Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Unaudited Condensed Interim Financial Information The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in unaudited condensed interim financial statements prepared in accordance with GAAP have been condensed or omitted. The unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal, recurring adjustments that are necessary to present fairly the Company’s results for the interim periods presented. The condensed balance sheet as of December 31, 2023, is derived from the Company’s audited financial statements. The results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). There have been no material changes to the significant accounting policies during the nine months ended September 30, 2024 from those previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 1, 2024 (the “2023 Annual Report”) other than the accounting policies adopted in connection with the Company’s private placement offerings and the September Common Warrants as follows. In January and April of this year, the Company completed two private placement offerings issuing Common Stock, Pre-funded Common Warrants, Common Warrants and Placement Agent Warrants or (“PA Warrants”). The Company has applied the following accounting policies as it relates to each offering. January 2024 Private Placement The Company evaluated the Common Warrants and the PA Warrants issued in connection with the January offering in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging – Contracts in Entity’s Own Entity April 2024 Private Placement The Company evaluated the Pre-funded Common Warrants, Common Warrants, (Series A and Series B), and the PA Warrants issued in connection with the April offering in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging – Contracts in Entity’s Own Entity Earnings Per September 2024 Contract Manufacturing Organization Warrants In September 2024, the Company has issued a warrant to purchase up to 709,500 shares of the Company’s common stock (the “CMO Warrant”) as a performance incentive for the Company’s RenovoCath contract manufacturing organization, (“CMO”). The CMO Warrant vests and only becomes exercisable over time in tranches, and only if the CMO achieves certain manufacturing milestones. The Company evaluated the CMO Warrant in accordance with ASC 718, Compensation – Stock Compensation, and concluded the CMO Warrant constitutes share-based payments for goods used in the Company’s operations and the CMO Warrant is equity-classified, as it lacks characteristics that would require liability treatment, such as cash settlement provisions or obligations to repurchase shares. The fair value of the CMO Warrant will be measured using the Black-Scholes model, with grant date fair value determined by the award terms. As the CMO Warrant is an incentive under the Company’s commercial strategy for its RenovoCath device, the fair value of the CMO Warrant will be considered as part of the costs to produce the device as inventory and subsequently recognized as cost of sales upon the sale of associated goods. For the EPS treatment, management concluded that the CMO Warrant constitutes contingently issuable potential common shares. When shares are issued upon exercise of the CMO Warrant, the Company will assess dilutive effects per ASC 260, Earnings Per Share. Following ASC 260-10-45-22, the treasury stock method will apply, assuming warrant exercise at the start of each period (or issuance if later), and calculating incremental shares based on proceeds hypothetically used to repurchase shares at the average market price. Since the holder of the CMO Warrant does not participate in dividends with common stock pre-exercise, the shares of common stock underlying the CMO Warrant does not affect basic EPS until exercised. Risks and Uncertainties The Company is subject to a number of risks associated with companies at a similar stage, including the risks associated with the development of products that must receive regulatory approval before market launch, dependence on key individuals, competition from larger and more established companies, volatility of the industry, ability to obtain adequate financing to support the Company’s business plan, the ability to attract and retain additional qualified personnel to manage the anticipated growth of the Company and general economic conditions. The Company is subject to a number of risks similar to other clinical-stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical studies or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain regulatory and marketing approvals and insurance coding for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, protection of its proprietary technology, and the need to secure and maintain adequate manufacturing arrangements with third parties. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses as well as the disclosure of contingent assets and liabilities, at the date of the financial statements during the reporting periods. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to, accruals of certain liabilities, including clinical trial accruals and other contingences, the valuation of financial instruments, the fair value of the Company’s common stock and the fair value of options granted under the Company’s equity incentive plan. On an ongoing basis, the Company evaluates its estimates, including those related to the fair values of assets, stock-based compensation, clinical trial accruals and other contingencies. Management bases its estimates on historical experience or on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from these estimates. Emerging Growth Company and Smaller Reporting Company Status The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from complying with new or revised financial accounting standards until private companies are required to comply with those standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards. The Company is also a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act. If the Company is a smaller reporting company at the time the Company ceases to be an emerging growth company, the Company may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, the Company may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and, like emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional disclosures and disaggregation of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09, “Improvement to income tax disclosures (Topic 740)”. ASU 2023-09 requires consistent categories and greater disaggregation of information in the income tax rate reconciliation as well as a disaggregation of taxes paid by jurisdiction for the income taxes paid. ASU 2023-09 is required to be adopted by the Company for annual periods beginning after December 15, 2024. Early adoption is permitted for annual consolidated financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of the ASU, but does not expect any material impact upon adoption. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” ASU 2023-07 is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses, as well as how the chief operating decision maker uses the reported measure(s) of segment profit or loss in assessing performance. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this new guidance on its financial statements and disclosures. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)” “ASU 2016-13”) . In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20)” and “Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (ASU 2020-06): Accounting for Convertible Instruments and Contracts in an Entity,” which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The updated guidance is effective on a prospective basis for annual reporting periods beginning after December 15, 2023 and for interim periods within those periods. The Company early adopted this guidance as of January 1, 2022 and the pronouncement did not have any material impact on the Company’s financial position or results of operations. |