What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 381 added, 263 removed, 527 unchanged (55% of the section changed)

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(in thousands, except for share and per share

September 30,

Current assets:

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Preferred stock:

$ 0.001 par value per share— 10,000,000 shares authorized at December 31, 2021 and June 30, 2022;

no shares issued and outstanding at December 31, 2021 and June 30, 2022

Common stock, $ 0.001 par value per share – 200,000,000 shares authorized at December 31, 2021 and June 30, 2022;

14,996,534 shares issued and outstanding at December 31, 2021, and 15,044,498 shares issued and outstanding at June 30, 2022

$ 0.001 par value per share— 10,000,000 shares authorized at December 31, 2021 and September 30, 2022;

no shares issued and outstanding at December 31, 2021 and September 30, 2022

Common stock, $ 0.001 par value per share – 200,000,000 shares authorized at December 31, 2021 and September 30, 2022;

14,996,534 shares issued and outstanding at December 31, 2021, and 15,087,943 shares issued and outstanding at September 30, 2022

Additional paid-in capital

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Licensing revenues:

Operating expenses:

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Loss from operations

Other expenses:

Other income (expenses):

Interest expense

Loss on debt conversion

Gain on extinguishment of debt

Total other expenses

Total other income (expenses)

Net loss per share, basic and diluted

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Balance at June 30, 2021

Issuance of common stock for cash, net of $ 2.7 million offering costs

Conversion of convertible notes into common stock

Issuance of common stock for exercise of options

Issuance of common stock for anti-dilution clause

Stock-based compensation expense

Balance at September 30, 2021

Preferred Stock

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Balance at June 30, 2022

Issuance of common stock for vested restricted stock units

Issuance of common stock for exercise of options

Stock-based compensation expense

Balance at September 30, 2022

See accompanying notes to the financial statements

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(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

R&D Expense for issuance of common stock for anti-dilution clause

Depreciation expense

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Deferred compensation to CEO

Loss on debt conversion

Changes in assets and liabilities:

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Cash flows from financing activities

Net proceeds from initial public offering

Proceeds from loan from stockholder

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Repayment of loan from stockholder

Deferred offering costs

Proceeds from exercise of options

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Supplemental cash flow information

Deferred offering costs included in accrued liabilities

Deferred preclinical charges included in prepaid expenses and other current assets

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and inflammation.

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 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.

Future revenue streams may consist of collaboration or licensing revenue as well as product

The Company has generated approximately $ 1.0 million in licensing revenue to date.

The Company has incurred operating losses and

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As the Company increases its research and development activities, the operating losses are expected to increase.

has historically relied on private equity offerings, debt financings and loans from a stockholder to fund its operations.

The Company has

historically relied on private equity offerings, debt financings and loans from a stockholder to fund its operations.

As of December 31,

31, 2021 and June 30, 2022, the Company had an accumulated deficit of $ 15.9 million and $ 23.1 million, respectively.

2021 and September 30, 2022, the Company had an accumulated deficit of $ 15.9 million and $ 28.7 million, respectively.

As a result of its initial public offering (“IPO”),

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approximately $ 22.3 million in net proceeds after deducting the underwriting discounts, commissions and other offering expenses.

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

is using 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

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January 2021 through May 2021, the Company received an aggregate of $ 1.1 million upon the issuance of convertible notes.

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.

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.

can be no assurance that the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis

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 $ 10.6 million as of June 30, 2022, the Company believes that it will need funding before the end of the second quarter 2023

to continue operations, satisfy its obligations and fund the future expenditures that will be required to conduct the clinical and regulatory

work to develop its product candidates.

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 $ 7.0

million as of September 30, 2022, the Company believes that it will need funding before the end of the first quarter 2023 to continue

operations, satisfy its obligations and fund the future expenditures that will be required to conduct the clinical and regulatory work

to develop its product candidates.

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement

of liabilities and commitments in the normal course of business.

prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of

liabilities and commitments in the normal course of business.

There is substantial doubt about the Company’s ability to continue

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The accompanying unaudited financial statements

of the Company as of June 30, 2022 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X

and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in

of the Company as of September 30, 2022 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation

S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted

The Company believes the footnotes and other disclosures made in the financial statements are adequate

for a fair presentation of the results of the interim periods presented.

The financial statements include all adjustments (solely of

a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading.

The financial statements include all adjustments (solely of a

normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading.

read these financial statements and the accompanying notes in conjunction with the financial statements and notes thereto included in

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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.

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.

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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.

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:

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;

advances and trends in new technologies and industry

results of clinical trials;

regulatory approval and market acceptance of the Company’s products;

of sales channels;

development of sales

certain strategic relationships;

litigation or claims against the Company related to intellectual property, product,

regulatory, or other matters;

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.

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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

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 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.

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

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

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cost less accumulated depreciation.

Additions, improvements, and major renewals or replacements that substantially extend the useful

life of an asset are capitalized.

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.

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fair value at that time.

At June 30, 2022, management determined there were no impairments of the Company’s property and equipment.

At September 30, 2022, management determined there were no impairments of the Company’s property and equipment.

The Company determines whether a contract is,

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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, 2021 and June 30, 2022 due to their short-term nature.

cash, prepaid expenses, and accounts payable, and in prior periods also included 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, 2021 and September

30, 2022 due to their short-term nature.

Concentration of Credit Risk

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These costs are amortized over specific time periods based on the agreements.

Revenue Recognition

The Company implemented ASC 606, Revenue from

Contracts with Customers.

These included the development of new policies based on the five-step model provided in the new revenue standard,

ongoing contract review requirements, and gathering of information provided for disclosures.

The Company recognizes revenue from product

sales or services rendered when control of the promised goods are transferred to a counterparty in an amount that reflects the consideration

to which we expect to be entitled in exchange for those goods and services.

To achieve this core principle, we apply the following five

identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate

the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance

Research and Development Expenses

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and development expenses consist of expenses incurred in connection with the development of the Company’s product candidates.

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

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.

The Company expenses both internal and external research and development expenses as they are incurred.

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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.

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

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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.

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.

Current and non-current tax assets and liabilities

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interest or penalties related to income tax matters in income tax expense.

The Tax Cuts and Jobs Act of 2017 eliminated

the option to immediately deduct research and development expenditures in the year incurred under Section 174, which became effective

January 1, 2022.

We are monitoring legislation for any further changes to Section 174 and the impact, if any, to the financial statements

The Tax Cuts and Jobs Act of 2017 eliminated the

option to immediately deduct research and development expenditures in the year incurred under Section 174, which became effective January

We are monitoring legislation for any further changes to Section 174 and the impact, if any, to the financial statements in 2022.

Comprehensive Loss

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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.

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

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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

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

Additionally, among other changes,

the guidance eliminates certain of the conditions for equity classification for contracts in an entity’s own equity.

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.

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Early adoption is permitted, but no earlier than annual periods beginning after December

The Company adopted the standard on January 1, 2022, and the adoption did not have a material effect on the Company’s

financial statements.

The Company adopted the standard on January 1, 2022 using a modified approach, and the adoption did not result in any adjustments

on the Company’s financial statements.

In February 2016, the FASB issued ASU 2016-02,

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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.

Thereafter, the Company

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 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.

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

(“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.

On July 13, 2021, the Company’s initial public offering 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

This issuance represented 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.

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.

On July 13, 2021, the Company’s initial public offering 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

represented 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.

In August 2022, the Company received

an upfront payment of approximately $ 1.0 million as a result of a sublicense development agreement with Lee’s Pharmaceutical (HK) Limited.

The payment represents sublicense income as described in the Spectrum Agreement, and 20 % of the amount received has been accrued as an

R&D expense in the accompanying statements of operations for the three and nine months ended September 30, 2022.

On July 19, 2021, the Company entered into an

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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.

Related payments totaling approximately $ 1.2 million have been paid

to Syneos as of June 30, 2022, and approximately $ 0.7 million of this amount is recorded as prepaid expense in the accompanying balance

sheet as of June 30, 2022.

On January 6, 2022, the Company entered into

a Master Services Agreement with Quotient Sciences Limited (“Quotient”), a UK based company that provides drug development

and analysis services, for the purpose of performing clinical research in support of UNI-494.

The budget for the initial study is

approximately $ 3.2 million.

Related payments totaling approximately $ 0.4 million have been paid to Quotient as of June 30, 2022, and

approximately $ 0.1 million of this amount is recorded as prepaid expense in the accompanying balance sheet as of June 30, 2022.

The budget for the services, which also includes clinical pharmacology, translational sciences,

and bioanalytical services, is approximately $ 2.3 million.

Related payments totaling approximately $ 1.2 million have been paid to Syneos

as of September 30, 2022, approximately $ 2.0 million of related expense has been recorded, and approximately $ 0.8 million has been recorded

as accounts payable or accrued expense in the accompanying balance sheet as of September 30, 2022.

On January 6, 2022, the Company entered into a

Master Services Agreement with Quotient Sciences Limited (“Quotient”), a UK based company that provides drug development and

analysis services, for the purpose of performing clinical research in support of UNI-494.

The budget for the study is approximately

$ 3.7 million.

Related payments totaling approximately $ 1.3 million have been paid to Quotient as of September 30, 2022, approximately

$ 0.5 million of related expense has been recorded, and approximately $ 0.8 million has been recorded as prepaid expense in the accompanying

balance sheet as of September 30, 2022.

On February 9, 2022, the Company entered into

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and related services, for the purpose of performing clinical research in support of Renazorb.

The budget for the initial study is approximately

The budget for the initial study was approximately

$ 1.4 million.

Related payments totaling approximately $ 0.3 million have been paid to CBCC as of June 30, 2022, and approximately $ 0.1

million of this amount is recorded as prepaid expense in the accompanying balance sheet as of June 30, 2022.

Payments relating to the initial agreement totaling approximately $ 0.3 million have been paid to CBCC as of September 30,

2022, and approximately $ 0.4 million of related expense has been recorded.

In September 2022, a statement of work revised the remaining

services budget to approximately $ 0.1 million.

On June 29, 2022, the Company entered into an

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in support of Renazorb.

The budget for the initial study is approximately $ 0.8 million.

No related payments have been paid to Inotiv

as of June 30, 2022.

The budget for the services is approximately $ 1.0 million.

Approximately $ 0.3 million has been paid to Inotiv

as of September 30, 2022 and approximately $ 0.2 million has been recorded as prepaid expense in the accompanying balance sheet as of September

On July 14, 2022, the Company entered into a license

agreement with Lee’s Pharmaceutical (HK) Limited (see Note 4).

Under the terms of the agreement, Lee’s Pharmaceutical will be responsible

for development, registration filing and approval for Renazorb in China, Hong Kong, and certain other Asian markets.

In addition, Lee’s

Pharmaceutical will have sole responsibility for the importation of the drug product from the Company and for the costs of commercialization

of Renazorb in the licensed territories.

The Company has received an upfront payment of $ 1.0 million, expects to receive up to $ 1.0 million

in milestone payments upon product launch in China and will be eligible for tiered royalties of between 7 % and 10 % upon achievement of

prespecified regulatory and commercial achievements.

On July 27, 2022, the Company entered into an

Agreement with Celerion, a Nebraska based company that provides clinical trial and related services, for the purpose of performing research

in support of Renazorb.

The budget for the services is approximately $ 2.7 million.

Approximately $ 0.8 million has been paid to Celerion

as of September 30, 2022.

$ 1.4 million has been recorded as prepaid expense with $ 0.6 million recorded in accounts payable based on contractual

terms for future clinical services as of September 30, 2022.

Licensing Revenues

On July 14, 2022, the Company entered into a license

agreement (“Agreement”) with Lee’s Pharmaceutical (HK) Limited (“Lees”).

Under the terms of the agreement, Lee’s

Pharmaceutical will be responsible for development, registration filing and approval for Renazorb in China, Hong Kong, and certain other

Asian markets.

In addition, Lees will have sole responsibility for the importation of the drug product from the Company and for the costs

of commercialization of Renazorb in the licensed territories.

Both parties agreed to enter into a separate manufacturing and supply agreement

whereby Unicycive will supply Lees with Renazorb product.

The Company has received an upfront payment of approximately $ 1.0 million, expects

to receive up to $ 1.0 million in milestone payments upon product launch in China and will be eligible for tiered royalties of between

7 % and 10 % upon achievement of prespecified regulatory and commercial achievements.

The Company has evaluated the Agreement in accordance

with FASB Topics 808 – Collaborative Arrangements and 606 -Revenue for Contracts from Customers.

The Company first assessed whether

the contractual arrangement is within the scope of ASC 808 which defines a collaborative arrangement as a contractual arrangement that

involves a joint operating activity.

Under ASC 606, the counterparty is considered a customer only if it is acquiring goods or services

that are an output of the entity’s “ordinary activities”.

The Agreement is consistent with the Company’s current

ongoing operations, which is an operating model adopted by many early-stage biotech companies.

The license portion of the contract as

well as the future potential transactions under a manufacturing and supply agreement both represent a vendor-customer relationship.

The Company does not believe that its promise

to provide goods under a future manufacturing and supply agreement represents a material right to Lees, and therefore the promise does

not represent current performance obligation.

The Company has concluded the agreement contains one performance obligation – the

ASC 606 indicates that constrained variable consideration

should be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative

revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Variable consideration

consisting of milestone payments and sales-based royalties may be received based on the completion of certain clinical, regulatory, and

commercial activities.

The Company has concluded that the future milestone payments should be excluded from the transaction price due

to the uncertainty of achievement as of September 30, 2022.

The Company will reassess this conclusion at each reporting date until the

uncertainties are resolved.

For the sales-based royalty payments, guidance

requires an entity to recognize revenue for a sales-based royalty promised in exchange for a license of intellectual property only when

the later of 1) the subsequent sale or usage occurs, or 2) the performance obligation to which some or all the sales-based or usage-based

royalty has been allocated has been satisfied or partially satisfied.

The Company has concluded that the future sales-based royalties

should be excluded from the transaction price as of September 30, 2022.

The Company will reassess this conclusion at each reporting date.

The Company has concluded that at contract inception

the total transaction price is the $ 1.0 million upfront fee.

The Company has concluded that the license of

the Renazorb IP is functional IP as it contains all the necessary information for Lees to develop for commercialization in the Territory.

Unicycive’s ongoing activities do not significantly affect the standalone functionality of the IP.

In addition, the functionality

of the IP is not expected to substantially change during the license period based on Unicycive’s activities.

The revenue should

therefore be recognized at a point in time.

This intellectual property was transferred to Lees in July 2022, and the Company has recognized

$ 1.0 million in the accompanying statements of operations as licensing revenue for the three and nine months ended September 30, 2022.

Balance Sheet Components

Prepaid expenses and other current assets as

of December 31, 2021 and June 30, 2022 consisted of the following (in thousands):

Prepaid expenses and other current assets as of

December 31, 2021 and September 30, 2022 consisted of the following (in thousands):

September 30,

Prepaid directors and officers liability insurance premiums

1 unchanged sentence

Property, plant and equipment as of December 31,

31, 2021 and June 30, 2022 consisted of the following (in thousands):

2021 and September 30, 2022 consisted of the following (in thousands):

September 30,

Leasehold improvements

1 unchanged sentence

Less accumulated depreciation

Accounts payable as of December 31, 2021 and

June 30, 2022 consisted of the following (in thousands):

Accounts payable as of December 31, 2021 and September

30, 2022 consisted of the following (in thousands):

September 30,

Trade accounts payable

1 unchanged sentence

Accrued liabilities as of December 31, 2021 and

June 30, 2022 consisted of the following (in thousands):

September 30, 2022 consisted of the following (in thousands):

September 30,

Accrued labor costs

5 unchanged sentences

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 or June 30, 2022.

the three and six months ended June 30, 2022, the Company reflected amortization of right-of-use asset of approximately $ 38,000 and $ 75,000 ,

respectively, resulting in a right of use asset balance at June 30, 2022 of $ 230,000 .

During the six months ended June 30, 2022, the

Company made cash payments on the lease of approximately $ 85,000 towards the lease liabilities.

As of June 30, 2022, the total lease

liability was $ 232,000 .

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 three and six months

ended June 30, 2022 was approximately $ 43,000 and $ 86,000 , respectively.

As of June 30, 2022, maturities of the Company’s

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 or September 30, 2022.

During the three

and nine months ended September 30, 2022, the Company reflected amortization of right-of-use asset of approximately $ 39,000 and $ 114,000 ,

respectively, resulting in a right of use asset balance at September 30, 2022 of $ 191,000 .

During the nine months ended September 30, 2022,

the Company made cash payments on the lease of approximately $ 127,000 towards the lease liabilities.

As of September 30, 2022, the total

lease liability was $ 194,000 .

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 three and nine

months ended September 30, 2022 was approximately $ 42,000 and $ 129,000 , respectively.

As of September 30, 2022, maturities of the Company’s

lease liabilities are as follows (in thousands, unaudited):

Operating Lease

Year ending December 31, 2022

16 unchanged sentences

“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.

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 accounted for the 2021 Notes as stock-settled

7 unchanged sentences

$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.

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

23 unchanged sentences

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 six months ended June 30, 2021.

in February 2021, and recorded a gain on extinguishment of debt in the statement of operations for the nine months ended September 30,

Related Party Transactions

1 unchanged sentence

The Company received advances from the stockholder

of $ 236,000 during the six months ended June 30, 2021.

The Company repaid amounts owed to the stockholder of $ 144,000 during the six

months ended June 30, 2021.

The Company repaid all amounts owed to the stockholder during the year ended December 31, 2021.

of $ 248,000 during the nine months ended September 30, 2021.

The Company repaid all remaining amounts owed to the stockholder of $ 1,361,000

during the nine months ended September 30, 2021.

Service agreement with Globavir

6 unchanged sentences

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”).

provides administrative and consulting services and shared office space and other costs in connection with the Company’s drug development

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.

During the fourth quarter of 2021, after initially 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.

During the six months ended June 30, 2022, after determining that although a shared office

space is no longer utilized, consulting services continued to be provided, the Company amended the Service Agreement to reflect the consulting

services at a reduced service fee of $ 6,000 per month and a termination date of June 30, 2022.

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

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.

fourth quarter of 2021, after initially 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.

During the nine months ended September 30,

2022, after determining that although a shared office space is no longer utilized, consulting services continued to be provided, the Company

amended the Service Agreement to reflect the consulting services at a reduced service fee of $ 6,000 per month and a termination date of

June 30, 2022.

Commitments and Contingencies

2 unchanged sentences

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.

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.

31 unchanged sentences

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.

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

6 unchanged sentences

The following table summarizes activity for warrants

for the six months ended June 30, 2022:

for the nine months ended September 30, 2022:

(in thousands)

2 unchanged sentences

Warrants exercised

Outstanding, June 30, 2022

Outstanding, September 30, 2022

Voting Rights of Common Stock

2 unchanged sentences

Preferred Stock

As of December 31, 2021 and June 30, 2022, 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

As of December 31, 2021 and September 30, 2022,

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.

33 unchanged sentences

The following table summarizes activity for stock

options under all plans for the six months ended June 30, 2022:

options under all plans for the nine months ended September 30, 2022:

(in thousands)

3 unchanged sentences

Options exercised

Outstanding, June 30, 2022

Options vested and exercisable as of June 30, 2022

Outstanding, September 30, 2022

Options vested and exercisable as of September 30, 2022

The grant date fair value of options granted during

the six months ended June 30, 2022 was $ 8,000 .

As of June 30, 2022, the unrecognized compensation

the nine months ended September 30, 2022 was $ 11,000 .

As of September 30, 2022, the unrecognized compensation

cost related to outstanding stock options was $ 1.3 million, which is expected to be recognized as expense over approximately 2.1 years.

2 unchanged sentences

A portion of these

options were exercised early (prior to vesting), and as of June 30, 2022, 28,433 of the options remained unvested.

Proceeds received related

to the unvested options of approximately $46,000 at June 30, 2022 were recorded 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.

Proceeds received related to the vested portion of options of $37,000 and $15,000 were reclassified to equity during the six-month periods

ended June 30, 2021 and 2022, respectively.

The vested portion of the exercises was 355,281 shares at June 30, 2022.

options were exercised early (prior to vesting), and as of September 30, 2022, 11,726 of the options remained unvested.

Proceeds received

related to the unvested options of approximately $38,000 at September 30, 2022 were recorded 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.

Proceeds received related to the vested portion of options of $51,000 and $22,000 were reclassified to equity during the

nine-month periods ended September 30, 2021 and 2022, respectively.

The vested portion of the exercises was 371,988 shares at September

The Company has recorded stock-based compensation

expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the three and six months

ended June 30, 2021 and 2022 (in thousands):

expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the three and nine months

ended September 30, 2021 and 2022 (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

11 unchanged sentences

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 initial public offering 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.

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 .

Common Stock Fair Value –

The fair value of the common stock underlying the Company’s stock options prior to the initial public offering 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.

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

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 six months ended June 30, 2021 and 2022:

Six Months Ended

calculate the fair value of awards granted to employees, directors and non-employees for the nine months ended September 30, 2021 and

Nine Months Ended

September 30,

Expected volatility

102.00 – 105.00

101.00 - 105.00

Risk-free interest rate

6 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Options to purchase common stock

1 unchanged sentence

Subsequent events

On July 14, 2022, the Company entered into a license agreement with

Lee's Pharmaceutical (HK) Limited.

Under the terms of the agreement, Lee’s Pharmaceutical will be responsible for development, registration

filing and approval for Renazorb in China, Hong Kong, and certain other Asian markets.

In addition, Lee’s Pharmaceutical will have

sole responsibility for the importation of the drug product from the Company and for the costs of commercialization of Renazorb in the

licensed territories.

The Company has received an upfront payment of $ 1.0 million, expects to receive up to $ 1.0 million in milestone

payments upon product launch in China and will be eligible for tiered royalties upon achievement of prespecified regulatory and commercial

achievements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements