Immuneering Corp 10-Q

Item 1. Financial Statements ​ IMMUNEERING CORPORATION ​ CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 December 31, 2020 ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 50,245,103 ​ $ 37,090,151 Accounts receivable ​ 495,105 ​ 500,110 Prepaids and other current assets ​ 696,684 ​ 140,958 Total current assets ​ 51,436,892 ​ 37,731,219 ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 82,077 ​ 64,363 Right-of-use asset, net ​ 562,770 ​ 613,103 Other assets ​ 960,386 ​ 14,333 Total assets ​ $ 53,042,125 ​ $ 38,423,018 ​ ​ ​ ​ ​ ​ ​ Liabilities, Convertible Preferred Stock and Stockholders' Deficit ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 1,432,516 ​ $ 1,480,537 Accrued expenses ​ 3,318,870 ​ 698,992 Lease liability, current ​ 80,605 ​ 76,322 Total current liabilities ​ 4,831,991 ​ 2,255,851 ​ ​ ​ ​ ​ ​ ​ Long-term liabilities: ​ ​ Lease liability, noncurrent ​ 503,213 ​ 544,767 Total liabilities ​ 5,335,204 ​ 2,800,618 Commitments and contingencies (Note 9) ​ ​ Convertible preferred stock: ​ ​ Series B preferred stock, $ 0.001 par value, 6,032,183 shares authorized, 6,032,145 and 3,619,292 shares issued and outstanding at June 30, 2021 and December 31, 2020 ​ 61,772,761 ​ 36,983,910 Series A preferred stock, $ 0.001 par value, 2,495,933 shares authorized, 2,495,933 shares issued and outstanding at June 30, 2021 and December 31, 2020 ​ 21,119,940 ​ 21,119,940 Total convertible preferred stock ​ 82,892,701 ​ 58,103,850 Stockholders’ deficit: ​ ​ Class A common stock, $ 0.001 par value, 22,026,200 shares authorized, 5,275,936 and 4,950,129 shares issued and outstanding at June 30, 2021 and December 31, 2020 ​ 5,276 ​ 4,950 Class B common stock, $ 0.001 par value, 6,032,183 shares authorized, 0 shares issued and outstanding at June 30, 2021 and December 31, 2020 ​ — ​ — Additional paid-in capital ​ 4,763,900 ​ 3,251,240 Accumulated deficit ​ ( 39,954,956 ) ​ ( 25,737,640 ) Total stockholders' deficit ​ ( 35,185,780 ) ​ ( 22,481,450 ) Total liabilities, convertible preferred stock and stockholders' deficit ​ $ 53,042,125 ​ $ 38,423,018 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ 7 Table of Contents ​ IMMUNEERING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 660,040 ​ $ 480,835 ​ $ 1,408,240 ​ $ 963,885 Cost of revenue ​ 318,601 ​ 237,062 ​ 727,763 ​ 492,089 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ 341,439 ​ 243,773 ​ 680,477 ​ 471,796 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ Research and development ​ 6,991,965 ​ 3,221,000 ​ 12,382,985 ​ 6,044,254 General and administrative ​ 1,340,398 ​ 629,403 ​ 2,524,422 ​ 1,273,412 Total operating expenses ​ 8,332,363 ​ 3,850,403 ​ 14,907,407 ​ 7,317,666 Loss from operations ​ ( 7,990,924 ) ​ ( 3,606,630 ) ​ ( 14,226,930 ) ​ ( 6,845,870 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ ​ ​ ​ Interest income ​ 3,259 ​ 2,468 ​ 9,614 ​ 40,988 Net loss ​ $ ( 7,987,665 ) ​ $ ( 3,604,162 ) ​ $ ( 14,217,316 ) ​ $ ( 6,804,882 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share attributable to common stockholders, basic and diluted ​ $ ( 1.61 ) ​ $ ( 0.73 ) ​ $ ( 2.87 ) ​ $ ( 1.37 ) Weighted-average common shares outstanding, basic and diluted ​ 4,954,553 ​ 4,950,129 ​ 4,952,352 ​ 4,950,129 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ 8 Table of Contents IMMUNEERING CORPORATION ​ CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible Preferred Stock ​ ​ Stockholders' Deficit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Series B ​ Series A ​ Convertible ​ ​ Class A Common Stock ​ Class B Common Stock ​ Paid-In ​ Accumulated ​ Stockholders' ​ Shares Amount Shares Amount Preferred Stock Shares Par Value Shares Par Value Capital Deficit Deficit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 — $ — ​ 1,966,043 ​ $ 16,611,832 ​ $ 16,611,832 ​ ​ 4,950,129 ​ $ 4,950 — $ — ​ $ 2,164,471 ​ $ ( 8,697,742 ) ​ $ ( 6,528,321 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Series A convertible preferred stock, net of issuance costs — ​ — ​ 529,890 ​ 4,508,108 ​ 4,508,108 ​ ​ — ​ — — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ ​ 272,143 ​ - ​ ​ 272,143 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ - ​ ​ ( 3,200,720 ) ​ ​ ( 3,200,720 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2020 — ​ — ​ 2,495,933 ​ 21,119,940 ​ 21,119,940 ​ ​ ​ 4,950,129 ​ 4,950 — ​ — ​ 2,436,614 ​ ( 11,898,462 ) ​ ( 9,456,898 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ 287,554 ​ — ​ 287,554 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ — ​ ( 3,604,162 ) ​ ( 3,604,162 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2020 — $ — ​ ​ 2,495,933 ​ $ 21,119,940 ​ $ 21,119,940 ​ ​ ​ 4,950,129 ​ $ 4,950 — $ — ​ $ 2,724,168 ​ $ ( 15,502,624 ) ​ $ ( 12,773,506 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible Preferred Stock ​ ​ Stockholders' Deficit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Series B ​ Series A ​ Convertible ​ ​ Class A Common Stock ​ Class B Common Stock ​ Paid-In ​ Accumulated ​ Stockholders' ​ ​ Shares Amount Shares Amount Preferred Stock Shares Par Value Shares Par Value Capital Deficit Deficit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2020 3,619,292 ​ $ 36,983,910 ​ 2,495,933 ​ $ 21,119,940 ​ $ 58,103,850 ​ ​ 4,950,129 ​ $ 4,950 — ​ $ — ​ $ 3,251,240 ​ $ ( 25,737,640 ) ​ $ ( 22,481,450 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ 182,225 ​ — ​ 182,225 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ — ​ ( 6,229,651 ) ​ ( 6,229,651 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2021 3,619,292 ​ 36,983,910 ​ 2,495,933 ​ 21,119,940 ​ 58,103,850 ​ ​ 4,950,129 ​ 4,950 — ​ — ​ 3,433,465 ​ ( 31,967,291 ) ​ ( 28,528,876 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Series B convertible preferred stock, net of issuance costs 2,412,853 ​ 24,788,851 ​ — ​ — ​ 24,788,851 ​ ​ — ​ — — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock upon exercise of stock options — ​ — ​ — ​ — ​ — ​ ​ 17,499 ​ 18 — ​ — ​ 52,609 ​ — ​ 52,627 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock upon exercise of warrants — ​ — ​ — ​ — ​ — ​ ​ 308,308 ​ 308 — ​ — ​ 926,817 ​ — ​ 927,125 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ 351,009 ​ — ​ 351,009 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ — ​ — ​ ​ — ​ — — ​ — ​ — ​ ( 7,987,665 ) ​ ( 7,987,665 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2021 6,032,145 ​ $ 61,772,761 ​ 2,495,933 ​ $ 21,119,940 ​ $ 82,892,701 ​ ​ 5,275,936 ​ $ 5,276 — ​ $ — ​ $ 4,763,900 ​ $ ( 39,954,956 ) ​ $ ( 35,185,780 ) ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ 9 Table of Contents ​ IMMUNEERING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2021 and 2020 (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 2020 ​ ​ ​ ​ ​ ​ ​ Cash flows from operating activities: ​ ​ Net loss ​ $ ( 14,217,316 ) ​ $ ( 6,804,882 ) Adjustment to reconcile to net loss to net cash used in operating activities: ​ ​ Depreciation expense ​ 18,674 ​ 11,223 Right-of-use asset amortization ​ 50,333 ​ 19,994 Stock based compensation expense ​ 533,234 ​ 559,697 Change in assets and liabilities: ​ ​ (Increase) decrease in: ​ ​ Accounts receivable ​ 5,005 ​ ( 90,020 ) Prepaid expenses and other current assets ​ ( 555,726 ) ​ ( 387,506 ) Other assets ​ ​ ( 946,053 ) ​ ​ — Increase (decrease) in: ​ ​ Accounts payable ​ ( 48,021 ) ​ 601,874 Accrued expenses ​ 2,619,878 ​ 427,933 Lease liability ​ ( 37,271 ) ​ ( 19,994 ) Net cash used in operating activities ​ ( 12,577,263 ) ​ ( 5,681,681 ) Cash flows from investing activities: ​ ​ Purchase of property and equipment ​ ( 36,388 ) ​ ( 9,754 ) Net cash used in investing activities ​ ( 36,388 ) ​ ( 9,754 ) Cash flows from financing activities: ​ ​ Proceeds from the issuance of Series A preferred stock, net of issuance costs ​ — ​ 998,306 Proceeds from the issuance of Series B preferred stock, net of issuance costs ​ 24,788,851 ​ — Proceeds from exercise of stock options ​ 52,627 ​ — Proceeds from exercise of warrants ​ 927,125 ​ — Net cash provided by financing activities ​ 25,768,603 ​ 998,306 Net increase (decrease) in cash and cash equivalents ​ 13,154,952 ​ ( 4,693,129 ) Cash and cash equivalents at beginning of period ​ 37,090,151 ​ 13,782,175 Cash and cash equivalents at end of period ​ $ 50,245,103 ​ $ 9,089,046 Supplemental disclosures of noncash information: ​ ​ Reclassification of liability for Series A preferred stock ​ $ — ​ $ 3,509,802 Deferred offering costs included in accounts payable and accrued expenses ​ $ 875,078 ​ $ — ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ 10 Table of Contents IMMUNEERING CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 – Organization and Nature of Business Immuneering Corporation, a Delaware corporation, (“Immuneering” or the “Company”) was incorporated in 2008. The Company is a biopharmaceutical company with an emerging pipeline focused on improving patient outcomes across a spectrum of debilitating oncologic and neurologic diseases by applying the Company’s deep knowledge of translational bioinformatics to every stage of the drug development process. The Company has more than a decade of experience in translational bioinformatics and generating insights into drug mechanisms of action and patient treatment responses. Building on this experience, the Company developed a disease agnostic platform that enables the Company to utilize human data, novel biology and chemistry, and translational planning to create and advance the Company’s wholly owned pipeline. On October 30, 2019, Immuneering formed a wholly owned subsidiary, Immuneering Securities Corporation (“ISC”), a Massachusetts securities corporation, for the sole purpose of buying, selling and holding securities on the Company’s behalf. Immuneering and ISC are collectively referred to as “the Company” throughout these consolidated financial statements. Since inception, the Company has devoted substantially all of its efforts to business planning, service revenue generation, research and development, recruiting management and technical staff, and raising capital. The Company has financed its operations through service revenues, the issuance of convertible debt and the sale of convertible preferred stock and common stock. The Company is subject to a number of inherent risks associated with any biotechnology company that has substantial expenditures for research and development. These risks include, but are not limited to, the need to obtain adequate additional funding, possible failure of clinical trials or other events demonstrating lack of clinical safety or efficacy of its product candidates, dependence on key personnel, reliance on third-party service providers for manufacturing drug product and conducting clinical trials, the ability to successfully secure its proprietary technology, and risks related to the regulatory approval and commercialization of a product candidate. There can be no assurance that the Company’s research and development program will be successful. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees, advisors, and consultants. On August 3, 2021, the Company completed its initial public offering (“IPO”) pursuant to which it issued and sold 8,625,000 shares of its Class A common stock, inclusive of 1,125,000 shares of its Class A common stock sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $ 120,318,750 , after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company, which are estimated to be $ 2,000,000 . Upon the closing of the IPO, all 8,528,078 shares of the Company’s convertible preferred stock then outstanding automatically converted into 11,939,281 shares of Class A common stock (see Note 11). ​ To date, the Company has funded its operations through service revenues, and with proceeds from the sale of its capital stock and convertible notes and, most recently, with proceeds from the IPO. The Company has incurred recurring losses over the past several years and as of June 30, 2021, the Company had an accumulated deficit of $ 39,954,956 . The Company expects to continue to generate operating losses for the foreseeable future. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurances that additional funding will be available on terms acceptable to the Company, or at all. If the Company is unable to raise additional funds when needed, it may be required to delay, reduce the scope of, or eliminate development programs, which may adversely affect its business and operations. Management considers that there are no conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern and estimates that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim consolidated financial statements. The full extent to which coronavirus (“COVID-19”) pandemic will directly or indirectly impact the Company’s business, results of operations and 11 Table of Contents financial condition, including expenses and research and development costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and its variants and the actions taken to contain or treat COVID-19 and its variants, as well as the economic impact on local, regional, national and international markets. The Company has considered potential impacts arising from the pandemic related to COVID-19 and its variants and is not presently aware of any events or circumstances that would require the Company to update its estimates, judgements or revise the carrying values of its assets or liabilities. ​ Note 2 - Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB sets generally accepted accounting principles (“GAAP”) to ensure the consolidated financial statements are consistently reported. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codifications (“ASC”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. There have been no material changes to the accounting policies of the Company as those set forth in Note 2 to the audited consolidated financial statements contained in the final prospectus, dated July 29, 2021, filed with the SEC on July 30, 2021 pursuant to Rule 424(b) relating to our Registration Statement on Form S-1 (File No. 333-257791) (the “Prospectus”). Unaudited Interim Financial Information The unaudited interim consolidated financial statements of the Company have been prepared, without audit, in accordance with GAAP and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from the unaudited interim consolidated financial statements, as is permitted by such rules and regulations. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2020. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, operating results and cash flows. Revenues and net loss for any interim period are not necessarily indicative of future or annual results. 12 Table of Contents Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds from the offering, either as a reduction of the carrying value of the preferred stock or in stockholder’s equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs would be expensed immediately as a charge to operating expenses in the statements of operations and comprehensive loss. There were no deferred offering costs as of December 31,2020. As of June 30, 2021, deferred offering costs of $ 946,053 related to the IPO were recorded in the Company’s consolidated balance sheets. Stock Split On July 23, 2021, the Company approved a one -for-1.4 stock split which was consummated in connection with the Company’s IPO. All information in the accompanying financial statements and notes thereto regarding share amounts of common stock, price per share of common stock and the conversion factor for Series A and Series B Preferred Stock into common stock have been adjusted to reflect the application of the stock split on a retroactive basis. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting periods. These estimates and assumptions are based on current facts, historical experience and various other factors believe to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets liabilities and the recording of expenses that are not readily apparent from other sources. Significant estimates reflected in these consolidated financial statements included but are not limited to, the research and development expenses, determination of fair value of stock-based awards, the valuation of common stock, and the right-to-use assets and operating lease liability. Actual results may differ materially and adversely from these estimates. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (Jobs Act). The Jobs Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to avail itself of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements. The new standard, as amended, requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. It also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The targeted transition relief standard allows filers an option to irrevocably elect the fair value option of ASC 825-10, Financial Instruments-Overall, applied on an instrument-by-instrument basis for eligible instruments. ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) will become effective for the Company on January 1, 2023. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in the existing guidance for income taxes and making other minor improvements. The amendments are effective for annual 13 Table of Contents reporting periods beginning after December 15, 2020 with early adoption permitted. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements. ​ Note 3 – Property and Equipment, net Property and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ Computer equipment ​ $ 210,705 ​ $ 174,317 Furniture and fixtures ​ 18,798 ​ 18,798 Total ​ 229,503 ​ 193,115 Accumulated depreciation ​ ( 147,426 ) ​ ( 128,752 ) Property and equipment, net ​ $ 82,077 ​ $ 64,363 ​ Depreciation expense totaled $ 9,807 and $ 5,916 for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense totaled $ 18,674 and $ 11,223 for the six months ended June 30, 2021 and 2020, respectively. Note 4 – Accrued Expenses Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ Accrued professional services ​ $ 1,110,157 ​ $ 269,302 Accrued employee expenses ​ 1,685,293 ​ 163,668 Accrued contract research expenses ​ 523,420 ​ 266,022 Total ​ $ 3,318,870 ​ $ 698,992 ​ ​ ​ Note 5 – Convertible Preferred Stock Series A Preferred Stock In September 2019, the Company authorized the sale and issuance of up to 1,987,979 shares of Series A Preferred Stock, $ 0.001 par value per share, at an original issuance price of $ 8.5514 per share. In January 2020, the number of shares authorized for the Series A Preferred Stock was increased to 2,495,933 shares. The Series A Preferred Stock financing was structured to be issued in rolling closes during 2019 and 2020. On September 20, 2019, the Company issued an additional 1,122,458 shares of Series A Preferred Stock for gross cash proceeds of $ 9,598,847 and issued 785,706 shares of Series A Preferred Stock in conjunction with the conversion of the outstanding amount of the Convertible Notes. In 2019, the Company incurred issuance costs of $ 200,587 in connection with this offering. The Company received funds for issuance of an additional 468,315 shares of Series A Preferred Stock for gross cash proceeds of $ 4,004,975 through December 31, 2019. Of these shares, 410,436 shares of Series A Preferred Stock for gross cash proceeds of $ 3,509,802 exceeded the authorized amount allowed by the articles of incorporation, resulting in a liability of $ 3,509,802 and a total of 1,966,043 shares of Series A Preferred Stock outstanding at December 31, 2019. In January 2020, the shares that were previously classified as a liability as of December 31, 2019 were reclassified to temporary equity upon the approved increase to authorized shares of Series A Preferred Stock. 14 Table of Contents In January 2020, the Company issued 119,454 additional shares of Series A Preferred Stock for gross cash proceeds of $ 1,021,413 . The Company incurred issuance costs of $ 23,610 in connection with the financing in January 2020. Series B Preferred Stock In December 2020, the Company authorized the sale and issuance of up to 6,032,183 shares of Series B Preferred Stock, $ 0.001 par value per share, at an original issuance price of $ 10.2782 per share. The Series B Preferred Stock financing was structured to close in two tranches. The first tranche closed in December 2020 and the Company issued 3,619,292 shares of Series B Preferred Stock for gross cash proceeds of $ 37,199,929 . The Company incurred issuance costs of $ 216,019 in connection with the financing in December 2020. The Company determined the right of the investors to purchase 2,412,853 shares of Series B Preferred Stock in the second tranche does not meet the definition of a freestanding financial instrument as it is not separable from the Series B Preferred Stock issued in the first tranche. The issuance of the second tranche is subject to the Company meeting certain development milestones or at the election of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock which must include one specific shareholder (the “Requisite Holders”). Each holder of Series B Preferred Stock may elect to purchase their requisite shares of the second tranche at any time. As of March 31, 2021, the Company has not met these development milestones nor did the Requisite Holders elect to purchase the second tranche prior to meeting these milestones and therefore no shares of the second tranche were issued. In April and May 2021, all 2,412,853 shares of the second tranche of Series B Preferred Stock were issued based on the voluntary election of substantially all of the holders of Series B Preferred Stock. The Company received gross proceeds of $ 24,799,786 . The Company incurred issuance costs of $ 10,935 in connection with the second tranche of Series B Preferred Stock. As of June 30, 2021, the rights and preferences of the Series A Preferred Stock and Series B Preferred Stock (“Preferred Stock”) are as follows: Conversion Each share of Preferred Stock may be converted at any time, at the option of the holder, into shares of Class A common stock, subject to the applicable conversion rate as determined by dividing the original issue price by the conversion price. The conversion price for the Series A Preferred Stock and Series B Preferred Stock (as may be adjusted for certain customary dilutive events) is $ 6.1081 and $ 7.3416 , respectively. The Preferred Stock automatically convert into shares of Class A common stock at the then effective conversion rate upon the closing of a public offering of the Company’s securities with gross proceeds to the Company of at least $ 75,000,000 and a share price of at least $ 7.3416 or at the election of the holders of the Requisite Holders. Holders of Series B Preferred Stock that would beneficially own at least 9.9 % of any then outstanding class of equity securities may elect to receive a portion of their converted Series B Preferred Stock as Class B common stock upon conversion. Upon the closing of the IPO on August 3, 2021, all 8,528,078 shares of the Company’s convertible preferred stock then outstanding automatically converted into 11,939,281 shares of Class A common stock (see Note 11). Dividends Preferred Stockholders are entitled to receive per annum dividends of 7 % of the original issue price share, payable only when, as and if declared by the Board of Directors. The right to receive these dividends is not cumulative, and therefore, if not declared in any year, the right to receive such dividends shall terminate and not carry forward into the next year. As of June 30, 2021 and December 31, 2020, no dividends had been declared. 15 Table of Contents Voting Rights Preferred Stock and common stock vote together as one class on an as converted basis. Common stock voting rights on certain matters are subject to the powers, preferences, and rights of the Preferred Stock. Preferred Stockholders are entitled to vote on all matters and shall have the number of votes equal to the number of shares of common stock into which the shares of Preferred Stock held by such holder are then convertible. As long as 2,132,029 shares of Preferred Stock are outstanding, certain actions such as mergers, acquisition, liquidation, dissolution, wind up of business, and deemed liquidation events, must be approved by the holders of at least a majority of the then-outstanding shares of Preferred Stock. Liquidation Preference Upon liquidation, dissolution, or winding up of business, holders of Preferred Stock are entitled to receive a liquidation preference in priority to holders of common stock at the original respective Preferred Stock issue price for such series. If assets available for distribution are insufficient to satisfy the liquidation payment to holders of Preferred Stock in full, assets available for distribution will be allocated among holders of Preferred Stock on a pari passu basis at an amount per share equal to the greater of the respective original Preferred Stock issue price for such series plus any declared but unpaid dividends or such amount had all shares been converted to common stock. When holders of Preferred Stock are satisfied in full, any excess assets available for distribution will be allocated ratably among common stock holders based on their pro rata shareholdings. Upon a deemed liquidation event, as defined in the articles of incorporation, holders have the option to redeem their shares at the liquidation payment amounts summarized above. Redemption Other than described above, the shares of Preferred Stock are not redeemable. Note 6 - Common Stock As of June 30, 2021 and December 31, 2020, the Company has 22,026,200 authorized shares of Class A common stock, $ 0.001 par value per share, of which 5,275,936 and 4,950,129 are issued and outstanding , respectively. The holders of Class A common stock are entitled one vote for each share of common stock. Dividends may be paid when, and if declared by the Board of Directors, subject to the limitations, powers and preferences granted to the Preferred Stockholders and on a proportionate basis with holders of Class B common stock. As of June 30, 2021 and December 31, 2020, the following number of shares of Class A common stock have been reserved: ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ Conversion of Series A Preferred 3,494,284 3,494,284 Conversion of Series B Preferred 8,444,997 5,066,995 Exercise of common stock warrants — 308,308 Exercise of common stock options 2,668,327 1,801,263 ​ 14,607,608 10,670,850 ​ As of June 30, 2021 and December 31, 2020, the Company has 6,032,183 authorized shares of Class B common stock, $ 0.001 par value per share, of which no shares have been issued nor are outstanding. The holders of Class B common stock have no voting rights. Dividends may be paid when, and if, declared by the Board of Directors, subject to the limitations, powers and preferences granted to the preferred stockholders and on a proportionate basis with holders of Class A common stock. 16 Table of Contents Common Stock Warrants During 2019, the Company issued warrants to purchase an aggregate of 308,308 shares of Class A common stock at an exercise price of $ 3.01 per share to several advisors, including 200,984 shares to entities related to members of the Board of Directors of the Company, in lieu of cash payments. These warrants vested immediately upon issuance, became exercisable on January 9, 2021 and have a 10-year term set to expire on January 9, 2030. The Company evaluated the terms of these warrants and determined that equity classification was appropriate. As of December 31, 2020, no warrants had been exercised. During June 2021, all warrant holders exercised their warrants to purchase an aggregate of 308,308 shares of common stock. As of June 30, 2021, there were no warrants outstanding. Note 7 - Net Loss Per Share Attributable to Common Stockholders Net loss per share of common stock is computed using the two-class method required for multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period has been distributed. The rights, including the liquidation and dividend rights and sharing of losses, of the Class A and Class B common stock are identical, other than voting rights. As the liquidation and dividend rights and sharing of losses are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share attributed to common stockholders is therefore the same for Class A and Class B common stock on an individual or combined basis. The Company’s participating securities include the Company’s Preferred Stock, as the holders are entitled to receive noncumulative dividends in the event that a dividend is paid on common stock. The holders of Preferred Stock do not have a contractual obligation to share in losses of the Company, and therefore during periods of loss there is no allocation required under the two-class method. Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase. Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. The Company has reported net losses for all periods presented, therefore diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Basic and diluted net loss per share attributable to common stockholders was calculated at June 30, 2021 and 2020 as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Six Months Ended June 30, ​ ​ 2021 2020 ​ 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Numerator: ​ ​ ​ ​ Net loss ​ $ ( 7,987,665 ) ​ $ ( 3,604,162 ) ​ $ ( 14,217,316 ) ​ $ ( 6,804,882 ) Denominator - basic and diluted: ​ ​ ​ ​ Weighted-average common shares outstanding, basic and diluted ​ 4,954,553 ​ 4,950,129 ​ 4,952,352 ​ 4,950,129 Net loss per share - basic and diluted ​ $ ( 1.61 ) ​ $ ( 0.73 ) ​ $ ( 2.87 ) ​ $ ( 1.37 ) ​ 17 Table of Contents The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares) at June 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ 2021 2020 ​ ​ ​ ​ ​ Series A Preferred 3,494,284 3,494,306 Series B Preferred 8,444,997 — Warrants to purchase common stock — 308,308 Options to purchase common stock 2,668,327 1,766,234 Total shares of common stock equivalents 14,607,608 5,568,848 ​ ​ Note 8 – Stock-Based Compensation During 2015, the Company established the Long Term Incentive Plan (“Incentive Plan”), under which incentive stock options, nonqualified stock options, restricted stock or other awards may be awarded to employees, directors or consultants of the Company. The options typically vest over a four-year period. As of June 30, 2021, the maximum number of shares available for issuance under the Incentive Plan was 2,825,173 shares. As of June 30, 2021, the number of shares available for future grants under the Incentive Plan was 137,947 shares. However, from and after the effectiveness of the Company’s 2021 Incentive Award Plan, no additional awards will be granted under the Incentive Plan. During the three and six months ended June 30, 2021, the Company recognized stock-based compensation expense of $ 351,009 and $ 533,234 , respectively. During the three and six months ended June 30, 2020, the Company recognized stock-based compensation expense of $ 287,554 and $ 559,697 , respectively As of June 30, 2021, compensation expense remaining to be recognized for outstanding stock options was $ 6,765,850 and to be recognized over a weighted-average period of 2.4 years. The fair value of options granted is calculated on the grant date using the Black-Scholes option valuation model. For the six months ended June 30, 2021, the Company granted 1,160,894 shares of stock options at a weighted-average grant date fair value of $ 8.66 . For the six months ended June 30, 2020, the Company granted 285,740 shares at a weighted-average grant date fair value of $ 3.01 . The Company used the following assumptions in its application of the Black-Scholes option pricing model for grants during the six months ended June 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2021 2020 ​ ​ ​ ​ ​ Weighted-average risk-free interest rate ​ 1.04 % - 1.71 % ​ 1.21 % Expected term (in years) ​ 5.83 - 10 years ​ 6.01 years Expected dividend yield ​ 0 % ​ 0 % Expected volatility ​ 68.92 % - 80.99 % 67.30 % ​ 18 Table of Contents The following table summarizes the stock option activity during the six months ended June 30, 2021 under the Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ ​ ​ ​ ​ Number of ​ Exercise Price ​ Contractual ​ Aggregate ​ ​ Options ​ per Share Term (in Years) ​ Intrinsic Value ​ ​ ​ Outstanding at of December 31, 2020 1,801,263 ​ $ 3.01 8.37 ​ Granted 1,160,894 ​ $ 8.66 ​ ​ ​ Exercised ( 17,499 ) ​ $ 3.01 ​ ​ ​ Cancelled ( 276,331 ) ​ $ 3.58 ​ ​ ​ Outstanding at June 30, 2021 2,668,327 ​ $ 5.41 ​ 8.61 ​ $ 11,548,289 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and exercisable at June 30, 2021 1,059,428 ​ $ 3.01 7.51 ​ $ 7,128,724 Vested and expected to vest at June 30, 2021 ​ 2,668,327 ​ $ 5.41 8.61 ​ $ 11,548,289 ​ For the three and six months ended June 30, 2021 and 2020, the Company recognized share-based compensation expense recognized on the accompanying condensed consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2021 2020 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue ​ $ 22,367 ​ $ 27,641 ​ $ 44,882 ​ $ 52,558 Research and development ​ 168,725 ​ 131,182 ​ 222,732 ​ 262,364 General and administrative ​ 159,917 ​ 128,731 ​ 265,620 ​ 244,775 Total ​ $ 351,009 ​ $ 287,554 ​ $ 533,234 ​ $ 559,697 ​ ​ ​ Note 9 – Commitments and Contingencies Operating Leases The Company leases office space in Cambridge, Massachusetts, New York, New York and as of July 2021, San Francisco, California, pursuant to short-term arrangements. The Cambridge and San Francisco leases are on a month-to-month basis, requiring one month’s notice before termination. The New York lease is renewable on a quarterly basis and the last renewal was on June 15, 2021 which extended the lease term until September 30, 2021. These lease agreements include payments for lease and non-lease components and the Company has elected to not separate such components and these payments were recognized as rent expense. As of June 30, 2021, total future minimum lease payments for its short-term leases in Cambridge, Massachusetts, New York, New York and San Francisco, California was $ 26,040 due in 2021 and $ 11,040 due in 2022. The Company leases storage space for its electronic data equipment in Somerville, Massachusetts. This lease is renewable on an annual basis effective every March 1st. Prior to June 30, 2021, the Company renewed the lease through March 31, 2022. As of June 30, 2021, total future minimum lease payments for this lease were $ 10,708 due in 2021 and $ 3,569 due in 2022. In July 2019, the Company entered into an office lease in San Diego, California (“2019 San Diego Lease”) with a lease term of 24 months with no escalations and variable costs based on additional number of employees using the facility. This lease was cancelable upon a 30-day notice period. Upon adoption of ASC 842 on January 1, 2020, a right-to-use asset and lease liability based on the fixed costs was recognized by the Company for $ 61,822 . Effective September 20, 2020, the lease was terminated, and the remaining right-of-use asset and lease liability were derecognized. No gain or loss was recognized for the termination of this lease. In October 2020, the Company entered into an office lease in San Diego, California (“2020 San Diego Lease”) with a lease term of 67 months . At the lease commencement date, a right-to-use asset and lease liability was recognized by the Company for $ 637,863 . 19 Table of Contents Maturities of the lease liabilities due under the Company’s 2020 San Diego Lease as of June 30, 2021 are as follows: ​ ​ ​ ​ ​ ​ Amount Remainder of 2021 ​ $ 56,087 2022 ​ 115,430 2023 ​ 125,741 2024 ​ 161,498 2025 ​ 167,150 2026 ​ 57,332 Total future lease payments ​ 683,238 Less: Imputed interest ​ ( 99,420 ) Total lease liabilities ​ $ 583,818 Current portion lease liability ​ $ 80,605 Lease liability, noncurrent ​ 503,213 Total lease liability ​ $ 583,818 ​ Quantitative information regarding the Company’s leases for the six months ended June 30, 2021 and 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, ​ ​ 2021 ​ 2020 ​ Lease costs: ​ ​ ​ ​ ​ Operating lease cost ​ $ 68,502 ​ $ 21,600 Short-term lease cost ​ 117,352 ​ 138,995 Variable lease cost ​ — ​ 8,200 Total lease costs ​ $ 185,854 ​ $ 168,795 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ Operating cash flows from operating leases ​ $ 55,440 ​ $ 21,600 Operating cash flows from short-term leases ​ 117,352 ​ 138,995 ​ ​ $ 172,792 ​ $ 160,595 ​ Weighted-average remaining lease term - operating leases ​ 4.83 years 5.83 years Weighted-average discount rate - operating leases ​ 6.0 % 6.0 % ​ As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Litigation From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities and may be exposed to litigation in connection with its products and operations. The Company’s policy is to assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. When it is probable that future expenditures will be made and can be reasonably estimated the Company will accrue a liability for such matters. Significant judgement is required to determine both probability and estimated amount. The Company is not aware of any material legal matters. Clinical Research Contracts The Company may enter into contracts in the normal course of business with clinical research organizations for clinical trials, with contract manufacturing organizations for clinical supplies, and with other vendors for preclinical studies, supplies and other services for our operating purposes. These contracts generally provide for termination with a 30-day notice. 20 Table of Contents Note 10 – Related Party Transactions An officer of the Company is a board member of a contract research organization (“CRO”) that provides contract services to the Company. Research and development expenses in the accompanying condensed consolidated statement of operations include the cost of services provided by the CRO to the Company which amounted to $ 2,096,425 and $ 1,212,433 for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, $ 352,642 and $ 279,153 , respectively, was owed to the CRO and is included in accounts payable or accrued contract research expenses in the accompanying consolidated balance sheets. Note 11 – Subsequent Events Initial Public Offering On August 3, 2021, the Company completed its IPO, pursuant to which it issued and sold 8,625,000 shares of its Class A common stock, inclusive of 1,125,000 shares of its Class A common stock sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were approximately $ 120,318,750 , after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company, which are estimated to be $ 2,000,000 . Upon the closing of the IPO, all of the 8,528,078 shares of the Company’s convertible preferred stock then outstanding automatically converted into 11,939,281 shares of Class A common stock. Upon the conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock (at par value) and additional paid-in capital. ​ Increase in Authorized Number of Shares of Common Stock and Changes in Authorized Preferred Stock On July 23, 2021, in connection with the closing of the IPO, the Company filed a restated certificate of incorporation, which amended and restated the Company’s certificate of incorporation to, among other things: (i) increase the number of authorized shares of common stock to 200,000,000 shares of Class A common stock, 20,000,000 shares of Class B common stock, par value $ 0.001 per share (the “Class B Common Stock”), and (ii) authorize 10,000,000 shares of Preferred Stock; and (iii) authorize the Board to establish the rights, preferences and restrictions on any unissued series of Preferred Stock. 2021 Incentive Award Plan ​ On July 23, 2021, the Company’s board of directors adopted, and on July 23, 2021 its stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), which became effective on July 29, 2021. The 2021 Plan provides for the grant of incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The number of shares reserved for issuance under the 2021 Plan is initially equal to 2,590,000 plus an annual increase on the first day of each calendar year, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 4 % of the aggregate number of shares of Class A common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as determined by the Board of Directors. No more than 15,350,000 shares of Class A common stock may be issued under the 2021 Plan upon the exercise of incentive stock options. Shares issued under the 2021 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares. If an award under the 2021 Plan expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, cancelled without having been fully exercised/settled or forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the 2021 Plan. In addition, shares subject to stock options issued under the Incentive Plan may become available for issuance under the 2021 Plan to the extent such stock options are canceled, forfeited, exchanged, settled in cash or otherwise terminated. ​ 2021 Employee Stock Purchase Plan ​ On July 23, 2021, the Company’s board of directors adopted, and on July 23, 2021 its stockholders approved, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective on July 29, 2021. A total of 250,000 21 Table of Contents shares of Class A common stock were initially reserved for issuance under this plan. The number of shares of Class A common stock that may be issued under the 2021 ESPP will automatically increase on the first day of each calendar year, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 1 % of the shares of Class A common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as determined by the board of directors, provided that not more than 3,340,000 shares of Class A common stock may be issued under the 2021 ESPP. ​ 22 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our final prospectus for our initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, or the Securities Act, with the Securities and Exchange Commission, or SEC, on July 30, 2021 (the “Prospectus”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview We are a biopharmaceutical company with an emerging pipeline focused on improving patient outcomes across a spectrum of debilitating oncologic and neurologic diseases by applying our deep knowledge of translational bioinformatics to every stage of the drug development process. We have more than a decade of experience in translational bioinformatics and generating insights into drug mechanisms of action and patient treatment responses. Building on this experience, we developed a disease agnostic platform that enables us to utilize human data, novel biology and chemistry, and translational planning to create and advance our wholly owned pipeline. Our current development programs in oncology are focused on providing treatments for patients with solid tumors caused by mutations of the RAS/RAF/MEK/ERK pathway and other oncologic signaling pathways. Our lead product candidate, IMM-1-104, is designed to be a highly selective dual-MEK inhibitor that further disrupts the kinase suppressor of RAS 1 and 2 for the treatment of advanced solid tumors in patients harboring RAS mutant tumors. We plan to submit an Investigational New Drug, or IND, for IMM-1-104 to the U.S. Food and Drug Administration, or the FDA, in the first quarter of 2022. In addition, we anticipate filing at least two additional INDs for our other oncology programs, one in each of 2023 and 2024. For the period from inception through 2017, we devoted substantially all of our efforts to business planning, service revenue generation, developing tools to aid in drug discovery, and recruiting management and technical staff. Since 2018, we have also focused significant effort on our own internal research and development programs. We have financed our operations through service revenues, the issuance of convertible debt and the sale of convertible preferred stock and common stock. Our operations have been financed primarily by service revenues and aggregate net proceeds of approximately $81.4 million from the issuance of convertible notes payable, convertible preferred stock including gross proceeds of approximately $24.8 million from the issuance of shares in the second tranche of Series B Preferred in April and May 2021, common stock, exercise of stock options and most recently, with proceeds from our completed initial public offering (“IPO”). On August 3, 2021, we completed our IPO pursuant to which we issued and sold 8,625,000 shares of Class A common stock, inclusive of 1,125,000 shares sold by us pursuant to the full exercise of the underwriters’ option to purchase additional shares. We received aggregate net proceeds of approximately $120.3 million from the IPO, after deducting underwriting discounts and commissions, but before deducting offering costs payable by us, which are estimated to be $2.0 million. Since inception, we have had significant annual operating losses. Our net loss was approximately $14.2 million, for the six months ended June 30, 2021 and $17 million for the year ended December 31, 2020. As of June 30, 2021, we had an accumulated deficit of approximately $40.0 million and approximately $50.2 million in cash and cash equivalents. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our internally developed product candidates as well as add operational, financial and management 23 Table of Contents informational systems and personnel to support our product development as well as support our transition to a public company. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. Based upon our current business plans, we believe that our existing cash and cash equivalents, inclusive of the net proceeds from the IPO, will be sufficient to fund our development activities and other operations into 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured. We have not had any internally developed products approved for sale. We do not expect to generate any product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our internally developed product candidates. If we obtain regulatory approval for any of our internally developed product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through service revenue, equity offerings, debt financings or other capital sources, including collaborations, licenses or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. In particular, the ongoing pandemic related to COVID-19 and its variants has resulted in federal, state and local governments and private entities mandating various restrictions, including travel restrictions, access restrictions, restrictions on public gatherings, and stay at home orders. The effect of these orders, government imposed quarantines and measures we have taken, such as implementing work-at-home policies, may negatively impact productivity, disrupt our business and/or could adversely affect our development plans and results. We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including personnel at third-party manufacturing facilities and other third parties with whom we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timeline presently planned could be materially and adversely impacted. It is unknown how long these conditions will last and what the complete effect will be on us. While to date we have been able to continue to execute our overall business plan, some of our business activities have been slowed and taken longer to complete, particularly with respect to our process for recruiting new employees, and we continue to adjust to the challenges of operating in a largely remote setting with our employees. Overall, we recognize the challenges the pandemic may pose to our business, will continue to closely monitor events as they develop and plan for alternative and mitigating measures that we can implement if needed. Components of Our Results of Operations Revenue Our revenue is generated by providing computational biology professional services to pharmaceutical and biotechnology companies. We charge an agreed upon rate per hour based on the aggregate level of personnel assigned to work on the project or a fixed fee for a defined scope of work. Our contracts specify the period of time over which these professional services will be provided. We recognize revenue over time by measuring the progress toward complete satisfaction of the performance obligation using a single method of measuring progress, which depicts the performance in transferring control of the associated services to the customer. We use input methods to measure the progress toward the complete satisfaction of performance obligations and evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment. 24 Table of Contents We expect revenue to remain similar to prior years in the near-term as we continue to provide services to our existing customers and these revenues could decrease as we have deprioritized new services work in order to focus on developing our wholly owned pipeline. Cost of Revenue Our cost of revenue expenses consists primarily of costs related to providing professional services to our customers. These costs include salaries, bonuses, benefits, and equity-based compensation expense, depreciation, facilities, and other outside services. Operating Expenses Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses. Research and Development Research and development expenses account for a significant portion of our operating expenses. Our research and development expenses consist primarily of direct and indirect costs incurred in connection with the development of our research platform, product candidates, discovery efforts and preclinical studies related to our program pipeline. Our direct costs include: ● expenses incurred under agreements with CROs and other vendors that conduct our preclinical activities on our behalf; including laboratory expenses related to the execution of preclinical studies on our behalf; ● expenses associated with the manufacturing of our product candidates and preclinical material, including fees paid to contract manufacturers; and ● consulting fees and expenses related to preparation of initiation of clinical trials Our indirect costs include: ● personnel-related expenses, consisting of employee salaries, bonuses, benefits and equity-based compensation expense and recruiting costs for personnel engaged in research and development activities; and ● facility and equipment related expenses, consisting of indirect and allocated expenses for rent, depreciation, maintenance of facilities, insurance, and other supplies. We expense research and development costs as incurred. Our direct research and development expenses are not currently tracked on a program-by-program basis, but we anticipate tracking costs on a program-by-program basis at the time IMM-1-104 enters clinical trials, which we expect to occur in the first half of 2022. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates. Due to the inherently unpredictable nature and numerous risks and uncertainties associated with product development and the current stage of development of our product candidates and programs, we cannot reasonably estimate or know the nature, timing and estimated costs necessary to complete the remainder of the development of our product candidates or programs. We are also unable to predict if, when, or to what extent we will obtain approval and generate revenues from the commercialization and sale of any of our product candidates. The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, such as: ● successful completion of preclinical studies and initiation of clinical trials for future product candidates; ● successful enrollment and completion of clinical trials for our current product candidates; 25 Table of Contents ● data from our clinical programs that support an acceptable risk-benefit profile of our product candidates in the intended patient populations; ● acceptance by the FDA or other applicable regulatory agencies of IND applications, clinical trial applications and/or other regulatory filings for our product candidates; ● expansion and maintenance of a workforce of experienced scientists and others to continue to develop our product candidates; ● successful application for and receipt of marketing approvals from applicable regulatory authorities; ● obtainment and maintenance of intellectual property protection and regulatory exclusivity for our product candidates; ● making of arrangements with contract manufacturing organizations for, or establishment of, commercial manufacturing capabilities; ● establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; ● acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors; ● effective competition with other therapies; ● obtainment and maintenance of coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors; ● maintenance, enforcement, defense and protection of our rights in our intellectual property portfolio; ● avoidance of infringement, misappropriation or other violations with respect to others ’ intellectual property or proprietary rights; and ● maintenance of a continued acceptable safety profile of our products following receipt of any marketing approvals. A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors. We may never succeed in achieving regulatory approval for any of our product candidates. Further, a number of factors, including those outside of our control, could adversely impact the timing and duration of our product candidates’ development, which could increase our research and development expense. We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development. We expect that our research and development expenses will substantially increase for the foreseeable future as we continue to implement our business strategy, which includes advancing our product candidates through clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development. As of the date of this prospectus, we cannot reasonably determine or accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. 26 Table of Contents General and Administrative Our general and administrative expenses consist primarily of personnel-related expenses, including employee salaries, bonuses, benefits, equity-based compensation, and recruiting costs for personnel in executive, finance, and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services, insurance costs, travel expenses and facility related expenses not otherwise included in research and development expenses. We expect our general and administrative expenses will substantially increase for the foreseeable future as we continue to increase our general and administrative headcount to support our continued research and development activities and, if any product candidates receive marketing approval, commercialization activities, as well as to support our operations generally. As we expand our operations, we also expect to incur increased expenses associated with operating as a public company, including costs related to accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and rules and regulations of the SEC, Sarbanes-Oxley Act, director and officer insurance costs, and investor and public relations costs. Other Income (Expense), Net Other income (expense), net consists primarily of interest income earned on our cash and cash equivalents carried at fair value, and interest expense related to the conversion of notes payable and a loss on the extinguishment of the convertible note. Results of Operations Comparison of the Three Months Ended June 30, 2021 and 2020 The following table summarizes our results of operations for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2021 2020 $ % ​ ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 660 ​ $ 481 ​ $ 179 ​ 37 % Cost of revenue ​ 319 ​ 237 ​ 82 ​ 35 % Gross profit ​ 341 ​ 244 ​ 98 ​ 40 % Operating expenses ​ ​ ​ ​ ​ Research and development ​ 6,992 ​ 3,221 ​ 3,771 ​ 117 % General and administrative ​ 1,340 ​ 629 ​ 711 ​ 113 % Total operating expenses ​ 8,332 ​ 3,850 ​ 4,482 ​ 116 % Loss from operations ​ (7,991) ​ (3,607) ​ (4,384) ​ 122 % Other income ​ ​ ​ ​ ​ Interest income ​ 3 ​ 2 ​ 1 ​ 50 % Net loss ​ $ (7,988) ​ $ (3,604) ​ ​ ​ ​ ​ Revenue The following table summarizes the revenue recognized for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ 2021 2020 $ % ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 660 ​ $ 481 ​ $ 179 ​ 37 % ​ 27 Table of Contents Revenue increased by approximately $0.2 million, or 37%, to approximately $0.7 million for the three months ended June 30, 2021 compared to approximately $0.5 million for the three months ended June 30, 2020. The increase in revenue was due to an increase of approximately $0.3 million of revenue from new customers in 2021 and, growth in existing customers of $0.1 million which was partially offset by approximately $0.2 million decrease due to customer agreements that were completed in 2020. Cost of Revenue The following table summarizes the components of cost of revenue expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2021 2020 $ % ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee related costs ​ $ 285 ​ $ 194 ​ $ 91 ​ 46.9 % Equity-based compensation expense ​ 22 ​ 28 ​ (6) ​ (21.4) % Facilities and other allocated expenses ​ 11 ​ 14 ​ (3) ​ (21.4) % Depreciation ​ 1 ​ 1 ​ — ​ — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue ​ $ 319 ​ $ 237 ​ $ 82 ​ 34.6 % ​ Cost of revenue increased by approximately $0.1 million, or 34.6%, to approximately $0.3 million for the three months ended June 30, 2021 compared to approximately $0.2 million for the three months June 30, 2020. The increase was primarily due to increased employee related costs of approximately $0.1 million, partially offset by a decrease in equity-based compensation and facilities. Research and Development The following table summarizes the components of our research and development expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ 2021 2020 $ % ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee related costs ​ $ 2,053 ​ $ 1,237 ​ $ 816 ​ 66.0 % Equity-based compensation expense ​ 160 ​ 129 ​ 31 ​ 24.0 % Outside contract research services ​ 4,658 ​ 1,775 ​ 2,883 ​ 162.4 % Facilities and other allocated expenses ​ 112 ​ 75 ​ 37 ​ 49.3 % Depreciation ​ 9 ​ 5 ​ 4 ​ 80.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total research and development ​ $ 6,992 ​ $ 3,221 ​ $ 3,771 ​ 117.1 % ​ Research and development expenses increased by approximately $3.8 million, or 117.0%, to approximately $7.0 million for the three months ended June 30, 2021 as compared to approximately $3.2 million for the three months ended June 30, 2020. The increase of approximately $3.8 million was primarily due to approximately $2.9 million of outside contract research services for our preclinical candidates due to an increased number of discovery programs and increased spending on later stage preclinical efforts. The increase also includes approximately $0.8 million of additional employee related costs, primarily due to an increase in headcount. 28 Table of Contents General and Administrative The following table summarizes the components of our general and administrative expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2021 2020 $ % ​ ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee related costs ​ $ 565 ​ $ 227 ​ $ 338 ​ 148.9 % Equity-based compensation expense ​ 169 ​ 131 ​ 38 ​ 29.0 % Professional fees ​ 474 ​ 205 ​ 269 ​ 131.2 % Public relations ​ 99 ​ 49 ​ 50 ​ 102.0 % Outside consultants ​ 8 ​ 5 ​ 3 ​ 60.0 % Facilities and other allocated expenses ​ 11 ​ 10 ​ 1 ​ 10.0 % Other ​ 14 ​ 2 ​ 12 ​ 600.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total general and administrative ​ $ 1,340 ​ $ 629 ​ $ 711 ​ 113.0 % ​ General and administrative expenses increased by approximately $0.7 million, or 113%, to approximately $1.3 million for the three months ended June 30, 2021 compared to approximately $0.6 million for the three months ended June 30, 2020. The increase of approximately $0.7 million was primarily due to increased employee related costs of approximately $0.3 million, increased professional fees incurred for accounting, auditing, legal, public relations and tax services of approximately $0.3 million. Other Income, Net Other income decreased by approximately $1,000, or 50% due to a decrease in interest rates earned from our cash and cash equivalents balances due to changes in interest rates. Comparison of the Six Months June 30, 2021 and 2020 The following table summarizes our results of operations for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ ​ ​ 2021 2020 $ % ​ ​ ​ (in thousands, except percentages) ​ Revenue ​ $ 1,408 ​ $ 964 ​ $ 444 ​ 46 % Cost of revenue ​ ​ 728 ​ ​ 492 ​ ​ 236 ​ 48 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ ​ 680 ​ ​ 472 ​ ​ 209 ​ 44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ ​ 12,383 ​ ​ 6,044 ​ ​ 6,339 ​ 105 % General and administrative ​ ​ 2,524 ​ ​ 1,273 ​ ​ 1,251 ​ 98 % Total operating expenses ​ ​ 14,907 ​ ​ 7,318 ​ ​ 7,590 ​ 104 % Loss from operations ​ ​ (14,227) ​ ​ (6,846) ​ ​ (7,381) ​ 108 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 10 ​ ​ 41 ​ ​ (31) ​ (77) % Net loss ​ $ (14,217) ​ $ (6,805) ​ ​ ​ ​ ​ ​ ​ 29 Table of Contents Revenue The following table summarizes the revenue recognized for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, Change ​ ​ ​ 2021 2020 ​ $ % ​ ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 1,408 ​ $ 964 ​ $ 444 ​ 46 % ​ Revenue increased by approximately $0.4 million, or 46%, to approximately $1.4 million for the six months ended June 30, 2021 compared to approximately $1.0 million for the six months ended June 30, 2020. The increase in revenue was due to an increase by approximately $0.4 million from new customers during 2021 and, a $0.2 million increase in existing customers partially offset by an approximately $0.2 million decrease due to customer agreements that were completed in 2020. Costs of Revenue The following table summarizes the components of cost of revenue expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, Change ​ ​ 2021 2020 ​ $ % ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee related costs ​ $ 655 ​ $ 404 ​ $ 251 ​ 62.1 % Equity-based compensation expense ​ 45 ​ 53 ​ (8) ​ (15.1) % Facilities and other allocated expenses ​ 25 ​ 33 ​ (8) ​ (24.2) % Depreciation ​ 3 ​ 2 ​ 1 ​ 50.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue ​ $ 728 ​ $ 492 ​ $ 236 ​ 48.0 % ​ Cost of revenue increased by approximately $0.2 million, or 48%, to approximately $0.7 million for the six months ended June 30, 2021 compared to approximately $0.5 million for the six months ended June 30, 2020. The increase was primarily due to increased employee related costs of approximately $0.3 million, partially offset by decreases in equity-based compensation, facilities, depreciation, and outside contract research services. Research and Development The following table summarizes the components of research and development expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, Change ​ ​ 2021 2020 ​ $ % ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee related costs ​ $ 3,817 ​ $ 2,330 ​ $ 1,487 ​ 63.8 % Equity-based compensation expense ​ 266 ​ 245 ​ 21 ​ 8.6 % Outside contract research services ​ 8,071 ​ 3,304 ​ 4,767 ​ 144.3 % Facilities and other allocated expenses ​ 213 ​ 156 ​ 57 ​ 36.5 % Depreciation ​ 16 ​ 9 ​ 7 ​ 77.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total research and development ​ $ 12,383 ​ $ 6,044 ​ $ 6,339 ​ 104.9 % ​ Research and development expenses increased by approximately $6.3 million, or 104.9%, to approximately $12.4 million for the six months ended June 30, 2021 as compared to approximately $6.0 million for the year ended June 30, 2020. The increase of approximately $6.3 million was primarily due to approximately $4.8 million of outside contract research 30 Table of Contents services for our preclinical candidates due to an increased number of discovery programs and increased spending on later stage preclinical efforts. The increase also includes approximately $1.5 million of additional employee related costs, primarily due to higher headcount and increased equity-based compensation and facilities and other allocated expense of approximately $0.1 million. General and Administrative The following table summarizes the components of general and administrative expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, Change ​ ​ 2021 2020 ​ $ % ​ ​ (in thousands, except percentages) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee related costs ​ $ 1,142 ​ $ 503 ​ $ 639 ​ 127.0 % Equity-based compensation expense ​ 223 ​ 262 ​ (39) ​ (14.9) % Professional fees ​ 916 ​ 363 ​ 553 ​ 152.3 % Public relations ​ 197 ​ 114 ​ 83 ​ 72.8 % Outside consultants ​ 11 ​ 9 ​ 2 ​ 22.2 % Facilities and other allocated expenses ​ 20 ​ 20 ​ — ​ — % Other ​ 15 ​ 2 ​ 13 ​ 650.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total general and administrative ​ $ 2,524 ​ $ 1,273 ​ $ 1,251 ​ 98.3 % ​ General and administrative expenses increased by approximately $1.3 million, or 98.3%, to approximately $2.5 million for the six months ended June 30, 2021 compared to approximately $1.3 million for the six months ended June 30, 2020. The increase of approximately $1.3 million was primarily due to increased employee related costs of approximately $0.6 million, increased professional fees incurred for accounting, auditing, legal, and tax services of approximately $06 million, increased public relation costs of approximately $0.1 million, partially offset by a decrease in equity-based compensation expense.. Other Income (Expense), Net Other income decreased by approximately $31,000, or 77% due to a decrease in interest rates earned from our cash and cash equivalents balances due to changes in interest rates. Liquidity and Capital Resources Sources of Liquidity Since our inception, we have financed our operations through service revenues, the issuance of convertible notes payable, convertible preferred stock, common stock, and the exercise of stock options. As of June 30, 2021, we had an accumulated deficit of $40.0 million and $50.2 million in cash and cash equivalents. Cash and cash equivalents are comprised of deposits at major financial banking institutions and highly liquid investments with an original maturity of three months or less at the date of purchase. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, reflected in the change in our outstanding accounts payable and accrued expenses. Since our inception, we have incurred significant operating losses. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for the next several years, if at all. To date, our operations have been financed primarily by service revenues and aggregate net proceeds of approximately $81.4 million from the issuance of convertible notes payable, convertible preferred stock including gross proceeds of approximately $24.8 million from the issuance of shares in the second tranche of Series B Preferred in April and May 2021, common stock, the exercise of stock options and most recently, the proceeds from our IPO. In August, 2021, 31 Table of Contents we completed our IPO pursuant to which we issued and sold 8,625,000 shares of Class A common stock, inclusive of 1,150,000 shares sold by us pursuant to the full exercise of the underwriters’ option to purchase additional shares. We received aggregate net proceeds of approximately $120.3 million from the IPO, after deducting underwriting discounts and commissions, but before deducting offering costs payable by us, which are estimated to be $2.0 million. Cash Flows The following table summarizes our sources and uses of cash for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2021 2020 ​ ​ (in thousands) Net cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (12,577) ​ $ (5,682) Investing activities ​ ​ (36) ​ ​ (10) Financing activities ​ ​ 25,769 ​ ​ 998 ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ​ $ 13,155 ​ $ (4,693) ​ Net Cash Used in Operating Activities During the six months ended June 30, 2021, operating activities used approximately $12.6 million of cash, primarily resulting from our net loss of approximately $14.2 million and cash provided by changes in our operating assets and liabilities of approximately $1.0 million, partially offset by equity-based compensation expense of approximately $0.5 million. During the six months ended June 30, 2020, operating activities used approximately $5.7 million of cash, primarily resulting from our net loss of approximately $6.8 million, partially offset by equity-based compensation expense of approximately $0.6 million and cash provided by changes in our operating assets and liabilities of approximately $0.6 million. Net Cash Used in Investing Activities During the six months ended June 30, 2021 and 2020, investing activities used approximately $36,388, and $9,754 respectively, for the purchase of property and equipment. Net Cash Provided by Financing Activities During the six months ended June 30, 2021, net cash provided by financing activities was approximately $25.8 million, consisting primarily of approximately $24.8 million in net proceeds received from the issuance of Series B preferred stock and approximately $1.0 million in net proceeds from the exercise of warrants and approximately $52,625 from the exercise of stock options. During the six months ended June 30, 2020, net cash provided by financing activities was approximately $1.0 million, consisting primarily of proceeds received from the issuance of Series A preferred stock, net of issuance costs. Future Funding Requirements We expect that our expenses will increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. The timing and amount of our operating and capital expenditures will depend largely on: ● the impacts of the pandemic related to COVID-19 and its variants and potential future pandemics; ● the costs and results of our potential future clinical trials for our other product candidates; 32 Table of Contents ● the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our other product candidates; ● the costs, timing and outcome of regulatory review of our product candidates; ● our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient, or API, and manufacture of our product candidates and the terms of such arrangements; ● the payment or receipt of milestones and receipt of other collaboration-based revenues, if any; ● the costs and timing of any future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval; ● the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; ● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property related claims; ● the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights; ● our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such arrangements; ● our ability to access the private and public capital markets or to obtain financing at commercially reasonable rate; ● the ability to receive additional non-dilutive funding, including grants from organizations and foundations; and ● the costs of operating as a public company. We believe that our existing cash, cash equivalents and marketable securities, including the net proceeds from our IPO, will enable us to fund our operating expenses and capital expenditure requirements into 2024. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Contractual Obligations and Commitments There have been no material changes from the contractual commitments and obligations previously disclosed in the Prospectus. Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Prospectus. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting policies from those described in the Prospectus. Recently Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. Off-balance Sheet Arrangements During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC. 33 Table of Contents Emerging Growth Company Status As an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited consolidated financial statements in a registration statement for an IPO, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board, and less extensive disclosure about our executive compensation arrangements. In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We may remain classified as an EGC until the end of the fiscal year following the fifth anniversary of this offering, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of June 30 of any year before that time, or if we have annual gross revenues of $1.07 billion or more in any fiscal year, we would cease to be an EGC as of December 31 of the applicable year. We also would cease to be an EGC if we issue more than $1.0 billion of non-convertible debt over a three-year period.