What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 121 added, 113 removed, 400 unchanged (37% of the section changed)

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Forward Looking Statements

This Quarterly Report on Form 10-Q for the three-month

period ended June 30, 2023 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended

(the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

This Quarterly Report on Form 10-Q for the three

months ended September 30, 2023, contains “forward-looking statements” within the meaning of the Securities Act of 1933, as

amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

forward-looking statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization

efforts, business, financial condition, results of operations, strategies or prospects, and other similar matters.

These forward-looking

statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization efforts,

business, financial condition, results of operations, strategies or prospects, and other similar matters.

These forward-looking statements

are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,

statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,

risks and changes in circumstances that are difficult to predict.

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We are a biotechnology company dedicated to developing

treatments for kidney disease that have the potential to offer medical benefit.

treatments for kidney disease that have the potential to offer medical benefits.

Our development programs are focused on the development

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Our net losses were

$7.2 million and $15.4 million for the six months ended June 30, 2022 and 2023, respectively.

As of June 30, 2023, we had an accumulated

deficit of $49.3 million.

We expect that our operating expenses will increase significantly as we advance our product candidates

through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization;

$12.7 million and $22.7 million for the nine months ended September 30, 2022, and 2023, respectively.

As of September 30, 2023, we

had an accumulated deficit of $56.7 million.

We expect that our operating expenses will increase significantly as we advance our

product candidates through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed

to commercialization;

acquire, discover, validate and develop additional product candidates;

obtain, maintain, protect and enforce our intellectual property

obtain, maintain, protect and enforce our

intellectual property portfolio;

and hire additional personnel.

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which we agreed to issue and sell, in a private placement (the “Offering”), 30,190 shares of Series A-1 Convertible Preferred

Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), which offering will result in up to $130 million in

Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), which offering could result in up to $130 million in

gross proceeds and initial upfront funding of $30 million.

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On the tenth (10th) Trading Day (as defined in the Certificate of Designation) following

the announcement of the Stockholder Approval, each share of Series A-1 Preferred Stock shall automatically convert into a Unit.

to the limitations set forth in the Certificate of Designation, at the option of the holder, each share of Series A-2 Preferred Stock,

Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock shall be convertible

into one share of Common Stock.

the announcement of the Stockholder Approval, each share of Series A-1 Preferred Stock automatically converted into a Unit.

the limitations set forth in the Certificate of Designation, at the option of the holder, shares of Series A-2 Preferred Stock, Series

A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock shall be convertible

into Common Stock.

In addition, in connection with the Offering,

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We recognize 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

rendered when control of the promised goods is 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.

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Research and Development Expenses

Substantially all of our research and development

Substantially all our research and development

expenses consist of expenses incurred in connection with the development of our product candidates.

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Results of Operations

Comparison of the Three Months Ended June

Comparison of the Three Months Ended September

30, 2022, and 2023

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Three Months Ended

September 30,

Licensing revenues:

Operating expenses:

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Total other income (expenses)

Licensing Revenues

Licensing revenues of $1.0 million were recorded

for the three months ended September 30, 2022, due to a licensing agreement entered into with Lee’s Pharmaceutical (HK) Limited

in July 2022.

We received an upfront payment of $1.0 million.

There was no comparable revenue earned in the current period.

additional licensing revenue in the future if we negotiate business development arrangements with third parties.

Research and Development Expenses

Research and development expenses increased by

approximately $407,000, or 22%, from approximately $1.9 million for the three months ended June 30, 2022 to approximately $2.3 million

for the three months ended June 30, 2023.

The increase in research and development expenses was primarily due to a $295,000 increase in

drug development costs.

Labor costs increased $107,000 from the prior period.

Consulting and other costs increased $24,000.

Non-cash stock

compensation decreased $20,000.

Research and development expenses decreased by approximately $1.4 million,

or 30%, from approximately $4.8 million for the three months ended September 30, 2022, to approximately $3.4 million for the three months

ended September 30, 2023.

A decrease in drug development costs of approximately $1.9 million was due to completion of significant preclinical

development work in the prior period.

The decrease in development costs was partially offset by increases in labor costs of $156,000 and

non-cash stock compensation costs of $348,000.

General and Administrative Expenses

General and administrative expenses increased

by $279,000, or 16%, from approximately $1.8 million for the three months ended June 30, 2022 to approximately $2.1 million for the three

months ended June 30, 2023 primarily due to an increase of $483,000 in consulting and professional services costs.

Insurance expense for

directors and officers decreased $164,000.

Stock compensation costs decreased $131,000 from the prior period.

Labor, travel, rent, and

other costs increased $91,000.

by $864,000, or 51%, from approximately $1.7 million for the three months ended September 30, 2022, to approximately $2.6 million for

the three months ended September 30, 2023, primarily due to an increase of $392,000 in consulting and professional services costs.

expenses for directors and officers decreased $107,000.

Stock compensation costs increased $316,000 from the prior period.

Labor, travel,

rent, and other costs increased $263,000.

Other Income (Expenses)

Other income (expenses) increased by $0.5 million,

or 100%, from $0 in the three months ended June 30, 2022 to $0.5 million for the three months ended June 30, 2023 due primarily to the

change in fair value of our warrant liability.

In addition, we earned interest income of $234,000 on our cash balance during the three

months ended June 30, 2023.

Comparison of the Six Months Ended June

Other income (expenses) changed by $1.6 million, or 53,600%, from $3,000

in the three months ended September 30, 2022, to $1.6 million for the three months ended September 30, 2023, due primarily to the change

in fair value of our warrant liability.

In addition, we earned interest income of $227,000 on our cash balance during the three months

ended September 30, 2023.

Comparison of the Nine Months Ended September

30, 2022, and 2023

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operations for the periods indicated (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Licensing revenues:

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Licensing Revenues

Licensing revenues increased approximately $0.7

million, or 100%, from the six months ended June 30, 2022 due to an upfront payment of approximately $0.7 million associated with a licensing

agreement entered into with Lotus International Pte Ltd.

Licensing revenues decreased approximately $0.3

million, or 29%, from the nine months ended September 30, 2022, due to a smaller upfront payment of approximately $0.7 million associated

with a licensing agreement entered into with Lotus International Pte Ltd.

in February 2023.

There was no comparable revenue earned in the prior period.

We may earn additional licensing revenue in the future if we negotiate business development arrangements with third parties.

We entered into a licensing agreement with

Lee’s Pharmaceutical (HK) Limited in July 2022 and received an upfront payment of $1.0 million.

Research and Development Expenses

Research and development expenses increased by

approximately $1.5 million, or 40%, from approximately $3.8 million for the six months ended June 30, 2022 to approximately $5.3 million

for the six months ended June 30, 2023.

The increase in research and development expenses was primarily due to a $1.3 million increase

in drug development costs.

Labor costs increased $255,000 from the prior period.

Consulting and other costs increased $28,000.

stock compensation decreased $36,000.

approximately $73,000, or 1%, from approximately $8.6 million for the nine months ended September 30, 2022, to approximately $8.7 million

for the nine months ended September 30, 2023.

The increase in research and development expenses was primarily due to a $439,000 million

increase in labor costs.

Non-cash stock compensation increased $312,000.

The increases were partially offset by a decrease in drug development

costs of $678,000.

General and Administrative Expenses

General and administrative expenses increased

by $522,000, or 15%, from approximately $3.4 million for the six months ended June 30, 2022 to approximately $3.9 million for the six

months ended June 30, 2023 primarily due to an increase of $931,000 in consulting and professional services costs.

Insurance expense for

directors and officers decreased $330,000.

Stock compensation costs decreased $260,000 from the prior period.

Travel, rent, and other

costs increased $181,000.

by $1.4 million, or 27%, from approximately $5.1 million for the nine months ended September 30, 2022, to approximately $6.5 million for

the nine months ended September 30, 2023 primarily due to an increase of $1.3 million in consulting and professional services costs.

costs increased $236,000, and travel, rent, and other costs increased $261,000.

The increases were partially offset by a decrease in insurance

expenses for directors and officers of $436,000.

Other Income (Expenses)

Other income (expenses) decreased by $9.9 million,

or 100%, from $0 in the six months ended June 30, 2022 to $9.9 million for the six months ended June 30, 2023 due primarily to the change

in fair value of our warrant liability.

In addition, we earned interest income of $248,000 on our cash balance during the six months ended

June 30, 2023.

Other income (expenses) changed by $8.3 million, or 276,067%, from

$3,000 in the nine months ended September 30, 2022, to $8.3 million for the nine months ended September 30, 2023 due primarily to the

change in fair value of our warrant liability.

We earned interest income of $475,000 on our cash balance during the nine months ended

September 30, 2023 that was partially offset by a $60,000 increase in interest expense.

Liquidity and Capital Resources

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(“IPO”), on July 13, 2021, we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July

2021 we received approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.

We have used 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.

15, 2021 we received approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering

We have used 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.

Future revenue streams may consist of collaboration

or licensing revenue as well as product sales.

We have generated approximately $0.7 million in licensing revenue during the six months

ended June 30, 2023.

We have generated approximately $0.7 million in licensing revenue during the nine months

ended September 30, 2023.

On March 3, 2023, we entered into a securities

purchase agreement with certain healthcare-focused institutional investors that will provide up to $130.0 million in gross proceeds through

purchase agreement with certain healthcare-focused institutional investors that may provide up to $130.0 million in gross proceeds through

a private placement and that includes initial upfront funding of $30.0 million.

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We have incurred net losses since our inception.

For the six months ended June 30, 2023, we had a net loss of $18.4 million, and we expect to incur substantial additional losses

For the nine months ended September 30, 2023, we had a net loss of $22.7 million, and we expect to incur substantial additional losses

in future periods.

As of June 30, 2023, we had an accumulated deficit of $52.4 million.

We expect to continue incurring losses in the

future and will be required to raise additional capital in the future to complete our clinical trials, pursue product development initiatives

and penetrate markets for the sale of our products.

We believe that we will continue to have access to capital resources through possible

equity offerings, debt financings, corporate collaborations or other means.

There can be no assurance that we will be able to obtain additional

financing on terms acceptable to us, on a timely basis or at all.

If we are unable to secure additional capital, we 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

our cash in amounts sufficient to sustain operations and meet our obligations.

The financial impact associated with the clinical trial

we will be required to run based on recent FDA feedback is uncertain, and we expect to obtain clarifying feedback from the FDA regarding

the scope of the trial in the Fall of 2023.

Based on the Company’s currently anticipated level of expenditures, the Company believes

that it will need funding before the end of the second quarter of 2024 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.

As of September 30, 2023, we had an accumulated deficit of $56.7 million.

We expect to continue incurring losses in

the future and will be required to raise additional capital in the future to complete our clinical trials, pursue product

development initiatives and penetrate markets for the sale of our products.

We believe that we will continue to have access to

capital resources through possible equity offerings, debt financing, corporate collaborations or other means.

There can be no

assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis or at all.

unable to secure additional capital, we 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 our cash in amounts sufficient to sustain operations and meet

our obligations.

The financial impact associated with the clinical trial we will be required to run based on recent FDA feedback is

uncertain, and we expect to obtain clarifying feedback from the FDA regarding the scope of the trial in the Fall of 2023.

the Company’s currently anticipated level of expenditures, the Company believes that it will need funding by the second half of 2024 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

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If we are unable to raise additional funds when needed, we may be required to delay, reduce,

or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others rights

to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit

our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders,

or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others’

rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that

limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders,

which could materially affect our business and financial condition.

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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 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 year ended December 31, 2022, after determining that although a shared office space is no longer utilized,

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The Company has not entered into any additional agreements with

Globavir during the six months ended June 30, 2023.

Globavir during the nine months ended September 30, 2023.

Summary of Cash Flows

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and uses of cash for each of the periods presented below (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Net cash (used in) provided by:

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Net cash used in operating activities was $13.8

million for the six months ended June 30, 2023.

million for the nine months ended September 30, 2023.

Cash used in operating activities was primarily due to the use of funds for development

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The increase in cash used compared to the same period in the prior year is due primarily to increased

research and development activities in 2023, and we expect to continue to incur substantial costs related to our drug candidates.

professional services and labor costs in 2023.

We expect to continue to incur substantial costs related to our drug candidates.

Net cash used in operating activities was $9.6

million for the six months ended June 30, 2022.

million for the nine months ended September 30, 2022.

Cash used in operating activities was primarily due to the use of funds for development

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Net cash used in investing activities was $12,000

for the six months ended June 30, 2023 and was due to the purchase of furniture and fixtures for our corporate office.

for the nine months ended September 30, 2023, and was due to the purchase of furniture and fixtures for our corporate office.

Net cash used in investing activities was $2,000

for the six months ended June 30, 2022 and was due to the purchase of furniture and fixtures for our corporate office.

for the nine months ended September 30, 2022, and was due to the purchase of furniture and fixtures for our corporate office.

Cash Flows from Financing Activities

Net cash provided by financing activities was

$27.8 million during the six months ended June 30, 2023 due primarily to the private placement financing agreement we signed on March

$27.7 million during the nine months ended September 30, 2023, due primarily to the private placement financing agreement we signed on

March 3, 2023.

There were no cash flows provided by financing

activities during the six months ended June 30, 2022.

activities during the nine months ended September 30, 2022.

Critical Accounting Policies, Significant Judgments and Use of Estimates

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policies and estimates to be related to revenue, research and development, stock-based compensation, and warrant liabilities.

value of warrants contingently issued as part of our March 2023 private placement financing represent a material addition to our critical

value of warrants contingently issued as part of our March 2023 private placement financing represents a material addition to our critical

accounting policies and estimates.

There have been no other material changes to our critical accounting policies and estimates during

the three months ended June 30, 2023 from those used for the year ended December 31, 2022.

The below policies represent our critical accounting

the nine months ended September 30, 2023, from those used for the year ended December 31, 2022.

The below policies represent our critical

accounting policies.

Revenue Recognition

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We recognize revenue

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

from product sales or services rendered when control of the promised goods is 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.

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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 2. Management’s Discussion and Analysis