’s business and the risks inherent therein.

Summary of Significant Accounting Policies

3 unchanged sentences

On an ongoing basis, management evaluates these estimates and judgments, including those related to accrued research and development expenses.

Management evaluates its estimates on an ongoing basis.

The Company bases its estimates on various assumptions that it believes are reasonable under the circumstances.

14 unchanged sentences

Deferred Financing Costs

The Company capitalizes certain legal, accounting, and other fees and costs that are directly attributable to in-process equity financing as deferred offering costs until such financings are completed.

The Company capitalizes certain legal, accounting, and other fees and costs that are directly attributable to in-process equity financings as deferred offering costs until such financings are completed.

Upon the completion of an equity financing, these costs are recorded as a reduction of additional paid-in capital of the related financing.

As of June 30, 2024, the Company had deferred offering costs of $ 0.1 million.

Fair Value Measurement

45 unchanged sentences

The common share equivalents that are not included in the calculation of diluted net loss per share of Common Stock but could potentially dilute basic earnings per share in the future are as follows:

As of June 30,

As of September 30,

Common Stock options

2 unchanged sentences

Recent Accounting Pronouncements

For the six months ended June 30, 2024, the Company has reviewed recent accounting standards and identified the following as relevant to the Company.

For the nine months ended September 30, 2024, the Company has reviewed recent accounting standards and identified the following as relevant to the Company.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) , which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU No 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and for interim reporting periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its financial statement disclosures.

In December 2023, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact of this guidance on its financial statements and income tax footnote.

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) .

ASU 2024-03 requires additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its financial statements.

Balance Sheet Details

The following provides certain balance sheet details:

September 30,

Prepaid expenses and other current assets:

2 unchanged sentences

Prepaid other and other current assets

Deferred offering costs

Total prepaid expenses and other current assets

5 unchanged sentences

Equity Securities

A summary of the Company’s equity securities as of June 30, 2024, is as follows:

A summary of the Company’s equity securities as of September 30, 2024, is as follows:

Pre-funded Warrants

Common Stock, par value $0.0001

Preferred Stock

Warrants (excluding pre-funded warrants)

2021 Omnibus Equity Incentive Plan

Total equity securities

On June 7, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C.

Wainwright & Co., LLC (the “Sales Agent”) providing for the sale of up to $ 1,157,761 of its shares of Common Stock, par value $ 0.0001 per share, as set forth in the ATM Agreement.

On September 17, 2024, the Company closed a private placement (the “September 2024 PIPE”) priced at the market under Nasdaq rules, in which it sold 1,912,569 pre-funded warrants to purchase up to an aggregate of 1,912,569 shares of Common Stock with an exercise price of $0.001 per share (the “September 2024 Pre-Funded Warrants”), and 1,912,569 series A warrants (the “September 2024 PIPE Series A Common Warrants”) to purchase up to an aggregate of 1,912,569 shares of Common Stock and 1,912,569 series B warrants (the “September 2024 PIPE Series B Common Warrants” and together with the September 2024 PIPE Series A Warrants, the “September 2024 PIPE Warrants”) to purchase up to an aggregate of 1,912,569 shares of Common Stock.

The September 2024 PIPE Warrants have an exercise price of $ 1.58 .

In connection with the September 2024 PIPE, the Company entered into a registration rights agreement with the investor, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the shares of Common Stock underlying the securities sold in the September 2024 PIPE financing.

The Company filed a Form S-3 on September 19, 2024, which was declared effective by the SEC on September 24, 2024.

The Company received net cash proceeds of approximately 3.1 million from the September 2024 PIPE after deducting underwriters’ discounts and offering expenses of approximately $ 0.4 million.

During the third quarter of 2024, 167,569 of the 1,912,569 September 2024 Pre-Funded Warrants were exercised by the investor.

As of September 30, 2024, 1,745,000 September 2024 Pre-Funded Warrants remained outstanding.

In June 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with a sales agent (the “Sales Agent”), providing for the sale of up to $ 1,157,761 of its shares of Common Stock as set forth in the ATM Agreement.

The Sales Agent will be entitled to compensation at a fixed commission rate of 3.0 % of the gross sales price of the shares of Common Stock sold pursuant to the ATM Agreement, as well as other transactional fees.

As of June 30, 2024, no shares have been sold under the ATM Agreement.

During July 2024, the Company issued 355,806 shares of Common Stock under the ATM Agreement resulting in gross proceeds of $ 1,157,248 before deducting issuance costs.

After issuance of the 355,806 shares during July 2024, $ 513 remained registered under the ATM Agreement.

On August 2, 2024, the Company increased the maximum aggregate offering amount of Common Stock issuable under the ATM Agreement by $ 505,000 , from $1,157,761 to $1,662,761.

During September 2024, the Company issued 194,218 shares of Common Stock under the ATM Agreement resulting in additional gross proceeds of $ 504,894 before deducting issuance costs.

During the quarter ended September 30, 2024, the Company issued a total of 550,024 shares from its ATM resulting in net proceeds of $ 1.5 million after deducting issuer costs and other expenses related to setting up and issuing shares from the Company’s ATM.

As of September 30, 2024, the Company does not have any remaining capacity under its ATM Agreement.

On May 21, 2024, the Company closed on inducement agreements (the “May 2024 Inducement”) with certain holders (the “Holders”) of certain of the Company’s existing warrants to purchase up to an aggregate of 516,336 shares of the Company’s Common Stock, issued to the Holders on (i) May 26, 2023 (the “May 2023 Warrants”), having an exercise price of $32.40 per share, and (ii) November 2023 New Warrants (as defined below), which were issued in two separate series, each having an exercise price of $9.7665 per share (together with the May 2023 Warrants, the “May 2024 Existing Warrants”).

1 unchanged sentence

The Company received net proceeds of approximately $ 2.3 million from the exercise of the May 2024 Existing Warrants by the Holders, after deducting placement agent fees and other offering expenses payable by the Company.

Related to the May 2024 Inducement, as of June 30, 2024, t he Holders left 267,000 shares in abeyance at the Company’s transfer agent to be delivered to the Holders at their request .

Accordingly, as of June 30, 2024, 267,000 shares were held in abeyance, which were not issued and not outstanding.

Related to the May 2024 Inducement, during July 2024, the balance of 267,000 of abeyance shares related to the May 2024 Warrant Inducement were released to the investor .

Accordingly, shares outstanding increased by 267,000 during the third quarter of 2024 related to the issuance of the 267,000 abeyance shares from the May 2024 Warrant Inducement, leaving no further abeyance shares outstanding as of September 30, 2024.

On November 20, 2023, the Company closed on an inducement agreement (the “November 2023 Inducement”) with a holder (the “Holder”) of certain of its existing warrants to purchase up to 231,473 shares of the Company’s Common Stock, issued to the Holder on (i) April 25, 2022 (as amended on March 20, 2023, the “April 2022 Warrants”) and (ii) March 20, 2023 (the “March 2023 Warrants” together with the April 2022 Warrants, the “November 2023 Existing Warrants”).

5 unchanged sentences

Accordingly, as of December 31, 2023, 182,000 shares were held in abeyance, which were not issued and not outstanding.

Since all the abeyance shares from the November 2023 Inducement were pulled by the Holder in January 2024, there were no remaining November 2023 Inducement shares held in abeyance as of June 30, 2024.

On May 26, 2023, the Company closed a private placement (the “May 2023 PIPE”) priced at the market under Nasdaq rules, in which it sold 30,570 shares of its Common Stock together with 22,821 pre-funded warrants to purchase up to an aggregate of 53,391 shares of Common Stock with an exercise price of $ 0.0001 per share (the “May 2023 Pre-Funded Warrants”), and 53,391 warrants to purchase up to an aggregate of 53,391 shares of Common Stock with an exercise price of $ 32.40 per share (the “May 2023 PIPE Common Warrants”) at a combined offering price of $ 34.275 .

8 unchanged sentences

Preferred Stock

While the Company has 10,000,000 shares of preferred stock authorized with a par value of $ 0.0001 , no shares of preferred stock are outstanding as of June 30, 2024, or December 31, 2023, respectively.

While the Company has 10,000,000 shares of preferred stock authorized with a par value of $ 0.0001 , no shares of preferred stock are outstanding as of September 30, 2024, or December 31, 2023, respectively.

Summary of Warrants Outstanding

The table below lists outstanding warrants for the dates presented.

The warrants outstanding as of June 30, 2024, are exercisable into 1,109,705 shares of Common Stock which had a fair value of $ 2.39 per share, based on the closing trading price on June 28, 2024, the last trading day prior to June 30, 2024.

The aggregate intrinsic value of warrants outstanding as of June 30, 2024, is calculated as the difference between the exercise price of the warrants and the closing market price of the Company’s Common Stock on that date.

The intrinsic value of warrants outstanding as of June 30, 2024, was zero due to the warrants’ exercise prices being above market value.

The table below lists outstanding warrants for the dates presented, excluding 1,745,000 pre-funded warrants with an exercise price of $ 0.001 .

The warrants outstanding as of September 30, 2024, are exercisable into 5,068,723 shares of Common Stock which had a fair value of $ 1.64 per share, based on the closing trading price on September 30, 2024, the last trading day prior to September 30, 2024.

The aggregate intrinsic value of warrants outstanding as of September 30, 2024, is calculated as the difference between the exercise price of the warrants and the closing market price of the Company’s Common Stock on that date.

The intrinsic value of warrants outstanding as of September 30, 2024, was $ 0.2 million.

Quantity of Warrants Outstanding as of

June 30, 2024

September 30, 2024

December 31, 2023

15 unchanged sentences

May 2024 Placement Agent Warrants

September 2024 PIPE Series A Common Warrants

September 2024 PIPE Series B Common Warrants

September 2024 PIPE Placement Agent Warrants

Total warrants outstanding

23 unchanged sentences

Stock awards granted are exercisable over a maximum term of 10 years from the date of grant and generally vest over a period of four years for employees and one year for directors of the Company’s Board and consultants .

As of June 30, 2024, there remain 51,675 shares reserved for issuance under the 2021 Plan, as amended.

As of September 30, 2024, there remain 26,675 shares reserved for issuance under the 2021 Plan, as amended.

Fair Value Measurement

9 unchanged sentences

Expected Term.

The expected term represents the period that the Company’s stock-based awards are expected to be outstanding, which is calculated using the simplified method, as the Company has insufficient historical information to provide a basis for an estimate.

The expected term represents the period that the Company’s stock-based awards are expected to be outstanding, which is calculated using the simplified method for stock-based awards granted to employees, as the Company has insufficient historical information to provide a basis for an estimate.

The simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options.

As permitted under ASC 718, the Company has elected to use the contractual term as the expected term for certain non-employee awards, on an award-by-award basis.

The Company determines the price volatility based on the historical volatilities of industry peers as it has limited trading history for its Common Stock price.

4 unchanged sentences

The following table presents the weighted-average assumptions used for stock options granted during the following periods:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Grant date fair value

6 unchanged sentences

The following table summarizes the total stock-based compensation expense related to stock options included in the Company’s statements of operations:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

6 unchanged sentences

Options cancelled

Balance at June 30, 2024

Options exercisable at June 30, 2024

Balance at September 30, 2024

Options exercisable at September 30, 2024

In January 2024, the Board unanimously approved to provide employees and directors of the Company the opportunity to cancel outstanding, out-of-the-money, stock options without consideration, in accordance with an option cancellation agreement.

2 unchanged sentences

Accordingly, the Company recognized stock-based compensation expense of $ 568,372 resulting from the stock option cancellation during the first quarter of 2024.

The aggregate intrinsic value of options outstanding and exercisable as of June 30, 2024, is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s Common Stock on June 28, 2024, the last trading day prior to June 30, 2024, which was $ 2.39 per share.

The intrinsic value of options outstanding and exercisable as of June 30, 2024, was zero.

As of June 30, 2024, total unrecognized compensation cost related to stock options was approximately $ 0.2 million and the weighted average period over which this cost is expected to be recognized is 1.7 years.

The aggregate intrinsic value of options outstanding and exercisable as of September 30, 2024, is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s Common Stock on September 30, 2024, the last trading day prior to September 30, 2024, which was $ 1.64 per share.

The intrinsic value of options outstanding and exercisable as of September 30, 2024, was zero.

As of September 30, 2024, total unrecognized compensation cost related to stock options was approximately $ 0.2 million and the weighted average period over which this cost is expected to be recognized is 2.6 years.

Commitments and Contingencies

2 unchanged sentences

The total contract amount with the clinical research organization is approximately $ 7.0 million, which will extend from the fourth quarter of 2023 to the first half of 2025, and which has a 30-day termination notice period.

As of June 30, 2024, the Company has recognized $ 2.9 million in expense for the STAR-1 trial.

As of September 30, 2024, the Company has recognized $ 4.7 million in expense for the STAR-1 trial.

Supplier Agreement

13 unchanged sentences

The Second Amendment includes customary terms relating to, among others, indemnification, intellectual property protection, confidentiality, remedies, and warranties.

As of June 30, 2024, the Company evaluated the likelihood of the Company achieving the specified milestones and determined that the likelihood is not yet probable and as such no accrual of these payments is required as of June 30, 2024.

As of September 30, 2024, the Company evaluated the likelihood of the Company achieving the specified milestones and determined that the likelihood is not yet probable and as such no accrual of these payments is required as of September 30, 2024.

Legal Proceedings

2 unchanged sentences

Subsequent Events

During July 2024, the balance of 267,000 of abeyance shares related to the May 2024 Warrant Inducement were pulled by the investor.

In June 2024, the Company entered into an ATM Agreement with the maximum offering price of $ 1,157,761 .

During July 2024, the Company issued 355,806 shares of Common Stock under the ATM Agreement resulting in gross proceeds of $ 1,157,248 before deducting issuance costs.

After issuance of the 355,806 shares during July 2024, $ 513 remained registered under the ATM Agreement.

On August 2, 2024, the Company increased the maximum aggregate offering price of the shares of the Company’s common stock issuable under the ATM Agreement by $ 505,000 , from $ 1,157,761 to $ 1,662,761 .

Subsequent to September 30, 2024, the Company has issued 363,000 shares of Common Stock related to the exercise of the September 2024 Pre-Funded Warrants, leaving 1,382,000 of the September 2024 Pre-Funded Warrants outstanding.

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