10-Q
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f

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-39692

 

IN8BIO, INC.

(Exact name of Registrant as specified in its Charter)

 

 

Delaware

82-5462585

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

350 5th Avenue, Suite 5330

New York, New York

10118

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (646) 600-6438

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

INAB

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNo

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YesNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

The number of shares of Registrant’s Common Stock outstanding as of August 7, 2022 was 18,838,471.

 

 

 


Table of Contents

 

 

 

Page

PART I

FINANCIAL INFORMATION

 

Item 1.

Condensed Financial Statements (Unaudited)

1

 

Condensed Balance Sheets

1

 

Condensed Statements of Operations

2

 

Condensed Statements of Convertible Preferred Stock, Common Stock and Stockholders’ Equity (Deficit)

3

 

Condensed Statements of Cash Flows

4

 

Notes to Condensed Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

Controls and Procedures

24

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

66

Item 3.

Defaults Upon Senior Securities

67

Item 4.

Mine Safety Disclosures

67

Item 5.

Other Information

67

Item 6.

Exhibits

67

 

Signatures

68

 

i


PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

IN8BIO, INC.

CONDENSED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

 

June 30,

 

 

 

 

 

 

2022

 

 

December 31,

 

 

 

(unaudited)

 

 

2021

 

Assets

 

 

 

 

(Note 2)

 

Current assets

 

 

 

 

 

 

Cash

 

$

25,742

 

 

$

37,021

 

Prepaid expenses and other current assets

 

 

1,257

 

 

 

1,959

 

Total Current Assets

 

 

26,999

 

 

 

38,980

 

Non-current assets

 

 

 

 

 

 

Property and equipment, net

 

 

220

 

 

 

97

 

Construction in progress

 

 

1,405

 

 

 

403

 

Restricted cash

 

 

252

 

 

 

251

 

Right of use assets - financing leases

 

 

453

 

 

 

704

 

Right of use assets - operating leases

 

 

1,413

 

 

 

1,630

 

Other non-current assets

 

 

246

 

 

 

158

 

Total Non-Current Assets

 

 

3,989

 

 

 

3,243

 

Total Assets

 

$

30,988

 

 

$

42,223

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

887

 

 

$

395

 

Accrued expenses and other current liabilities

 

 

1,525

 

 

 

1,235

 

Short-term financing lease liability

 

 

299

 

 

 

392

 

Short-term operating lease liability

 

 

261

 

 

 

234

 

Total Current Liabilities

 

 

2,972

 

 

 

2,256

 

Long-term financing lease liability

 

 

132

 

 

 

269

 

Long-term operating lease liability

 

 

1,316

 

 

 

1,515

 

Total Non-Current Liabilities

 

 

1,448

 

 

 

1,784

 

Total Liabilities

 

 

4,420

 

 

 

4,040

 

Commitments and Contingencies

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

Common stock, par value $0.0001 per share; 490,000,000 shares authorized at June 30, 2022 and December 31, 2021; 18,838,471 and 18,781,242 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

72,581

 

 

 

70,872

 

Accumulated deficit

 

 

(46,015

)

 

 

(32,691

)

Total Stockholders' Equity

 

 

26,568

 

 

 

38,183

 

Total Liabilities and Stockholders' Equity

 

$

30,988

 

 

$

42,223

 

 

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

1


IN8BIO, INC.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

3,504

 

 

$

2,064

 

 

$

5,885

 

 

$

3,310

 

General and administrative

 

3,675

 

 

 

986

 

 

 

7,439

 

 

 

2,103

 

Total operating expenses

 

7,179

 

 

 

3,050

 

 

 

13,324

 

 

 

5,413

 

Loss from operations

 

(7,179

)

 

 

(3,050

)

 

 

(13,324

)

 

 

(5,413

)

Net loss

$

(7,179

)

 

$

(3,050

)

 

$

(13,324

)

 

$

(5,413

)

Net loss attributable to common stockholders (Note 10)

$

(7,179

)

 

$

(3,765

)

 

$

(13,324

)

 

$

(6,834

)

Net loss per share attributable to common stockholders – basic and diluted

$

(0.38

)

 

$

(1.00

)

 

$

(0.71

)

 

$

(1.82

)

Weighted-average number of shares used in computing net loss per common share, basic and diluted

 

18,828,680

 

 

 

3,764,488

 

 

 

18,814,691

 

 

 

3,764,488

 

 

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

2


IN8BIO INC.

CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK, COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share data)

(Unaudited)

 

 

 

Convertible
Preferred Stock
Series A

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Total
Stockholders’ Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance at December 31, 2020

 

 

9,993,727

 

 

$

34,900

 

 

 

 

3,764,488

 

 

$

1

 

 

$

1,458

 

 

$

(18,038

)

 

$

(16,579

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

361

 

 

 

 

 

 

361

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,363

)

 

 

(2,363

)

Balance at March 31, 2021

 

 

9,993,727

 

 

$

34,900

 

 

 

 

3,764,488

 

 

$

1

 

 

$

1,819

 

 

$

(20,401

)

 

$

(18,581

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

392

 

 

 

 

 

 

392

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,050

)

 

 

(3,050

)

Balance at June 30, 2021

 

 

9,993,727

 

 

$

34,900

 

 

 

 

3,764,488

 

 

$

1

 

 

$

2,211

 

 

$

(23,451

)

 

$

(21,239

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

 

18,781,242

 

 

$

2

 

 

$

70,872

 

 

$

(32,691

)

 

$

38,183

 

Stock option exercises

 

 

 

 

 

 

 

 

 

31,025

 

 

 

 

 

 

33

 

 

 

 

 

 

33

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

764

 

 

 

 

 

 

764

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,145

)

 

 

(6,145

)

Balance at March 31, 2022

 

 

 

 

$

 

 

 

 

18,812,267

 

 

$

2

 

 

$

71,669

 

 

$

(38,836

)

 

$

32,835

 

Stock option exercises

 

 

 

 

 

 

 

 

 

26,204

 

 

 

 

 

 

28

 

 

 

 

 

 

28

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

884

 

 

 

 

 

 

884

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,179

)

 

 

(7,179

)

Balance at June 30, 2022

 

 

 

 

$

 

 

 

 

18,838,471

 

 

$

2

 

 

$

72,581

 

 

$

(46,015

)

 

$

26,568

 

 

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

3


 

IN8BIO, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(13,324

)

 

$

(5,413

)

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

 

 

 

 

 

 

Depreciation

 

 

38

 

 

 

44

 

Non-cash stock-based compensation

 

 

1,648

 

 

 

753

 

Amortization of financing lease right-of-use assets

 

 

251

 

 

 

250

 

Amortization of operating lease right-of-use assets

 

 

217

 

 

 

61

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

702

 

 

 

(62

)

Other non-current assets

 

 

(88

)

 

 

 

Accounts payable

 

 

7

 

 

 

(372

)

Accrued expenses and other current liabilities

 

 

290

 

 

 

(221

)

Short-term operating lease liabilities

 

 

27

 

 

 

62

 

Long-term operating lease liabilities

 

 

(199

)

 

 

(70

)

Net cash used in operating activities

 

 

(10,431

)

 

 

(4,968

)

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(9

)

 

 

 

Construction in progress

 

 

(669

)

 

 

 

Net cash used in investing activities

 

 

(678

)

 

 

 

Financing activities

 

 

 

 

 

 

Principal payments on financing leases

 

 

(230

)

 

 

(248

)

Exercise of common stock options

 

 

61

 

 

 

 

Deferred offering costs paid

 

 

 

 

 

(779

)

Net cash used in financing activities

 

 

(169

)

 

 

(1,027

)

Net decrease in cash and restricted cash

 

 

(11,278

)

 

 

(5,995

)

Cash and restricted cash at beginning of period

 

 

37,272

 

 

 

17,994

 

Cash and restricted cash at end of period

 

$

25,994

 

 

$

11,999

 

 

 

 

 

 

 

 

Cash, end of period

 

$

25,742

 

 

$

11,999

 

Restricted cash, end of period

 

 

252

 

 

 

 

Cash and restricted cash, end of period

 

$

25,994

 

 

$

11,999

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash financing and investing activities:

 

 

 

 

 

 

Purchase of construction in progress in accounts payable

 

$

484

 

 

$

 

Purchase of property and equipment in accounts payable

 

$

1

 

 

$

 

Deferred offering costs included in accounts payable and accrued expenses

 

$

 

 

$

1,020

 

Initial measurement of operating lease right-of-use assets and liabilities

 

$

 

 

$

3,483

 

 

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

4


 

IN8BIO, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION AND NATURE OF OPERATIONS

Organization and Business

IN8bio, Inc. (the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of gamma-delta T cell therapies for the treatment of cancer. The Company’s lead product candidates are currently in Phase 1 clinical trials: INB-200, for the treatment of patients with newly diagnosed glioblastoma (“GBM”), and INB-100, for the treatment of patients with leukemia that are undergoing hematopoietic stem cell transplantation (“HSCT”). In addition, the Company’s DeltEx platform has yielded a broad portfolio of preclinical programs, including INB-300 and INB-400, focused on addressing other solid tumor types.

Incysus, Inc. (“Incysus”) was a corporation formed in the State of Delaware on November 23, 2015 and Incysus, Ltd. was incorporated in Bermuda on February 8, 2016. Incysus was the wholly owned United States subsidiary of Incysus, Ltd. On May 7, 2018, Incysus, Ltd. reincorporated in the United States in a domestication transaction (the “Domestication”) in which Incysus, Ltd. converted into a newly formed Delaware corporation, Incysus Therapeutics, Inc. (“Incysus Therapeutics”). On July 24, 2019, Incysus Therapeutics merged with Incysus. Incysus Therapeutics subsequently changed its name to IN8bio, Inc. in August 2020. Following the Domestication in May 2018 and the merging of Incysus Therapeutics and Incysus in July 2019, the Company does not have any subsidiaries to consolidate. The Company is headquartered in New York, New York.

Coronavirus Pandemic

The ongoing COVID-19 pandemic, including the periods of resurgences of cases relating to the spread of various strains, has had a significant impact, both direct and indirect, on businesses and commerce, as certain worker shortages have occurred, supply chains have been disrupted, and facilities and productions have been suspended. The COVID-19 pandemic has impacted and may continue to impact the clinical sites and startup activities for the Company’s Phase 1/2 clinical trial, including third-party manufacturing and logistics providers, which have disrupted and may continue to disrupt its supply chains and the availability or cost of materials, and it has affected and may continue to affect the Company’s ability to timely initiate, enroll and complete its clinical trials, conduct regulatory activities and operate its business more generally. The ongoing pandemic may impact the timing of regulatory approval of the investigational new drug application for clinical trials, the enrollment of any clinical trials that are approved, the availability of clinical trial materials and regulatory approval and commercialization of our products. The pandemic may also continue to impact the capital markets, inflation expectations and the Company’s ability to access capital, which could negatively impact short-term and long-term liquidity. The full extent to which the pandemic may impact the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including as a result of evolving variants of COVID-19, the duration and intensity of the related effects of the pandemic and the uncertainty of the timing of the broader economic recovery to pre-pandemic levels.

Initial Public Offering

On August 3, 2021, the Company completed its initial public offering (“IPO”) in which it issued and sold 4,000,000 shares of its common stock at a public offering price of $10.00 per share. The Company received net proceeds from the IPO of $32.3 million, after deducting underwriters’ discounts, commissions, and offering-related costs. Upon closing of the IPO, all of the Company's outstanding shares of convertible preferred stock automatically converted into 10,990,065 shares of common stock (see Note 7).

Liquidity and Capital Resources

Through June 30, 2022, the Company funded its operations primarily with proceeds from its Series A convertible preferred stock financing (“Series A Financing”) and with proceeds from its IPO. The Company has incurred recurring losses and negative operating cash flows from operations since its inception, including net losses of $13.3 million and $5.4 million for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, the Company had an accumulated deficit of $46.0 million.

The Company has not yet generated product sales and as a result has experienced operating losses since inception. The Company expects to incur additional losses in the future to conduct research and development and will need to raise additional capital to fully implement management’s business plan. However, if such financing is not available at adequate levels, the Company may need to reevaluate its operating plans. On August 11, 2022, the Company announced the pricing of an underwritten public offering of 5,394,737 shares of its common stock at a public offering price of $1.90 per share, for expected gross proceeds of approximately $10.3 million, before deducting underwriting discounts, commissions and estimated offering expenses (refer to Note 13). Management believes that its existing cash of $25.7 million as of June 30, 2022 will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance of these condensed financial statements.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

The Company’s significant accounting policies, which are disclosed in the audited financial statements for the year ended December 31, 2021 and the notes thereto, are included in the Company’s Annual Report on Form 10-K (the “Annual Report”) that was filed with the Securities and Exchange Commission (“SEC”) on March 17, 2022. Since the date of that filing, there have been no material changes to the Company’s significant accounting policies.

 

Basis of Presentation

The Company has prepared the accompanying condensed financial statements in conformity with generally accepted accounting principles in the United States (“US GAAP”).

Unaudited Interim Financial Information

The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from these condensed financial statements, as is permitted by such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the financial statements and notes thereto in the Company's Annual Report. The results for any interim period are not necessarily indicative of results for any future period. In the opinion of the Company’s management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included.

Use of Estimates

The preparation of condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of expenses during the reporting periods presented. Such estimates and assumptions are used for, but are not limited to, the accrual of research and development expenses, deferred tax assets and liabilities and related valuation allowance, fair value of common stock and stock-based compensation, and the useful lives of property and equipment. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Significant replacements and improvements are capitalized, while maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. The estimated useful lives of the Company’s respective assets are as follows:

 

 

 

Estimated Useful Life

 

Computer equipment

 

 

3 years

 

Furniture

 

 

5 years

 

Laboratory equipment

 

 

3-5 years

 

Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated in accordance with the above guidelines once placed into service. Upon retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is reflected in the statement of operations.

Recently Issued Accounting Standards Updates

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting of Income Taxes ("Topic 740"), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The Company has evaluated this guidance and determined that it does not have a material impact to its condensed financial statements.

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3. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following (in thousands):

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Machinery and equipment

 

$

451

 

 

$

443

 

Furniture and fixtures

 

 

153

 

 

 

 

Less accumulated depreciation

 

 

(384

)

 

 

(346

)

Property and equipment, net

 

$

220

 

 

$

97

 

 

Depreciation expense was $22,000 for the three months ended June 30, 2022 and 2021 and was $38,000 and $44,000 for the six months ended June 30, 2022 and 2021, respectively.

4. CONSTRUCTION IN PROGRESS

Construction in progress consists of the following (in thousands):

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Furniture

 

$

3

 

 

$

77

 

Leasehold improvements

 

 

1,276

 

 

 

200

 

Internal use software not yet in service

 

 

126

 

 

 

126

 

Construction in progress

 

$

1,405

 

 

$

403

 

 

5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Accrued clinical trials

 

$

398

 

 

$

196

 

Accrued compensation

 

 

696

 

 

 

926

 

Accrued other

 

 

431

 

 

 

113

 

Total accrued expenses and other current liabilities

 

$

1,525

 

 

$

1,235

 

 

6. Debt

 

In April 2020, the Company was granted a loan (the “Loan”) in an amount of $0.2 million, pursuant to the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was enacted on March 27, 2020. The Loan, which was in the form of a Note dated April 16, 2020, was scheduled to mature on April 16, 2022 and bore interest at a rate of 1.0% per annum, payable monthly commencing on November 16, 2020. The Loan could be prepaid by the Company at any time prior to maturity with no prepayment penalties.

 

The Company used the entire Loan amount for qualifying expenses.

 

In August 2021, the Company repaid the Loan of $0.2 million in full.

7. CONVERTIBLE PREFERRED STOCK AND Stockholders' Equity

Our amended and restated certificate of incorporation authorizes us to issue up to 490,000,000 shares of common stock, $0.0001 par value per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

Convertible Preferred Stock

 

Upon closing of the IPO, all of the Company's outstanding shares of convertible preferred stock automatically converted into 10,990,065 shares of common stock.

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8. STOCK-BASED COMPENSATION

2018 Equity Incentive Plan

On May 7, 2018, the Company established and adopted the 2018 Equity Incentive Plan (the “2018 Plan”) providing for the granting of stock awards for employees, directors and consultants to purchase shares of the Company’s common stock. Upon the effectiveness of the 2020 Plan (as defined below), the plan was terminated and no further issuances were made under the 2018 Plan, although it continues to govern the terms of any equity grants that remain outstanding under the 2018 Plan.

2020 Equity Incentive Plan

The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by the Board of Directors and the Company’s stockholders and became effective on July 29, 2021. The Board of Directors, or committee thereof, is authorized to administer the 2020 Plan. The 2020 Plan provides for the grant of incentive stock options (“ISOs”) within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended, to employees, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants and any affiliates’ employees and consultants. The number of shares initially reserved for issuance under the 2020 Plan was 2,626,710, which automatically increases on January 1 of each year for a period of 10 years, beginning on January 1, 2022 and continuing through January 1, 2031, in an amount equal to 5% of the total number of shares of common stock outstanding on the last day of the immediately preceding year, or a lesser number of shares determined by the Board of Directors no later than the last day of the immediately preceding year. The maximum number of shares of common stock that may be issued upon the exercise of ISOs under the 2020 Plan will be 13,000,000 shares. On January 1, 2022, the shares reserved for issuance was increased to 3,565,772 shares. As of June 30, 2022, 1,665,445 shares were available for grant pursuant to the 2020 Plan.

2020 Employee Stock Purchase Plan

The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was approved by the Company’s Board of Directors and the Company’s stockholders and became effective on July 29, 2021. A total of 200,000 shares of common stock were initially reserved for issuance under this plan, which automatically increases on January 1 of each year for a period of 10 years, beginning on January 1, 2021 and continuing through January 1, 2031, by the lesser of 1% of the total number of shares of common stock outstanding on the last day of the immediately preceding year; and 400,000 shares, except before the date of any such increase, the Board of Directors may determine that such increase will be less than the amount set forth above. As of December 31, 2021, no shares of common stock had been issued under the 2020 ESPP and 200,000 shares remained available for future issuance under the 2020 ESPP. On January 1, 2022, the shares reserved for issuance was increased to 387,812 shares. The first offering period has not yet been decided by the Company’s Board of Directors or designated committee of the Company’s Board of Directors.

Stock Option Activity

The following is a summary of the stock option award activity during the six months ended June 30, 2022:

 

 

 

Number
of Stock
Options

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term
(in years)

 

 

Aggregate
Intrinsic
Value
(in thousands)

 

Outstanding at December 31, 2021

 

 

2,306,379

 

 

$

6.51

 

 

 

8.99

 

 

$

983

 

Granted

 

 

1,131,950

 

 

 

3.69

 

 

 

 

 

 

 

Exercised

 

 

(57,229

)

 

 

1.07

 

 

 

 

 

 

 

Forfeited

 

 

(63,749

)

 

 

6.83

 

 

 

 

 

 

 

Outstanding at June 30, 2022

 

 

3,317,351

 

 

$

5.63

 

 

 

8.93

 

 

$

280

 

Exercisable at June 30, 2022

 

 

762,447

 

 

$

6.03

 

 

 

8.19

 

 

$

168

 

Options expected to vest as of June 30, 2022