| Summary of Significant Accounting Policies | Note
3 – Summary of Significant Accounting Policies Basis
of presentation and principles of consolidation The
accompanying consolidated financial statements include the consolidated accounts of Holdings and its wholly owned subsidiaries, BioPharma,
and Nanotechnologies. The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States (“U.S. GAAP”) and reflect the operations of the Company and its wholly owned subsidiaries.
All intercompany transactions have been eliminated in consolidation. Financial
impact of events beyond our control Our
financial condition and results of operations may be impacted by factors we may not be able to control, such as the COVID-19 or other
pandemic, global supply chain disruptions, global trade disputes and/or political instability. Increases in interest rates, especially
if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty
and heightening these risks. Additionally, rising inflation rates may affect us by increasing operating expenses, such as employee-related
costs and clinical trial expenses, negatively impacting our results of operations. The
Company’s financial results for the year ended December 31, 2022 were not significantly impacted by COVID-19 or other factors beyond
our control, such as those described above. However, the Company cannot predict the impact of any of these factors on future results
or the Company’s ability to raise capital due to a variety of factors, including but not limited to the continued good health of
Company employees, the ability of service providers and suppliers to continue to operate and deliver, the ability of the Company to maintain
operations, and any government and/or public actions taken in response to these factors. Use
of estimates The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates. Significant
items subject to such estimates and assumptions include, but are not limited to, the Company’s research and development expenses,
the assessment of the impairment of goodwill and intangible assets, income tax
valuations and the determination of stock-based compensation. Segment
and geographic information Operating
segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief
operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views
its operations and manages its business in one Cash,
cash equivalents and restricted cash The
Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash
and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable
debt securities. Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds and short-term
U.S. treasury bonds that mature within three months of settlement date. The Company presents restricted cash with cash and cash equivalents
in the Consolidated Statements of Cash Flows. Restricted cash represents funds the Company is required to set aside to cover building
operating leases and other purposes. For a complete disclosure of the Company’s cash, cash equivalents and restricted cash, see
Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities. Marketable
Debt Securities Marketable
debt securities, all of which are available-for-sale, consist of U.S. treasury bonds, U.S. government notes, corporate debt securities
and state and municipal bonds. Marketable debt securities are carried at fair value, with unrealized gains and losses reported as accumulated
other comprehensive (loss)/income, except for losses from impairments which are determined to be other-than-temporary. Realized gains
and losses and declines in value judged to be other-than-temporary are included in the determination of net loss and are included in
other income, net. Fair values are based on quoted market prices at the reporting date. Interest and dividends on available-for-sale
securities are included in other income, net. For a complete disclosure of the Company’s marketable debt securities, see Note 4
– Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities. Concentration
of credit risk The Company’s financial instruments that are exposed to concentrations
of credit risk consist primarily of cash, cash equivalents, restricted cash and marketable debt securities. The Company’s investment
policy is to invest only in institutions that meet high credit quality standards and establishes limits on the amount and time to maturity
of investments with any individual counterparty. Balances are maintained at U.S. financial institutions and may from time to time exceed
the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $ 250 Leasehold
improvements and equipment Leasehold
improvements and equipment are stated at cost less accumulated depreciation and amortization. Depreciation on equipment is computed using
the straight-line method over the estimated useful lives of the assets, which range from three ten years Goodwill
and other intangible assets Goodwill
is recorded when consideration paid for an acquired entity exceeds the fair value of the net assets acquired. Goodwill is not amortized
but rather is assessed for impairment at least annually on a reporting unit basis, or more frequently when events and circumstances indicate
the goodwill may be impaired. U.S. GAAP provides that the Company has the option to perform a qualitative assessment to determine whether
it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If the Company determine this is
the case, the Company can perform further analysis to identify and measure the amount of goodwill impairment loss to be recognized, if
any. A
reporting unit is an operating segment, or one level below an operating segment. Historically, the Company has conducted its business
in a single operating segment and reporting unit. For the years ended December 31, 2022 and 2021, the Company assessed goodwill impairment
by performing a qualitative test for its reporting unit. As part of the qualitative review, the Company considered relevant events and
circumstances, with an emphasis on the fact that the Company’s fair value, as determined by its market capitalization, is well
in excess of its book value. Based on the results of the Company’s assessment, it was determined that it is more-likely-than-not
that its goodwill was not impaired during the years ended December 31, 2022 and 2021. Indefinite
lived intangible assets are composed of in-process research and development (“IPR&D”) and represent projects acquired
in a business combination that have not reached technological feasibility or that lack regulatory approval at the time of acquisition.
These IPR&D assets are reviewed for impairment annually, or sooner if events or changes in circumstances indicate that the carrying
amount of the asset may not be recoverable, and upon establishment of technological feasibility or regulatory approval. An impairment
loss, if any, is calculated by comparing the fair value of the asset to its carrying value. If the asset’s carrying value exceeds
its fair value, an impairment loss is recorded for the difference and its carrying value is reduced accordingly. Similar to the impairment
test for goodwill, the Company may perform a qualitative review of its indefinite-lived intangible assets for impairment. The Company
used the qualitative approach and concluded that it was more-likely-than-not that its indefinite-lived assets were no Leases The
Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 842, “Leases”,
establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance
sheet for all leases with a term longer than 12 months. Leases will be classified as either finance or operating, with classification
affecting the pattern and classification of expense recognition in the income statement. Lessor accounting under the new standard is
substantially unchanged. Additional qualitative and quantitative disclosures are also required. For a complete disclosure of the Company’s
leases, see Note 8 – Leases. Preferred
stock dividends Subject
to provisions detailed more fully in Note 12 - Stockholders’ Equity, shares of Series B Preferred Stock earned dividends at rates
of 10% 15% 20% Income
taxes Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates in the period
that includes the enactment date. The
Company adopted the provisions of ASC 740-10 and has analyzed its filing positions in 2022 and 2021 in jurisdictions where it may be
obligated to file returns. The Company believes that its income tax filing position and deductions will be sustained on audit and does
not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain
income tax positions have been recorded. The Company’s policy is to recognize interest and/or penalties related to income tax matters
in income tax expense. The Company had no Since
the Company incurred net operating losses in every tax year since inception, the 2014 through 2021 income tax returns are subject to
examination and adjustments by the Internal Revenue Service for at least three years following the year in which the tax attributes are
utilized. Fair
Value Measurements As
defined in ASC 820 “Fair Value Measurement”, fair value measurements should be disclosed separately by three levels of the
fair value hierarchy. For assets and liabilities recorded at fair value, it is the Company’s policy to maximize the use of observable
inputs (quoted prices in active markets) and minimized the use of unobservable inputs (the Company’s assumptions) when developing
fair value measurements, in accordance with the established fair value hierarchy. For a complete disclosure of the Company’s fair
value measurements, see Note 5 – Fair Value Measurements. Stock-based
compensation Stock-based
compensation to employees consist of stock option grants and restricted shares. The Company accounts for stock-based compensation under
the provisions of ASC 718-10, Compensation – Stock Compensation The
Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50, Equity-Based
Payments to Non-Employees The
resulting compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite
service period of the award. Basic
and diluted net loss per common share Net
loss per share information is determined using the two-class method, which includes the weighted-average number of shares of common stock
outstanding during the period and other securities that participate in dividends (a “participating security”). The Company
considered its Preferred Stock to be participating securities because the shares included rights to participate in dividends with the
common stock. Under
the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net income attributable
to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The net loss attributable
to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the Preferred Stock. Net losses are
not allocated to preferred stockholders as they do not have an obligation to share in the Company’s net losses. In periods with
net income attributable to common stockholders, the Company would allocate net income first to preferred stockholders based on dividend
rights under the Company’s certificate of incorporation and then to preferred and common stockholders based on ownership interests.
Diluted net loss per share attributable to common stockholders is computed using the more dilutive of (1) the two-class method or (2)
the if-converted method. During
the years ended December 31, 2022 and 2021, diluted earnings per common share is the same as basic earnings per common share because,
as the Company incurred a net loss during each period presented, the potentially dilutive securities from the assumed exercise of all
outstanding stock options and warrants would have an anti-dilutive effect. The reconciliation of the diluted shares as of December 31,
2022 and 2021 are as follows: Schedule
of Anti-dilutive Securities
As of December 31,
2022 2021
Stock options 34,739 28,184
Warrants 238 988
Total 34,977 29,172 Revenue
recognition Pursuant
to Topic 606, the Company recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle,
Topic 606 outlines a five-step process for recognizing revenue from customer contracts that includes i) identification of the contract
with a customer, ii) identification of the performance obligations in the contract, iii) determining the transaction price, iv) allocating
the transaction price to the separate performance obligations in the contract, and v) recognizing revenue associated with performance
obligations as they are satisfied. At
contract inception, the Company assesses the goods or services promised within each contract and assess whether each promised good or
service is distinct and determine those that are performance obligations. The Company then recognizes as revenue the amount of the transaction
price that is allocated to the respective performance obligation when the performance obligation is satisfied. For
the year ended December 31, 2022, the Company’s revenues primarily consist of contract research revenue from the BioNTech Agreement
to evaluate the combination of mRNA formats utilizing the Company’s proprietary LNC Platform. For a complete disclosure of the
Company’s Revenue Recognition, see Note 9 – Revenue Recognition, Collaboration Agreements, and Other Research and Development
Agreements. On
December 12, 2019, the Company entered into a feasibility study agreement (the “Agreement”) with Genentech, Inc. (“Genentech”).
This feasibility study involves the development of oral formulations using the Company’s LNC Platform, which enables the development
of a wide range of difficult-to-deliver molecules. Under the terms of the Agreement, Genentech paid the Company a total of $ 100 33 33 Collaboration
Agreements The
Company assess whether its collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements The
terms of such arrangements typically include payments to the Company for one or more of the following: up-front fees; development and
regulatory payments; product supply services; research and development cost reimbursements; profit-sharing arrangements; and royalties
on certain products if they are successfully commercialized. As part of the accounting for these arrangements, the Company develops assumptions
that require judgment to determine the standalone selling price for each performance obligation identified in the contract. These key
assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement rates for personnel costs, discount
rates and probabilities of technical and regulatory success. Up-front
License Fees: Research
and Development Milestone Payments: Research
and Development Cost Reimbursements: Research
and Development Arrangement: 811 2,179 Research
and development expenses Research
and development expenses primarily consist of costs associated with the preclinical and clinical development of our product candidate
portfolio, including the following:
● external
research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”)
and other vendors and contract manufacturing organizations (“CMOs”) for the production of drug substance and drug product;
and
● employee-related
expenses, including salaries, benefits and share-based compensation expense. Research
and development expenses also include costs of acquired product licenses and related technology rights where there is no alternative
future use, costs of prototypes used in research and development, consultant fees and amounts paid to certain of our collaborative partners. All
research and development expenses are charged to operations as incurred in accordance with FASB ASC Topic 730, Research and Development.
The Company accounts for non-refundable advance payments for goods and services that will be used in future research and development
activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made. Accrued
Research and Development Expenses As
part of the process of preparing the Company’s financial statements, the Company is required to estimate its accrued expenses.
This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf
and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced
or otherwise notified of the actual cost. Certain of the Company’s service providers invoice the Company monthly in arrears for
services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses as of each balance sheet
date in its financial statements based on facts and circumstances known to the Company at that time. The Company periodically confirms
the accuracy of its estimates with the service providers and adjust if necessary. The significant estimates in the Company’s accrued
research and development expenses are related to expenses incurred with respect to CROs, CMOs and other vendors in connection with research
and development and manufacturing activities. The
Company bases its expense related to CROs and CMOs on its estimates of the services received and efforts expended pursuant to quotations
and contracts with such vendors that conduct research and development and manufacturing activities on its behalf. The financial terms
of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances
in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of the applicable
research and development or manufacturing expense. In accruing service fees, the Company estimates the time period over which services
will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level
of effort varies from its estimate, the Company adjust the accrual or prepaid expense accordingly. Although the Company does not expect
its estimates to be materially different from amounts actually incurred, the Company’s understanding of the status and timing of
services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that
are too high or too low in any particular period. There have been no material changes in estimates for the periods presented. Patent
expenses Legal
fees and other direct costs incurred in obtaining and protecting patents are also expensed as incurred and are included in general and
administrative expenses in the consolidated statements of operations. Other
comprehensive loss Other
comprehensive loss consists of net gains/(losses) and unrealized losses on marketable debt securities available-for-sale and is presented
in the Consolidated Statements of Operations and Comprehensive Loss. Recent
accounting pronouncements There
were no recent accounting pronouncements that impacted the Company or are expected to have a significant effect on its consolidated financial
statements. |
