Unicycive Therapeutics, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA UNICYCIVE THERAPEUTICS, INC. INDEX TO FINANCIAL STATEMENTS Page Audited Financial Statements for the years ended December 31, 2020 and 2021: Report of Independent Registered Public Accounting Firm (PCAOB ID # 199 ) F-2 Balance Sheets as of December 31, 2020 and 2021 F- 3 Statements of Operations for the years ended December 31, 2020 and 2021 F- 4 Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2020 and 2021 F- 5 Statements of Cash Flows for the years ended December 31, 2020 and 2021 F- 6 Notes to the Financial Statements F- 7 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Unicycive Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Unicycive Therapeutics, Inc. (the “Company”) as of December 31, 2021 and 2020, and the related statements of operations, stockholders’ (deficit) equity, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company's auditor since 2019. /s/ Mayer Hoffman McCann P.C. San Diego, California March 31, 2022 F- 2 Unicycive Therapeutics, Inc. Balance Sheets (in thousands, except for share and per share amounts) As of As of December 31, December 31, 2020 2021 Assets Current assets: Cash $ - $ 16,579 Deferred offering costs 200 - Prepaid expenses and other current assets 4 1,832 Total current assets 204 18,411 Right of use asset, net - 305 Property, plant and equipment, net - 28 Total assets $ 204 $ 18,744 Liabilities and stockholders’ (deficit) equity Current liabilities: Accounts payable $ 184 $ 742 Related party service fee payable 9 - Accrued liabilities 168 1,212 Convertible notes 1,528 - Loan from stockholder 967 - Operating lease liability - current - 151 Government loan 19 - Total current liabilities 2,875 2,105 Operating lease liability – long term - 155 Total liabilities 2,875 2,260 Commitments and contingencies (Note 8) Stockholders’ (deficit) equity: Preferred stock: $ 0.001 par value per share— 10,000,000 shares authorized at December 31, 2020 and 2021; no shares issued and outstanding at December 31, 2020 and 2021 $ - $ - Common stock, $ 0.001 par value per share – 200,000,000 shares authorized at December 31, 2020 and 2021; 8,514,070 shares issued and outstanding at December 31, 2020, and 14,996,534 shares issued and outstanding at December 31, 2021 9 15 Additional paid-in capital 3,242 32,408 Accumulated deficit ( 5,922 ) ( 15,939 ) Total stockholders’ (deficit) equity ( 2,671 ) 16,484 Total liabilities and stockholders’ (deficit) equity $ 204 $ 18,744 See accompanying notes to the financial statements F- 3 Unicycive Therapeutics, Inc. Statements of Operations (in thousands, except for share and per share amounts) Year Ended December 31, Year Ended December 31, 2020 2021 Operating expenses: Research and development $ 1,015 $ 6,080 General and administrative 1,005 2,897 Total operating expenses 2,020 8,977 Loss from operations ( 2,020 ) ( 8,977 ) Other expenses: Interest expense ( 244 ) ( 628 ) Loss on debt conversion - ( 431 ) Gain on extinguishment of debt - 19 Total other expenses ( 244 ) ( 1,040 ) Net loss $ ( 2,264 ) $ ( 10,017 ) Net loss per share, basic and diluted $ ( 0.27 ) $ ( 0.86 ) Weighted-average shares outstanding used in computing net loss per share, basic and diluted 8,499,687 11,675,750 See accompanying notes to the financial statements F- 4 Unicycive Therapeutics, Inc. Statements of Stockholders’ (Deficit) Equity (in thousands, except share amounts) Total Additional Stockholders’ Preferred Stock Common Stock Paid-In Accumulated (Deficit) Shares Amount Shares Amount Capital Deficit Equity Balance at December 31, 2019 - $ - 8,456,179 $ 8 $ 2,766 $ ( 3,658 ) $ ( 884 ) Net loss - - - - - ( 2,264 ) ( 2,264 ) Issuance of common stock for cash - - 33,263 1 141 - 142 Issuance of common stock for anti-dilution clause - - 24,628 - 104 - 104 Stock-based compensation expense - - - - 231 - 231 Balance at December 31, 2020 - 8,514,070 9 3,242 ( 5,922 ) ( 2,671 ) Net loss - - - - - ( 10,017 ) ( 10,017 ) Net proceeds from initial public offering - - 5,000,000 5 22,266 - 22,271 Conversion of convertible notes into common stock - - 736,773 1 3,684 - 3,685 Issuance of common stock for exercise of options - - 307,317 - 59 - 59 Issuance of common stock for anti-dilution clause - - 438,374 - 2,191 - 2,191 Stock-based compensation expense - - - - 966 - 966 Balance at December 31, 2021 - $ - 14,996,534 $ 15 $ 32,408 $ ( 15,939 ) $ 16,484 See accompanying notes to the financial statements F- 5 Unicycive Therapeutics, Inc. Statements of Cash Flows (in thousands) Year Ended Year Ended December 31, December 31, 2020 2021 Cash flows from operating activities Net loss $ ( 2,264 ) $ ( 10,017 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense - 1 R&D expense for issuance of common stock for anti-dilution clause 104 2,191 Stock-based compensation expense 232 966 Convertible debt discount amortization 186 488 Amortization of operating lease right of use asset - 12 Convertible debt non-cash interest 53 139 Gain on extinguishment of debt - ( 19 ) Deferred compensation to CEO 396 146 Loss on debt conversion - 431 Changes in assets and liabilities: Prepaid expense and other current assets 1 ( 1,325 ) Accounts payable and accrued liabilities ( 68 ) 1,241 Operating lease liability - ( 12 ) Related party service fee payable ( 99 ) ( 9 ) Net cash used in operating activities ( 1,459 ) ( 5,767 ) Cash flows from investing activities Purchases of property, plant and equipment - ( 29 ) Net cash used in investing activities - ( 29 ) Cash flows from financing activities Net proceeds from initial public offering - 22,271 Issuance of common stock for cash 141 - Proceeds from loan from stockholder 271 248 Proceeds from convertible notes 1,290 1,098 Repayment of loan from stockholder ( 160 ) ( 1,361 ) Deferred offering costs ( 117 ) - Proceeds from exercise of options - 119 Proceeds from government loan 19 - Net cash provided by financing activities 1,444 22,375 Net (decrease) increase in cash ( 15 ) 16,579 Cash at the beginning of the period 15 - Cash at the end of the period $ - $ 16,579 Supplemental cash flow information Deferred offering costs included in accrued liabilities $ 82 $ - Deferred preclinical charges included in prepaid expenses and other current assets $ - $ 503 Cash paid for income taxes $ 1 $ - See accompanying notes to the financial statements F- 6 Notes to the Financial Statements 1. Organization and Description of Business Overview Unicycive Therapeutics, Inc. (“the Company”) was incorporated in the State of Delaware on August 18, 2016. The Company was dormant until July 2017 when it began evaluating a number of drug candidates for in-licensing. The Company in-licensed the drug candidate UNI 494 from Sphaera Pharma Pte. Ltd, a Singapore-based corporation, (“Sphaera”) (Note 3). UNI 494 is a pro-drug of Nicorandil that is being developed as a treatment for acute kidney injury. In September 2018, the Company purchased a second drug candidate, Renazorb RZB 012 (“Renazorb”) and its trademark, RENALAN, and various patents from Spectrum Pharmaceuticals, Inc. (“Spectrum”) (Note 3). Renazorb is being developed for the treatment of hyperphosphatemia in patients with Chronic Kidney Disease (“CKD”). The Company continues to evaluate the licensing of additional technologies and drugs, targeting orphan diseases and other renal, liver and other metabolic diseases affecting fibrosis and inflammation. Liquidity The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with governmental regulations and the need to obtain additional financing to fund operations. The Company’s product candidates currently under development will require significant additional research and development efforts prior to commercialization. The Company has not generated revenue to date. The Company has incurred operating losses and negative cash flows from operations since inception and expects to continue to incur negative cash flows from operations for the foreseeable future. As the Company increases its research and development activities, the operating losses are expected to increase. The Company has historically relied on private equity offerings, debt financings and loans from a stockholder to fund its operations. As of December 31, 2020 and 2021, the Company had an accumulated deficit of $ 5.9 million and $ 15.9 million, respectively. As a result of its initial public offering (“IPO”), on July 13, 2021 the Company began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 received approximately $ 22.3 million in net proceeds after deducting the underwriting discounts, commissions and other offering expenses. The Company intends to use the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate purposes, including hiring additional management and conducting market research and other commercial planning. The Company expects to continue incurring losses for the foreseeable future and will be required to raise additional capital in the future to complete its planned clinical trials, pursue product development initiatives and penetrate markets for the sale of its products. Management believes that the Company will continue to have access to capital resources through possible equity offerings, debt financings, corporate collaborations or other means. From January 2021 through May 2021, the Company received an aggregate of $ 1.1 million upon the issuance of convertible notes. These funds were used primarily to settle outstanding accounts payable as well as to make payments on the loan outstanding from the chief executive officer and principal stockholder. In addition, the Company received approximately $ 22.3 million in net proceeds from its IPO. There can be no assurance that the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis or at all. If the Company is unable to secure additional capital, it may be required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. Based on the Company’s current level of expenditures, and given the Company’s cash balance of $ 16.6 million as of December 31, 2021, the Company believes that it has sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one year after the date that these financial statements are available to be issued. F- 7 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All common share amounts and per share amounts have been adjusted to reflect a 1-for-4.3 reverse stock split of the Company’s common stock that was effected on June 21, 2021. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the periods presented. Management believes that these estimates and assumptions are reasonable; however, actual results may differ and could have a material effect on future results of operations and financial position. Significant items subject to such estimates and assumptions include progress estimates for material third party research and development contracts, stock-based compensation and fair value of the Company’s common stock prior to the Company’s IPO. Actual results may materially differ from those estimates. Segment Information The Company operates and manages its business as one reportable operating segment. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Risks and Uncertainties The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company related to intellectual property, product, regulatory, or other matters; and the Company’s ability to attract and retain employees necessary to support its growth. The Company’s general business strategy may be adversely affected by any such economic downturns (including the current downturn related to the ongoing COVID-19 pandemic), volatile business environments and continued unstable or unpredictable economic and market conditions. Any product candidates developed by the Company will require approvals from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s current product candidates or any future product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval, it could have a materially adverse impact on the Company. The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of its product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company will require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs, which would materially and adversely affect its business, financial condition and operations. The Company is dependent upon the services of its employees, consultants and other third parties. F- 8 Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and other fees and costs relating to the Company’s IPO were capitalized and recorded as a current asset on the balance sheet. There were $ 0.2 million of deferred offering costs capitalized as of December 31, 2020. As of December 31, all previously deferred offering costs, totaling approximately $ 0.9 million, were netted against the proceeds received upon the closing of the IPO, which occurred on July 15, 2021. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Additions, improvements, and major renewals or replacements that substantially extend the useful life of an asset are capitalized. Repairs and maintenance expenditures are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value at that time. At December 31, 2021, management determined there were no impairments of the Company’s property and equipment. Leases The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. Fair Value of Financial Instruments The Company’s financial instruments include cash, prepaid expenses, accounts payable, convertible notes and a loan from the Chief Executive Officer and stockholder of the Company. The carrying amounts of these items approximate fair value as of December 31, 2020 and 2021 due to their short-term nature. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash. All of the Company’s cash was deposited in one account at a financial institution, and the account balance may at times exceed federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. Prepaid Expenses Prepaid expenses represent costs incurred that benefit future periods. These costs are amortized over specific time periods based on the agreements. F- 9 Research and Development Expenses Substantially all of the Company’s research and development expenses consist of expenses incurred in connection with the development of the Company’s product candidates. These expenses include fees paid to third parties to conduct certain research and development activities on the Company’s behalf and related progress estimates for those activities, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for the Company’s research and product development employees and allocated overheads, including information technology costs and utilities and expenses for issuance of shares pursuant to the anti-dilution clause in the purchase of IPR&D technology. The Company expenses both internal and external research and development expenses as they are incurred. General and Administrative Expenses General and administrative expenses represent personnel costs for employees involved in general corporate functions, including finance, accounting, legal and human resources, among others. Additional costs included in general and administrative expenses consist of professional fees for legal (including patent costs), audit and other consulting services, stock-based compensation and other general corporate overhead expenses as well as costs from a service agreement with a related party (See Note 7). Patent Costs The Company expenses all costs as incurred in connection with patent licenses and applications (including direct application fees, and the legal and consulting expenses related to making such applications) and such costs are reflected in general and administrative expenses in the statements of operations. Stock-Based Compensation The Company accounts for stock-based compensation for all share-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation expense over the requisite service period on a straight-line basis. The Company recognizes forfeitures related to stock-based compensation as they occur. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes model requires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, risk-free interest rate, and the estimated fair value of the Company’s underlying common stock on the date of grant. Common Stock Valuations Prior to the Company’s IPO, the fair value of common stock was estimated with the assistance of an independent third-party valuation expert when issuing stock options and computing their estimated stock-based compensation expense. The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of significant levels of management judgment. In order to determine the fair value, the Company considered, among other things, contemporaneous transactions involving the sale of common stock to unrelated third parties, the lack of marketability of the common stock and the market performance of comparable publicly traded companies. Subsequent to our IPO, the Company determines the fair value of common stock from closing prices as quoted on the NASDAQ exchange. Income Taxes The Company accounts for corporate income taxes in accordance with GAAP as stipulated in ASC, Topic 740, Income Taxes, (“ASC 740”). This standard entails the use of the asset and liability method of computing the provision for income tax expense. Current tax expense results from corporate tax payable at the Federal and California jurisdictions for the Company, which relate to the current accounting period. Deferred tax expense results primarily from temporary differences between financial statement and tax return reporting, which result in additional tax payable in future periods. Deferred tax assets and liabilities are determined based on the differences between the financial statement basis and tax basis of assets and liabilities using enacted tax rates and law. Net future tax benefits are subject to a valuation allowance when management expects that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. F- 10 Current and non-current tax assets and liabilities are based upon an estimate of taxes refundable or payable for each of the jurisdictions in which the Company is subject to tax. In the ordinary course of business there is inherent uncertainty in quantifying income tax positions. The Company assess income tax positions and record the largest amount of tax benefit with a greater than 50 % likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company’s policy is to recognize interest or penalties related to income tax matters in income tax expense. Comprehensive Loss Comprehensive loss includes all changes in equity (net assets) during a period from non-owner sources. There were no elements of other comprehensive income (loss) in the periods presented, as a result comprehensive loss is the same as net loss for each period presented. Net Loss per Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, common stock options and warrants are considered to be potentially dilutive securities. Basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities. The Company has no participating securities and as such, the net loss was attributed entirely to common stockholders. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods. All common share amounts and per share amounts have been adjusted to reflect a 1-for-4.3 reverse stock split of the Company’s common stock that was effectuated on June 21, 2021. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company’s financial position or results of operations upon adoption. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments. ASU 2020-06 eliminates certain models that require separate accounting for embedded conversion features. Additionally, among other changes, the guidance eliminates certain of the conditions for equity classification for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This guidance is effective for the Company beginning in the first quarter of 2022 and must be applied using either a modified or full retrospective approach. Early adoption is permitted, but no earlier than annual periods beginning after December 15, 2020. The Company is currently evaluating the impact this guidance will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the leases with a term of greater than 12 months. This ASU is effective for the Company’s fiscal years beginning after December 15, 2021, with early adoption permitted. The Company has adopted this standard effective as of January 1, 2019. The Company chose to adopt certain practical expedients available from the FASB. As a policy election, the Company chose to expense and amortize, on a straight line, the leases with terms less than 12 months. In addition, the Company chose not to separate certain lease and non-lease components when evaluating the fair value of a lease. The adoption of this standard did not have a material effect on the Company’s financial statements. F- 11 3. Significant Agreements With regards to manufacturing, testing and potential commercial supply of Renazorb, the Company has entered into an agreement with Shilpa Medicare Ltd based in India. According to the terms of the agreement Unicycive will pay the vendor $2 million in the first calendar year when the net revenue reaches $10 million from sales of Renazorb following its approval by the FDA and commercial supply of the product by the vendor (First Payment). Thereafter, we will pay $2 million per year for four consecutive years, after the first year’s payment, for the total payments of $10 million, provided all commercial supplies are continued to be manufactured and supplied by the vendor. Unicycive is not obligated to make any payments to the vendor until FDA approval of the product is obtained and commercial revenue is generated. In October 2017, the Company entered into an exclusive license agreement with Sphaera, a stockholder, for the rights to further develop the drug candidate, UNI 494, for commercialization. No payments were made upon execution of the agreement but rather payments for $50,000 will be due commencing with the initiation by the Company of a second clinical trial and $50,000 on completion of such trial. At the time the FDA accepts a NDA application submitted by the Company for the product, the Company will pay Sphaera $1.65 million. Upon commercialization and sale of the drug product, royalty payments will also be payable quarterly to Sphaera equal to 2% of net sales on the preceding quarter. In September 2018, the Company entered into an Assignment and Asset Purchase Agreement with Spectrum Pharmaceuticals, Inc. (“Spectrum Agreement”) pursuant to which the Company purchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to Renazorb RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together with Renalan, the “Compounds”), to further develop and commercialize Renazorb and related compounds. In partial consideration for the Spectrum Agreement, the Company issued 313,663 shares of common stock to Spectrum valued at approximately $ 4,000 which represented four percent of the Company on a fully-diluted basis at the date of the execution of the Spectrum Agreement. The Spectrum Agreement has an anti-dilution provision, which provides that Spectrum maintain its ownership interest in the Company at 4 % of the Company’s shares on a fully-diluted basis. Fully-diluted shares of common stock for purposes of the Renazorb Purchase Agreement assumes conversion of any security convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock reserved for issuance under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors of the Company immediately following the issuance of additional shares of the Company’s common stock (but prior to the issuance of any additional shares of common stock to Spectrum). Spectrum’s ownership shall not be subject to dilution until the earlier of thirty-six months from the first date the Company’s stock trades on a public market, or the date upon which the Company attains a public market capitalization of at least $ 50 million. As part of the anti-dilution clause, the Company issued 149,762 and 105,897 shares of common stock during the years ended December 31, 2019 and 2020, respectively. The Company recognized $ 145,000 and $ 104,000 for the years ended December 31, 2019 and 2020, respectively, as research and development expenses as cost to issue those shares. On July 13, 2021, the Company’s IPO resulted in a public market capitalization of at least $ 50 million, and as a result the Company was required to issue 438,374 anti-dilution shares of common stock. This issuance represents the final anti-dilution calculation required under the Spectrum Agreement, and no further anti-dilution shares will be issued. The Company calculated the fair value of the shares and recognized $ 2.2 million to research and development expenses as cost to issue those shares during the third quarter of 2021. The Company is also required to pay Spectrum 40% of all of the Company’s sublicense income for any sublicense granted to certain sublicensees during the first 12 months after the Closing Date (as that term is defined in the Renazorb Purchase Agreement) and 20% of all other sublicense income. The Company’s payment obligations to Spectrum will expire on the twentieth (20 th ) anniversary of the Closing Date of the Renazorb Purchase Agreement. On February 8, 2021, the Company entered into a Master Services Agreement (the “Renazorb Development Agreement”) with Ascent Development Services, Inc. (“Ascent”) pursuant to which Ascent will provide strategic services related to the development of Renazorb or other investigational products (the “Compounds”) for clinical use and regulatory approval in Japan and other Asian countries. The Renazorb Development Agreement anticipates services to be provided by Ascent will include market research, facilitation of informal and formal meetings with Japan’s Pharmaceutical and Medical Devices Agency (“PMDA”), management of contract research organizations and clinical trials, and government applications and regulatory filings related to the Asian development of the Compounds. Unicycive will supply the Compounds or other materials necessary for Ascent to perform the development services. The initial Statement of Work (“SOW”) under the Renazorb Development Agreement encompasses the development of clinical strategy as well as both informal and formal meetings with the PMDA. The budget for the initial SOW is approximately 24,000,000 Japanese Yen, and an upfront payment of approximately $87,000, was paid to Ascent upon the execution of the Renazorb Development Agreement. Deliverables for the initial SOW were completed by December 31, 2021. F- 12 On July 19, 2021, the Company entered into an agreement with Syneos Health LLC (“Syneos”) pursuant to which Syneos will provide preclinical research and analysis services related to the development of UNI-494. The budget for the initial study, which will also include clinical pharmacology, translational sciences, and bioanalytical services, is approximately $1.9 million, and related payments totaling approximately $379,000 have been paid to Syneos during the year ended December 31, 2021. 4. Balance Sheet Components Prepaid expenses and other current assets as of December 31, 2020 and 2021 consisted of the following (in thousands): As of As of December 31, December 31, 2020 2021 Prepaid directors and officers liability insurance premiums $ - $ 821 Prepaid preclinical services - 885 Other 4 126 Total $ 4 $ 1,832 Property, plant and equipment as of December 31, 2020 and 2021 consisted of the following (in thousands): As of As of December 31, December 31, 2020 2021 Leasehold improvements $ - $ 15 Furniture and fixtures - 14 Subtotal - 29 Less accumulated depreciation - ( 1 ) Net $ - $ 28 Accounts payable as of December 31, 2020 and 2021 consisted of the following (in thousands): As of As of December 31, December 31, 2020 2021 Trade accounts payable $ 183 $ 713 Credit card liability 1 29 Total $ 184 $ 742 Accrued liabilities as of December 31, 2020 and 2021 consisted of the following (in thousands): As of As of December 31, December 31, 2020 2021 Accrued labor costs $ - $ 691 Accrued drug development costs - 369 Other 168 152 Total $ 168 $ 1,212 F- 13 5. Operating Lease The Company leases office space under an operating lease. In December 2021, the Company entered into a lease agreement for 2,367 square feet of office space commencing December 1, 2021. The initial lease term is for two years, and there is an option to extend the lease for an additional year. In accounting for the leases, the Company adopted ASC 842 Leases on January 1, 2019, which requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease initially measured at the present value of the lease payments. The Company classified the lease as an operating lease and, at December 1, 2021, determined that the present value of the lease was approximately $ 318,000 using a discount rate of 8.0 %. In accordance with ASC 842, the right-of-use asset will be amortized over the life of the underlying lease. The Company determined that the option to extend the lease for an additional year was not considered reasonably certain at December 31, 2021. During the year ended December 31, 2021, the Company reflected amortization of right-of-use asset of approximately $ 12,000 , resulting in a right of use asset balance of $ 305,000 . During the year ended December 31, 2021, the Company made cash payments on the lease of $ 14,000 towards the lease liabilities. As of December 31, 2021, the total lease liability was $ 306,000 . ASC 842 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Rent expense for the lease for the year ended December 31, 2021 was approximately $ 14,000 . Maturities of the Company’s lease liabilities are as follows (in thousands): Operating Lease Year ending December 31, 2022 $ 170 Year ending December 31, 2023 161 Total lease payments 331 Less imputed interest rate / present value discount ( 25 ) Present value of lease liability 306 Less current portion ( 151 ) Long term portion $ 155 6. Debt Convertible Notes In January through May 2021, the Company issued convertible notes (the “2021 Notes”) in the aggregate principal amount of approximately $ 1.1 million. The 2021 Notes bear interest at a rate of 12% per annum, payable at maturity, and mature between January and May, 2022. The 2021 Notes shall automatically convert into shares of the Company’s common stock upon the closing of a financing pursuant to which the Company receives gross proceeds of at least $500,000 (a “Qualified Financing”) or upon a change of control. The 2021 Notes shall convert into such numbers of shares of the Company’s common stock equal to the conversion amount divided by the Conversion Price. “Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per share (or conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price per share reflected in such transaction. The Company has accounted for the 2021 Notes as stock-settled debt and was accreting the carrying amount of the 2021 Notes to the settlement amount through maturity. F- 14 In July through November 2020, the Company issued convertible notes (the “2020 Notes”) in the aggregate principal amount of $1.3 million. The 2020 Notes bear interest at a rate of 12% per annum, payable at maturity, and mature between July and November, 2021. The 2020 Notes shall automatically convert into shares of the Company’s common stock upon the closing of a financing pursuant to which the Company receives gross proceeds of at least $500,000 (a “Qualified Financing”) or upon a change of control. The 2020 Notes shall convert into such numbers of shares of the Company’s common stock equal to the conversion amount divided by the Conversion Price. “Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per share (or conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price per share reflected in such transaction. The Company has accounted for the 2020 Notes as stock-settled debt and is accreting the carrying amount of the 2020 Notes to the settlement amount through maturity. As of December 31, 2020, unpaid and accrued interest of $ 53,000 as well as debt discount accretion expense of approximately $ 186,000 was included with the convertible notes on the balance sheet. As a result of the completion of the Company’s IPO on July 15, 2021, approximately $ 2.4 million of principal and $ 191,000 of unpaid accrued interest related to the 2021 and 2020 Notes was converted into shares of common stock. Additionally the noteholders were granted warrants equal to 25 % of the conversion shares issued. The conversion resulted in a loss of $ 431,000 that is included as loss on debt conversion in the accompanying statements of operations for the year ended December 31, 2021. Paycheck Protection Program Loan On April 23, 2020, the Company entered into an $18,000 loan with Silicon Valley Bank pursuant to the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) as well as a $1,000 loan pursuant to the Economic Injury Disaster Assistance Program. The PPP loan proceeds are intended to be used for payroll over the eight-week period following the date of the loan. The loan terms provide that no principal or interest payments are due and interest will accrue at 1% per annum commencing on April 23, 2020 through October 23, 2020 (deferral period). Commencing one month after the deferral period and continuing monthly through the maturity of the loan on April 23, 2022, equal monthly payments of principal and interest are due. The Company classified the loans as a current liability, has applied for and received loan forgiveness in February 2021, and recorded a gain on extinguishment of debt in the statement of operations for the year ended December 31, 2021. 7. Related Party Transactions Loan from Chief Executive Officer and Stockholder The Company received advances from a stockholder of $ 248,000 during the year ended December 31, 2021. The Company repaid amounts owed to the stockholder of $ 1.4 million during the year ended December 31, 2021. As of December 31, 2020 and 2021, the current liability loan from a stockholder was approximately $ 967,000 and $ 0 , respectively. F- 15 Common Stock Purchase Agreement and Service Agreement with Globavir On July 1, 2017, the Company entered into a Common Stock Purchase Agreement (“Stock Agreement”) with Globavir. The Company’s principal stockholder is also the principal stockholder in Globavir. The Stock Agreement provided for the distribution of 62,181 shares of the Company’s common stock, valued at $ 0.013 per share, to Globavir’s stockholders as payment for Globavir’s services and shared costs rendered on behalf of the Company in 2017, which were issued in 2018. On July 1, 2017, as amended on April 6, 2020, the Company entered into a Service Agreement with Globavir Biosciences, Inc. (“Globavir”), a related party (the “Service Agreement”). Globavir provides administrative and consulting services and shared office space and other costs in connection with the Company’s drug development programs. The initial amended term of the Service Agreement expired on December 31, 2020, and the agreement automatically renews for successive one month periods after the initial termination date. Pursuant to the Service Agreement, the Company paid Globavir $50,000 per month through December 31, 2019 and $10,000 per month commencing on January 1, 2020. As of December 31, 2020, $9,000 was payable to Globavir for service fees. During the fourth quarter of 2021, after determining that future services under the Service Agreement were no longer required, the Company wrote off the $28,000 remaining prepaid balance due from Globavir as of December 31, 2021. Service fee expenses were $120,000 and $148,000 for the years ended December 31, 2020 and 2021, respectively, and were recorded as general and administrative expenses in the statements of operations. 8. Commitments and Contingencies Contingencies The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s financial statements. The Company currently has no pending claims or legal proceedings. In September 2020, the Company signed an engagement letter (the “Benchmark Agreement”) with The Benchmark Company LLC (“Benchmark”) to act as the lead or managing underwriter in connection with the Company’s planned IPO. In connection with this agreement the Company agreed to pay a nonaccountable expense allowance to Benchmark equal to 1.0 % of the gross proceeds received in the Company’s planned IPO. In addition to the non-accountable expense allowance, the Company has also agreed to pay or reimburse the underwriters for certain of the underwriters’ out-of-pocket expenses relating to the offering, including all reasonable fees and expenses of the underwriters’ outside legal counsel, and background checks, which shall not exceed in the aggregate $ 132,500 . In March 2021, the Benchmark Agreement was terminated. Concurrent with the termination, the Company signed an advisory services agreement pursuant to which the Company will pay Benchmark $ 150,000 upon the closing of the planned IPO, and Benchmark provided advisory services with respect to the public offering. The Company paid the $ 150,000 advisory fee in July 2021. Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications, including for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. F- 16 The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. However, the Company may record charges in the future as a result of these indemnification obligations. Additionally, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. Employee Benefit Plan In December 2021, the Company implemented a 401K Plan which covers all eligible employees of the Company (the “401K Plan”). Employer matching contributions are immediately 100 % vested. The Company’s 401K Plan provides that the Company match each participant's contribution at 100 % up to 4 % of the employee’s eligible compensation. Company contributions to the 401K Plan totaled approximately $ 0 and $ 6,000 for the years ended December 31, 2020 and 2021, respectively. 9. Stockholders’ (Deficit) Equity Authorized Common Stock The Company is authorized to issue up to 200,000,000 shares of common stock at par value of $ 0.001 per share. Issuance of Common Stock and Warrants During July 2021, as a result of its IPO, the Company issued 5,000,000 shares of common stock and 4,000,000 warrants to investors in exchange for cash at $ 5.00 per unit, consisting of $ 4.99 per share of common stock and $.0125 per four fifths of a warrant. The warrants have a 5 -year term and an exercise price of $ 6.00 per warrant. The underwriters exercised their option to purchase an additional 600,000 warrants, and the Company received $ 7,500 in proceeds. As a result of the IPO, the Company’s outstanding convertible notes and unpaid accrued interest were converted into 736,773 shares of common stock. Additionally, in accordance with the original terms of the warrant agreements convertible noteholders were granted a total of 184,193 common stock warrants with a 5 -year term and with an exercise price of $ 6.00 per warrant. The following table summarizes activity for warrants for the year ended December 31, 2021: Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Outstanding Exercise Term Value Warrants Price (in Years) (in thousands) Outstanding, December 31, 2020 - - - - Warrants granted 4,784,193 6.00 4.54 - Warrants exercised - - - - Outstanding, December 31, 2021 4,784,193 6.00 4.54 - During July 2021, 438,374 shares of common stock were allocated to Spectrum Pharmaceuticals, Inc. in accordance with the anti-dilution provisions of the Company’s Assignment and Asset Purchase Agreement with Spectrum. During the year ended December 31, 2021, employees and consultants exercised a total of 383,721 stock options and the Company received $119,000 in proceeds. A portion of these options were exercised early (prior to vesting), and as of December 31, 2021, 76,397 of the options remained unvested. Proceeds received related to the unvested options of $60,000 at December 31, 2021 were included in accrued liabilities on the accompanying balance sheets and will be reclassified to equity as vesting occurs, provided the employees and consultants continue to provide services to the Company. The vested portion of the exercises was 307,317 shares at December 31, 2021. During the year ended December 31, 2020, the Company issued 33,263 shares to investors in exchange for cash at $ 4.21 per share and 24,627 shares to Spectrum following its anti-dilution provision (Note 3). F- 17 Voting Rights of Common Stock Each holder of shares of common stock shall be entitled to one vote for each share thereof held. Preferred Stock As of December 31, 2020 and 2021, the Company had 10,000,000 shares of preferred stock authorized, par value of $ 0.001 per share and no shares of preferred stock were issued or outstanding. 10. Stock-based Compensation On July 15, 2021, in connection with the completion of the Company’s IPO, the Company adopted a new comprehensive equity incentive plan, the 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). Following the effective date of the 2021 Plan, no further awards may be issued under the 2018 Plan or the 2019 Plan (collectively, the “Prior Plans”). However, all awards under the Prior Plans that are outstanding as of the effective date of the 2021 Plan will continue to be governed by the terms, conditions and procedures set forth in the Prior Plans and any applicable award agreements. A total of 1,302,326 shares of common stock are reserved for issuance pursuant to the 2021 Plan. The 2021 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. In October 2019, the Company adopted the 2019 Stock Option Plan (“2019 Plan”) which allowed for the granting of incentive stock options (“ISO”), non-qualified stock options (“NSO”) to the employees, members of the board of directors and consultants of the Company. In 2019 and during the first seven months of 2020, the Company granted ISOs and NSOs to consultants and directors from the 2019 Plan. As of December 31, 2019, 232,558 shares were authorized for issuance and 75,581 shares were available for future grant under the 2019 Plan. On April 6, 2020 the Company increased the shares authorized for issuance to 348,837 shares total. On February 17, 2021, the Company increased the shares authorized for issuance to 1,767,442 shares total. As of July 15, 2021, no further awards may be issued under the 2019 Plan due to the adoption of the Company’s 2021 Plan. In 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”) which allowed for the granting of incentive stock options (“ISO”), non-qualified stock options (“NSO”), stock appreciation rights, restricted stock and restricted stock units to the employees, members of the board of directors and consultants of the Company. In 2018, the Company granted ISOs and NSOs to consultants and directors from this plan. As of December 31, 2020, 465,116 shares were authorized for issuance and 17,442 shares were available for future grant under the 2018 Plan. As of July 15, 2021, no further awards may be issued under the 2018 Plan due to the adoption of the Company’s 2021 Plan. The following table summarizes activity for stock options under all plans for the year ended December 31, 2021: Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Outstanding Exercise Term Value Options Price (in Years) (in thousands) Outstanding, December 31, 2020 786,047 $ 1.42 8.28 $ 2,201 Options granted 760,245 $ 3.82 Options forfeited ( 27,907 ) $ 3.27 Options exercised ( 307,317 ) $ 0.19 Outstanding, December 31, 2021 1,211,068 $ 3.19 8.66 $ 321 Options vested and exercisable as of December 31, 2021 301,862 $ 3.19 7.94 $ 182 The grant date fair value of options granted during the year ended December 31, 2021 was $ 2.1 million. As of December 31, 2021, the unrecognized compensation cost related to outstanding stock options was $ 2.0 million, which is expected to be recognized as expense over approximately 2.4 years. F- 18 During July 2021, the Company granted a director 26,738 restricted stock units with a grant date fair value of $ 100,000 , resulting in a fair value per share of $ 3.74 . Subject to the director’s continued service, the restricted stock units shall vest upon the one-year anniversary of the date of grant. As of December 31, 2021, the unrecognized compensation cost related to outstanding restricted stock units was approximately $ 54,000 , which is expected to be recognized as expense over approximately 7 months. The Company has recorded stock-based compensation expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the years ended December 31, 2020 and 2021 (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2021 Research and development $ 174 $ 721 General and administrative 58 245 Total stock-based compensation $ 232 $ 966 Fair Value of Stock Options The assumptions are based on the following for each of the periods presented: Expected Term - The expected term is calculated using the simplified method which is used when there is insufficient historical data about exercise patterns and post-vesting employment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method. Common Stock Fair Value - The fair value of the common stock underlying the Company’s stock options prior to the IPO was estimated at each grant date and was determined on a periodic basis and based either on transactions with third parties in which common stock was sold for cash or with the assistance of an independent third-party valuation expert. Subsequent to our IPO, the fair value underlying the Company’s common stock is determined based on the public market closing price on each date of grant. The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of significant levels of management judgment. Volatility - The expected volatility being used is derived from the historical stock volatilities of a representative industry peer group of comparable publicly listed companies over a period approximately equal to the expected term of the options. Risk-free Interest Rate - The risk-free interest rate is based on median U.S. Treasury zero coupon issues with remaining terms similar to the expected term on the options. Expected Dividend - The Company has never declared nor paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero. The following averaged assumptions were used to calculate the fair value of awards granted to employees, directors and non-employees for the years ended December 31, 2020 and 2021: Year Ended December 31, 2020 Year Ended December 31, 2021 Expected volatility 114.00 % 101.00 – 105.00 % Risk-free interest rate 0.44 - 0.51 % 0.61 – 1.34 % Dividend yield - % - % Expected term 6.25 years 5.13 – 6.25 years F- 19 11. Income Taxes A reconciliation of the provision for income taxes to the amount computed by applying the statutory income tax rate of 21 % to the net loss is summarized for the years ended December 31, 2020 and 2021 is as follows: Year Ended Year Ended December 31, 2020 December 31, 2021 Income taxes (benefit) at statutory rates 21.00 % 21.00 % State income tax (benefit), net of federal benefit 6.20 - Change in valuation allowance ( 26.30 ) ( 16.27 ) Interest on convertible notes ( 2.20 ) ( 2.22 ) Others 1.30 ( 2.51 ) Effective income tax rate - % - % For the years ended December 31, 2020 and 2021, the Company did not record a deferred income tax expense or benefit. Income tax expense has been nominal for the years ended December 31, 2020 and 2021. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax basis of existing assets and liabilities and operating loss carryforward, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such loss carryforward and deferred tax asset will not be realized. Significant components of the Company’s deferred tax assets at December 31, 2020 and 2021 are shown below (in thousands): December 31, December 31, 2020 2021 Deferred tax assets: Stock-based compensation $ 71 $ 226 Net operating losses carryforwards 1,072 2,257 Depreciation and Amortization 63 468 Accrued expenses 251 135 Gross deferred tax assets 1,457 3,086 Less: Valuation allowance ( 1,457 ) ( 3,086 ) Deferred tax assets, net of valuation allowance $ - $ - The valuation allowance increased by $ 1.6 million during the year ended December 31, 2021. We have concluded, based upon ASC 740, that it is more likely than not we will not realize any benefit from the deferred tax assets related to certain Federal and state’s net operating loss and credit carryforward. Accordingly, the Company has established a full valuation allowance against its Federal and state deferred tax assets. As of December 31, 2021, the Company had available Federal and California net operating loss carryforwards of approximately $ 9.5 million and $ 3.9 million to reduce future taxable income, if any. Federal net operating losses generated prior to 2018 and all state net operating losses generated expire in varying amounts beginning in 2037. These net operating losses, generated after 2017, do not expire and will be able to offset 80% of taxable income generated in the future. As of December 31, 2021, the Company had research and development credit carryforwards of approximately $ 900 and $ 100,000 available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. These credits have been provided a full reserve under ASC 740-10. The federal credit carryforwards begin to expire in 2037, and the state credit carryforwards can be carried forward indefinitely. F- 20 Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. The effect of an ownership change would be the imposition of annual limitation on the use of net operating loss (“NOL”) carryforwards attributable to periods before the change in ownership. An assessment of such ownership changes under Section 382 of the Code was not completed through December 31, 2021 and, as such the Company is not able to determine the impact on the NOLs and tax credit carryforwards, if any, as of the date of the financial statements. To the extent that an assessment is completed in the future, the Company’s ability to utilize tax attributes could be restricted on a year-by-year basis and certain attributes could expire before they are utilized. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. Due to the Company’s history of NOLs, the CARES Act is not expected to have a material impact on the Company’s financial statements. The Company applies the guidance under ASC 740, subtopic 10-50-15, Unrecognized Tax Benefit Related Disclosures (formerly FASB Interpretation 48, Accounting for Uncertainty in Income Taxes). For benefits to be realized, a tax position must be more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 % likely of being realized upon settlement. This interpretation also provides guidance on measurement, de-recognition, classification, interest and penalties. The following table summarizes the changes to the Company’s gross unrecognized tax benefits for the years ended December 31, 2020 and 2021 (in thousands): Year Ended December 31, Year Ended December 31, 2020 2021 Beginning balance $ 12 $ 29 Additions related to current year positions 17 72 Ending balance $ 29 $ 101 As of December 31, 2020 and 2021, the total unrecognized tax benefit was approximately $ 29,000 and $ 101,000 , respectively. The Company does not expect any material changes to the estimated amount of liability associated with its uncertain tax positions within the next 12 months. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021, the Company had no accrued interest and penalties related to uncertain tax positions. The Company files U.S. and state income tax returns with varying statutes of limitations. Tax years 2017 and forward remain open to examination due to the carryover of NOL carryforwards. There are no ongoing examinations by taxing authorities at this time. F- 21 12. Net loss per share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2020 Year Ended December 31, 2021 Numerator: Net loss $ ( 2,264 ) $ ( 10,017 ) Denominator: Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted 8,499,687 11,675,750 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.27 ) $ ( 0.86 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: Year Ended December 31, 2020 Year Ended December 31, 2021 Options to purchase common stock 786,047 1,211,068 Warrants to purchase common stock - 4,784,193 Total 786,047 5,995,261 13. Subsequent Events On January 6, 2022, the Company entered into a Master Services Agreement with Quotient Sciences Limited, a UK based company that provides drug development and analysis services, for the purpose of performing clinical research in support of UNI-494. On February 9, 2022, the Company entered into a Master Services Agreement with CBCC Global Research Inc., a California based company that provides clinical trial and related service, for the purpose of performing clinical research in support of Renazorb. F- 22 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.