Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 08, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38207 | |
Entity Registrant Name | CELCUITY INC. | |
Entity Central Index Key | 0001603454 | |
Entity Tax Identification Number | 82-2863566 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 16305 36th Avenue North; Suite 100 | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55446 | |
City Area Code | (763) | |
Local Phone Number | 392-0767 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | CELC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,958,849 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 33,639,218 | $ 24,571,557 |
Investments | 123,839,227 | 144,015,954 |
Deposits | 22,009 | 22,009 |
Deferred transaction costs | 35,597 | 33,195 |
Payroll tax receivable | 38,263 | 203,665 |
Prepaid assets | 6,525,368 | 6,344,157 |
Total current assets | 164,099,682 | 175,190,537 |
Property and equipment, net | 223,343 | 260,294 |
Operating lease right-of-use assets | 551,933 | 246,266 |
Total Assets | 164,874,958 | 175,697,097 |
Current Liabilities: | ||
Accounts payable | 2,569,913 | 2,627,076 |
Finance lease liabilities | 981 | 2,449 |
Operating lease liabilities | 194,895 | 191,749 |
Accrued expenses | 3,040,178 | 4,060,280 |
Total current liabilities | 5,805,967 | 6,881,554 |
Operating lease liabilities | 363,961 | 61,002 |
Note payable, non-current | 35,478,262 | 34,983,074 |
Total Liabilities | 41,648,190 | 41,925,630 |
Commitments and Contingencies (Note 5) | ||
Stockholders’ Equity: | ||
Preferred stock, $0.001 par value: 2,500,000 shares authorized; 1,095,873 and 1,120,873 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 1,096 | 1,121 |
Common stock, $0.001 par value: 65,000,000 shares authorized; 21,941,372 and 21,667,250 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 21,941 | 21,667 |
Additional paid-in capital | 231,439,035 | 230,045,566 |
Accumulated deficit | (108,235,304) | (96,296,887) |
Total Stockholders’ Equity | 123,226,768 | 133,771,467 |
Total Liabilities and Stockholders’ Equity | $ 164,874,958 | $ 175,697,097 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 1,095,873 | 1,120,873 |
Preferred stock, shares outstanding | 1,095,873 | 1,120,873 |
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 21,941,372 | 21,667,250 |
Common stock, shares outstanding | 21,941,372 | 21,667,250 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating expenses: | ||
Research and development | $ 11,278,493 | $ 6,696,313 |
General and administrative | 1,269,044 | 811,292 |
Total operating expenses | 12,547,537 | 7,507,605 |
Loss from operations | (12,547,537) | (7,507,605) |
Other income (expense) | ||
Interest expense | (1,242,012) | (435,001) |
Interest income | 1,851,132 | 8,159 |
Other income (expense), net | 609,120 | (426,842) |
Net loss before income taxes | (11,938,417) | (7,934,447) |
Income tax benefits | ||
Net loss | $ (11,938,417) | $ (7,934,447) |
Net loss per share, basic and diluted | $ (0.55) | $ (0.53) |
Weighted average common shares outstanding, basic and diluted | 21,680,877 | 14,917,187 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 14,919 | $ 124,622,405 | $ (55,926,847) | $ 68,710,477 | |
Beginning balance, shares at Dec. 31, 2021 | 14,918,887 | ||||
Stock-based compensation | 756,271 | 756,271 | |||
Exercise of common stock options, net of shares withheld for exercise price | $ 1 | 7,413 | 7,414 | ||
Exercise of common stock options, net of shares withheld for exercise price, shares | 1,415 | ||||
Net loss | (7,934,447) | (7,934,447) | |||
Ending balance, value at Mar. 31, 2022 | $ 14,920 | 125,386,089 | (63,861,294) | 61,539,715 | |
Ending balance, shares at Mar. 31, 2022 | 14,920,302 | ||||
Beginning balance, value at Dec. 31, 2022 | $ 21,667 | $ 1,121 | 230,045,566 | (96,296,887) | 133,771,467 |
Beginning balance, shares at Dec. 31, 2022 | 21,667,250 | 1,120,873 | |||
Stock-based compensation | 1,273,282 | 1,273,282 | |||
Exercise of common stock options, net of shares withheld for exercise price | $ 24 | 127,898 | 127,922 | ||
Exercise of common stock options, net of shares withheld for exercise price, shares | 24,122 | ||||
Conversion of preferred to common stock | $ 250 | $ (25) | (225) | ||
Conversion of preferred to common stock, shares | 250,000 | (25,000) | |||
Issuance costs associated with private placement offering | (7,486) | (7,486) | |||
Net loss | (11,938,417) | (11,938,417) | |||
Ending balance, value at Mar. 31, 2023 | $ 21,941 | $ 1,096 | $ 231,439,035 | $ (108,235,304) | $ 123,226,768 |
Ending balance, shares at Mar. 31, 2023 | 21,941,372 | 1,095,873 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (11,938,417) | $ (7,934,447) |
Adjustments to reconcile net loss to net cash used for operations: | ||
Depreciation | 43,938 | 55,989 |
Stock-based compensation | 1,273,282 | 756,271 |
Amortization of debt issuance costs and discount | 57,004 | 95,012 |
PIK interest | 438,184 | 102,086 |
Non-cash operating lease, net | 438 | (58) |
Change in accrued interest income | (1,697,811) | |
Changes in operating assets and liabilities: | ||
Payroll tax receivable | 165,402 | 105,730 |
Prepaid assets and deposits | (181,211) | (40,205) |
Accounts payable | (8,545) | 513,091 |
Accrued expenses | (1,020,102) | 413,499 |
Net cash used for operating activities | (12,867,838) | (5,933,032) |
Cash flows from investing activities: | ||
Purchases of investments | (3,125,462) | |
Proceeds from maturities of investments | 25,000,000 | |
Purchases of property and equipment | (6,987) | (11,635) |
Net cash provided by (used for) investing activities | 21,867,551 | (11,635) |
Cash flows from financing activities: | ||
Proceeds from exercise of employee stock options | 127,922 | 7,414 |
Payments for secondary registration statement costs | (55,789) | (52,244) |
Payments for debt issuance costs | (2,716) | |
Payments for finance leases | (1,469) | (1,458) |
Net cash provided by (used for) financing activities | 67,948 | (46,288) |
Net change in cash and cash equivalents | 9,067,661 | (5,990,955) |
Cash and cash equivalents: | ||
Beginning of period | 24,571,557 | 84,286,381 |
End of period | 33,639,218 | 78,295,426 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 746,824 | 237,903 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Offering and registration statement costs included in accounts payable | 2,402 | 104,237 |
Property and equipment included in accounts payable | $ 22,987 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Nature of Business Celcuity Inc., a Delaware corporation (the “Company”), is a clinical-stage biotechnology company focused on development of targeted therapies for multiple solid tumor indications. The Company’s lead therapeutic candidate is gedatolisib, a potent pan-PI3K and mTOR inhibitor. Its mechanism of action and pharmacokinetic properties are highly differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together. A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with fulvestrant with or without palbociclib in patients with HR+/HER2- advanced breast cancer is currently enrolling patients. Its CELsignia companion diagnostic platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to benefit from already approved targeted therapies. The Company was co-founded in 2012 by Brian F. Sullivan and Dr. Lance G. Laing and is based in Minnesota. The Company has not generated any revenues to date. |
Basis of Presentation, Summary
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 2. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company and have been prepared in accordance with Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, as permitted by Article 10, the unaudited financial statements do not include all of the information required by accounting principles generally accepted in the United States (“U.S. GAAP”). The balance sheet at December 31, 2022 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP. In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair presentation have been reflected in the financial statements. These unaudited condensed financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2022 and the related footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. Accounting Estimates Management uses estimates and assumptions in preparing these unaudited condensed financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates and the difference could be material. Significant items subject to such estimates and assumptions include the valuation of stock-based compensation and prepaid or accrued clinical trial costs. Risks and Uncertainties The Company is subject to risks common to companies in the development stage including, but not limited to, dependency on the clinical and commercial success of its diagnostic tests, ability to obtain regulatory approval of its diagnostic tests, the clinical and commercial success of its initial drug product, gedatolisib, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and consumers, and significant competition. Clinical Trial Costs The Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service providers, which includes the conduct of preclinical studies and clinical trials. These costs can be a significant component of the Company’s research and development expenses. The Company primarily relies on a compilation of progress reports from third-party service providers, including the respective invoicing, to record actual expenses, along with determining changes to prepaid assets and accrued liabilities. To date, the company believes utilization of third-party reports most accurately reflects expenses incurred. As the current VIKTORIA-1 Phase 3 trial ramps up site activation and patient enrollment, the Company’s estimated expenses in future periods and actual services performed may vary from these estimates, and these estimates may become more significant. Changes in these estimates that result in material changes to the Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations. Recently Adopted Accounting Pronouncements In June 2016 and related amendments, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326). This guidance changes the methodology to be used to measure credit losses for certain financial instruments and financial assets. The new methodology requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset. The Company adopted this standard effective January 1, 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 3. Net Loss Per Common Share Basic and diluted net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period. For all periods presented, the common shares underlying the options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares outstanding used to calculate both basic and diluted loss per common share are the same. For the three months ended March 31, 2023 and 2022, potentially dilutive securities excluded from the computations of diluted weighted-average shares outstanding were preferred stock on an as-if-converted to common stock basis of 10,958,730 zero 2,068,458 1,353,406 7,266,102 377,652 3,273 2,964 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Investments | 4. Investments Debt securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and reported at historical cost adjusted for amortization of premiums and accretion of discounts. Expected credit losses, if any, are recorded through the establishment of an allowance for credit losses. All of the Company’s investment securities are U.S. Treasury and agencies securities that are guaranteed or otherwise supported by the United States government and have no history of credit losses. Accordingly, the Company does not expect to incur any credit losses on investment securities and has allowance for credit losses recorded for these securities. The following table summarizes the Company’s held-to-maturity investment securities at amortized cost as of March 31, 2023 and December 31, 2022: Schedule of Investment Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value March 31, 2023 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value Governmental Agency Securities $ 21,755,483 $ 2,077 $ - $ 21,757,560 U.S. Treasury Notes 102,083,744 11,822 - 102,095,566 Total $ 123,839,227 $ 13,899 $ - $ 123,853,126 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value December 31, 2022 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value Governmental Agency Securities $ 46,230,893 $ 29,517 $ - $ 46,260,410 U.S. Treasury Notes 97,785,061 41,639 - 97,826,700 Total $ 144,015,954 $ 71,156 $ - $ 144,087,110 The Company had no |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 5. Commitments Operating and Finance Leases The Company leases its corporate space in Minneapolis, Minnesota. In March 2023, the Company signed the fourth amendment to extend this lease through April 30, 2026. This amendment provides for monthly rent, real estate taxes and operating expenses. The Company recorded an incremental $ 355,578 Clinical Research Studies The Company enters into contracts in the normal course of business to conduct research and development programs internally and through third parties that include, among others, arrangements with vendors, consultants, CMO’s, and CRO’s. The Company currently has four Phase 2 clinical trial agreements in place to evaluate targeted therapies selected with one of our CELsignia tests. Timing of milestone payments related to the Phase 2 clinical trials are uncertain and the contracts generally provide for termination following a certain period after notice, therefore the Company believes that non-cancelable obligations under the agreements are not material. The Company also has a license agreement in place with Pfizer to research, develop, manufacture and commercialize gedatolisib. In conjunction with the license agreement, the Company continued a Phase 1b study – B2151009 related to gedatolisib. These patients subsequently transitioned to an Expanded Access study – CELC-G-001. Contracts related to the Phase 1B study and the Expanded Access study, are generally based on time and material. In addition, contracts related to the Company’s Phase 3 clinical study (VIKTORIA-1) are generally cancelable with reasonable notice within 120 days and the Company’s obligations under these contracts are primarily based on services performed through termination dates plus certain cancelation charges, if any, as defined in each of the respective agreements. In addition, these agreements may, from time to time, be subjected to amendments as a result of any change orders executed by the parties. As of March 31, 2023, the Company had only one material non-cancelable contractual commitment with respect to these arrangements, which totaled approximately $ 2.2 |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity | 6. Stockholders’ Equity Capital Stock At December 31, 2022, the Company’s authorized capital stock consisted of 65,000,000 .001 21,667,250 2,500,000 .001 1,120,873 On March 31, 2023, one of the Company’s preferred shareholders elected to convert 25,000 250,0000 5.75 At March 31, 2023, the Company’s authorized capital stock consisted of 65,000,000 21,941,372 2,500,000 1,850,000 1,095,873 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 7. Stock-Based Compensation The following table summarizes the activity for all stock options outstanding for the three months ended March 31: Schedule of Stock Options Activity 2023 2022 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Options outstanding at beginning of year 1,976,586 $ 6.34 1,315,321 $ 11.97 Granted 119,985 11.36 119,500 10.01 Exercised 24,122 5.30 (1,415 ) 5.24 Forfeited (3,991 ) 6.55 (80,000 ) 13.01 Balance at March 31 2,068,458 $ 6.65 1,353,406 $ 11.75 Options exercisable at March 31: 1,114,767 $ 5.91 625,912 $ 9.68 Weighted Average Grant Date Fair Value for options granted during the period: $ 7.81 $ 6.72 The following table summarizes additional information about stock options outstanding and exercisable at March 31, 2023: Schedule of Stock Options Outstanding and Exercisable Options Outstanding Options Exercisable Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value Options Exercisable Weighted Average Exercise Price Aggregate Intrinsic Value 2,068,458 7.85 $ 6.65 $ 7,795,439 1,114,767 $ 5.91 $ 5,004,674 The Company recognized stock-based compensation expense for stock options of $ 1,222,328 709,509 776,324 5.50 39,612 0 277,000 311,000 13.44 16,924 28,029 156,000 203,750 5.10 7,108 11,614 13,000 The Black-Scholes option-pricing model was used to estimate the fair value of equity-based awards with the following weighted-average assumptions for the three months ended March 31: Schedule of Assumptions for Fair Value of Equity-based Awards 2023 2022 Risk-free interest rate 3.64 4.14 % 1.68 2.41 % Expected volatility 79.8 % 76.2 76.5 % Expected life (years) 5.25 6.08 6.04 6.08 Expected dividend yield 0 % 0 % The inputs for the Black-Scholes valuation model require management’s significant assumptions. Prior to the Company’s initial public offering, the price per share of common stock was determined by the Company’s board based on recent prices of common stock sold in private offerings. Subsequent to the initial public offering, the price per share of common stock is determined by using the closing market price on the Nasdaq Capital Market on the grant date. The risk-free interest rates are based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected life is based on the simplified method in accordance with the SEC Staff Accounting Bulletin Nos. 107 and 110. The expected volatility is estimated based on historical volatility information of peer companies that are publicly available in combination with the Company’s calculated volatility since being publicly traded. All assumptions used to calculate the grant date fair value of non-employee options are generally consistent with the assumptions used for options granted to employees. In the event the Company terminates any of its consulting agreements, the unvested options issued in connection with the agreements would also be cancelled. No 3,273 2,964 0 4,642 20,344 The Company initially reserved a maximum of 750,000 102,998 149,189 216,673 increase automatically on January 1 of each year from 2024 through 2027 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of Company common stock as of the immediately preceding December 31. 500,000 1,000,000 343,114 Total unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized as follows: Schedule of Unrecognized Compensation Cost 2023 $ 2,781,277 2024 2,291,390 2025 1,474,943 2026 435,113 2027 6,198 Total estimated compensation cost to be recognized $ 6,988,921 The Company recognized stock-based compensation expense related to its employee stock purchase plan of $ 46,312 26,148 100,000 51,499 74,594 108,337 number of shares equal to 0.5% of the total outstanding number of shares of Company common stock as of the immediately preceding December 31. 300,485 The Company recognized total stock-based compensation expense as follows for the three months ended March 31: Schedule of Stock-based Compensation Expense 2023 2022 Three Months Ended March 2023 2022 Stock-based compensation expense in operating expenses: Research and development $ 654,471 $ 450,520 General and administrative 618,811 305,751 Total $ 1,273,282 $ 756,271 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt On April 8, 2021, the Company entered into a loan and security agreement (the “Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP, a Delaware limited partnership (“Innovatus”) in its capacity as Collateral Agent and sole Lender. On August 9, 2022, the Company amended the Loan Agreement. Under the amended Loan Agreement, Innovatus, as Lender, has agreed to loan up to $ 75 50 35 15 20 Long-term debt consisted of the following at March 31, 2023 and December 31, 2022: Schedule of Long-term Debt March 31, 2023 December 31, 2022 Note payable $ 35,000,000 $ 35,000,000 Add: PIK interest (added to principal) 1,193,259 755,075 Add: final fee - - Less: unamortized debt issuance costs (653,555 ) (707,001 ) Less: unamortized debt discount (61,442 ) (65,000 ) Total long-term debt $ 35,478,262 $ 34,983,074 Future principal payments, including the incurred PIK interest, are as follows: Schedule of Long Term Debt Future Principal Payments Years Ending December 31, 2025 $ 13,572,473 2026 18,096,629 2027 4,524,157 Total $ 36,193,259 |
Basis of Presentation, Summar_2
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company and have been prepared in accordance with Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, as permitted by Article 10, the unaudited financial statements do not include all of the information required by accounting principles generally accepted in the United States (“U.S. GAAP”). The balance sheet at December 31, 2022 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP. In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair presentation have been reflected in the financial statements. These unaudited condensed financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2022 and the related footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these unaudited condensed financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates and the difference could be material. Significant items subject to such estimates and assumptions include the valuation of stock-based compensation and prepaid or accrued clinical trial costs. |
Risks and Uncertainties | Risks and Uncertainties The Company is subject to risks common to companies in the development stage including, but not limited to, dependency on the clinical and commercial success of its diagnostic tests, ability to obtain regulatory approval of its diagnostic tests, the clinical and commercial success of its initial drug product, gedatolisib, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and consumers, and significant competition. |
Clinical Trial Costs | Clinical Trial Costs The Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service providers, which includes the conduct of preclinical studies and clinical trials. These costs can be a significant component of the Company’s research and development expenses. The Company primarily relies on a compilation of progress reports from third-party service providers, including the respective invoicing, to record actual expenses, along with determining changes to prepaid assets and accrued liabilities. To date, the company believes utilization of third-party reports most accurately reflects expenses incurred. As the current VIKTORIA-1 Phase 3 trial ramps up site activation and patient enrollment, the Company’s estimated expenses in future periods and actual services performed may vary from these estimates, and these estimates may become more significant. Changes in these estimates that result in material changes to the Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016 and related amendments, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326). This guidance changes the methodology to be used to measure credit losses for certain financial instruments and financial assets. The new methodology requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset. The Company adopted this standard effective January 1, 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Schedule of Investment | The following table summarizes the Company’s held-to-maturity investment securities at amortized cost as of March 31, 2023 and December 31, 2022: Schedule of Investment Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value March 31, 2023 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value Governmental Agency Securities $ 21,755,483 $ 2,077 $ - $ 21,757,560 U.S. Treasury Notes 102,083,744 11,822 - 102,095,566 Total $ 123,839,227 $ 13,899 $ - $ 123,853,126 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value December 31, 2022 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value Governmental Agency Securities $ 46,230,893 $ 29,517 $ - $ 46,260,410 U.S. Treasury Notes 97,785,061 41,639 - 97,826,700 Total $ 144,015,954 $ 71,156 $ - $ 144,087,110 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes the activity for all stock options outstanding for the three months ended March 31: Schedule of Stock Options Activity 2023 2022 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Options outstanding at beginning of year 1,976,586 $ 6.34 1,315,321 $ 11.97 Granted 119,985 11.36 119,500 10.01 Exercised 24,122 5.30 (1,415 ) 5.24 Forfeited (3,991 ) 6.55 (80,000 ) 13.01 Balance at March 31 2,068,458 $ 6.65 1,353,406 $ 11.75 Options exercisable at March 31: 1,114,767 $ 5.91 625,912 $ 9.68 Weighted Average Grant Date Fair Value for options granted during the period: $ 7.81 $ 6.72 |
Schedule of Stock Options Outstanding and Exercisable | The following table summarizes additional information about stock options outstanding and exercisable at March 31, 2023: Schedule of Stock Options Outstanding and Exercisable Options Outstanding Options Exercisable Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value Options Exercisable Weighted Average Exercise Price Aggregate Intrinsic Value 2,068,458 7.85 $ 6.65 $ 7,795,439 1,114,767 $ 5.91 $ 5,004,674 |
Schedule of Assumptions for Fair Value of Equity-based Awards | The Black-Scholes option-pricing model was used to estimate the fair value of equity-based awards with the following weighted-average assumptions for the three months ended March 31: Schedule of Assumptions for Fair Value of Equity-based Awards 2023 2022 Risk-free interest rate 3.64 4.14 % 1.68 2.41 % Expected volatility 79.8 % 76.2 76.5 % Expected life (years) 5.25 6.08 6.04 6.08 Expected dividend yield 0 % 0 % |
Schedule of Unrecognized Compensation Cost | Total unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized as follows: Schedule of Unrecognized Compensation Cost 2023 $ 2,781,277 2024 2,291,390 2025 1,474,943 2026 435,113 2027 6,198 Total estimated compensation cost to be recognized $ 6,988,921 |
Schedule of Stock-based Compensation Expense | The Company recognized total stock-based compensation expense as follows for the three months ended March 31: Schedule of Stock-based Compensation Expense 2023 2022 Three Months Ended March 2023 2022 Stock-based compensation expense in operating expenses: Research and development $ 654,471 $ 450,520 General and administrative 618,811 305,751 Total $ 1,273,282 $ 756,271 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following at March 31, 2023 and December 31, 2022: Schedule of Long-term Debt March 31, 2023 December 31, 2022 Note payable $ 35,000,000 $ 35,000,000 Add: PIK interest (added to principal) 1,193,259 755,075 Add: final fee - - Less: unamortized debt issuance costs (653,555 ) (707,001 ) Less: unamortized debt discount (61,442 ) (65,000 ) Total long-term debt $ 35,478,262 $ 34,983,074 |
Schedule of Long Term Debt Future Principal Payments | Future principal payments, including the incurred PIK interest, are as follows: Schedule of Long Term Debt Future Principal Payments Years Ending December 31, 2025 $ 13,572,473 2026 18,096,629 2027 4,524,157 Total $ 36,193,259 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 2,068,458 | 1,353,406 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 7,266,102 | 377,652 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 3,273 | 2,964 |
Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 10,958,730 | 0 |
Schedule of Investment (Details
Schedule of Investment (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Amortized Cost, as Adjusted | $ 123,839,227 | $ 144,015,954 |
Gross Unrealized Holding Gains | 13,899 | 71,156 |
Gross Unrealized Holding Losses | ||
Estimated Fair Value | 123,853,126 | 144,087,110 |
US Government Agencies Debt Securities [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Amortized Cost, as Adjusted | 21,755,483 | 46,230,893 |
Gross Unrealized Holding Gains | 2,077 | 29,517 |
Gross Unrealized Holding Losses | ||
Estimated Fair Value | 21,757,560 | 46,260,410 |
US Treasury Securities [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Amortized Cost, as Adjusted | 102,083,744 | 97,785,061 |
Gross Unrealized Holding Gains | 11,822 | 41,639 |
Gross Unrealized Holding Losses | ||
Estimated Fair Value | $ 102,095,566 | $ 97,826,700 |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Investments, All Other Investments [Abstract] | |||
Short-term investments | $ 123,839,227 | $ 144,015,954 |
Commitments (Details Narrative)
Commitments (Details Narrative) | 1 Months Ended |
Mar. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Increase in operating ROU asset and lease liability | $ 355,578 |
Non-cancelable contractual commitment | $ 2,200,000 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | ||
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares outstanding | 21,941,372 | 21,667,250 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares outstanding | 1,095,873 | 1,120,873 |
Series A Convertible Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Conversion of preferred to common stock, shares | 25,000 | |
Conversion Price | $ 5.75 | |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Conversion of preferred to common stock, shares | 250 | |
Series A Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized | 1,850,000 |
Schedule of Stock Options Activ
Schedule of Stock Options Activity (Details) - Share-Based Payment Arrangement, Option [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Offsetting Assets [Line Items] | ||
Shares, options outstanding | 1,976,586 | 1,315,321 |
Weighted average exercise price, options outstanding | $ 6.34 | $ 11.97 |
Shares, Granted | 119,985 | 119,500 |
Weighted Average Exercise Price, Granted | $ 11.36 | $ 10.01 |
Shares, Exercised | 24,122 | 1,415 |
Weighted Average Exercise Price, Exercised | $ 5.30 | $ 5.24 |
Shares, Exercised | (24,122) | (1,415) |
Shares, Forfeited | (3,991) | (80,000) |
Weighted Average Exercise, Forfeited | $ 6.55 | $ 13.01 |
Shares, options outstanding | 2,068,458 | 1,353,406 |
Weighted average exercise price, options outstanding | $ 6.65 | $ 11.75 |
Shares, options exercisable | 1,114,767 | 625,912 |
Weighted Average Exercise Price, Options exercisable | $ 5.91 | $ 9.68 |
Weighted Average Grant Date Fair Value for Options Granted During the year: | $ 7.81 | $ 6.72 |
Schedule of Stock Options Outst
Schedule of Stock Options Outstanding and Exercisable (Details) - Share-Based Payment Arrangement, Option [Member] | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options outstanding | shares | 2,068,458 |
Options outstanding, weighted average remaining contractual life | 7 years 10 months 6 days |
Options outstanding, weighted average exercise price | $ / shares | $ 6.65 |
Options outstanding, aggregate intrinsic value | $ | $ 7,795,439 |
Options exercisable | shares | 1,114,767 |
Options exercisable, weighted average exercise price | $ / shares | $ 5.91 |
Options exercisable, aggregate intrinsic value | $ | $ 5,004,674 |
Schedule of Assumptions for Fai
Schedule of Assumptions for Fair Value of Equity-based Awards (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 79.80% | |
Expected dividend yield | 0% | 0% |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate | 3.64% | 1.68% |
Expected volatility | 76.20% | |
Expected life (years) | 5 years 3 months | 6 years 14 days |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate | 4.14% | 2.41% |
Expected volatility | 76.50% | |
Expected life (years) | 6 years 29 days | 6 years 29 days |
Schedule of Unrecognized Compen
Schedule of Unrecognized Compensation Cost (Details) | Mar. 31, 2023 USD ($) |
Share-Based Payment Arrangement [Abstract] | |
2023 | $ 2,781,277 |
2024 | 2,291,390 |
2025 | 1,474,943 |
2026 | 435,113 |
2027 | 6,198 |
Total estimated compensation cost to be recognized | $ 6,988,921 |
Schedule of Stock-based Compens
Schedule of Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | $ 1,273,282 | $ 756,271 |
Research and Development Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | 654,471 | 450,520 |
General and Administrative Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | $ 618,811 | $ 305,751 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | |||||||||||
May 12, 2022 | May 12, 2021 | Oct. 25, 2017 | Mar. 31, 2023 | Mar. 31, 2022 | Jan. 01, 2023 | May 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | May 31, 2020 | May 10, 2018 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Stock option description | increase automatically on January 1 of each year from 2024 through 2027 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of Company common stock as of the immediately preceding December 31. | |||||||||||
2017 Plan [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Common stock, shares reserved for issuance | 1,000,000 | 750,000 | 216,673 | 149,189 | 102,998 | |||||||
Additional shares authorized under plan | 500,000 | 500,000 | ||||||||||
Shares available for grant under the 2017 Plan | 343,114 | |||||||||||
In May 2022 [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Stock option awards shares modified | 776,324 | |||||||||||
Stock option exercise price per share | $ 5.50 | |||||||||||
Stock based compensation expense related to modification | $ 39,612 | $ 0 | ||||||||||
Remaining stock based compensation expense related to modification | 277,000 | |||||||||||
In December 2021 [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Stock option awards shares modified | 311,000 | |||||||||||
Stock option exercise price per share | $ 13.44 | |||||||||||
Stock based compensation expense related to modification | 16,924 | 28,029 | ||||||||||
Remaining stock based compensation expense related to modification | 156,000 | |||||||||||
In May 2020 [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Stock option awards shares modified | 203,750 | |||||||||||
Stock option exercise price per share | $ 5.10 | |||||||||||
Stock based compensation expense related to modification | 7,108 | 11,614 | ||||||||||
Remaining stock based compensation expense related to modification | 13,000 | |||||||||||
Equity Option [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Recognized stock-based compensation expense | 1,222,328 | 709,509 | ||||||||||
Restricted Stock [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Recognized stock-based compensation expense | $ 4,642 | $ 20,344 | ||||||||||
Restricted stock awards granted | 0 | 0 | ||||||||||
Restricted stock awards outstanding | 3,273 | 2,964 | ||||||||||
Restricted stock awards vested | 0 | 0 | ||||||||||
Employee Stock Purchase Plan [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Recognized stock-based compensation expense | $ 46,312 | $ 26,148 | ||||||||||
Common stock, shares reserved for issuance | 100,000 | |||||||||||
Stock option description | number of shares equal to 0.5% of the total outstanding number of shares of Company common stock as of the immediately preceding December 31. | |||||||||||
Shares available for grant under the 2017 Plan | 300,485 | |||||||||||
Change in common stock, shares reserved for issuance | 108,337 | 74,594 | 51,499 |
Schedule of Long-term Debt (Det
Schedule of Long-term Debt (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Note payable | $ 35,000,000 | $ 35,000,000 |
Add: PIK interest (added to principal) | 1,193,259 | 755,075 |
Add: final fee | ||
Less: unamortized debt issuance costs | (653,555) | (707,001) |
Less: unamortized debt discount | (61,442) | (65,000) |
Total long-term debt | $ 35,478,262 | $ 34,983,074 |
Schedule of Long Term Debt Futu
Schedule of Long Term Debt Future Principal Payments (Details) | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2025 | $ 13,572,473 |
2026 | 18,096,629 |
2027 | 4,524,157 |
Total | $ 36,193,259 |
Debt (Details Narrative)
Debt (Details Narrative) - Innovatus Life Sciences [Member] - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 22, 2022 | Aug. 09, 2022 | Apr. 08, 2021 |
Amended Loan Agreement [Member] | ||||
Short-Term Debt [Line Items] | ||||
Funded contingent loan, outstanding | $ 35 | |||
Amended Loan Agreement [Member] | Term A Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Non-contingent loan, amount | $ 15 | |||
Amended Loan Agreement [Member] | Term B Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Non-contingent loan, amount | $ 20 | |||
Amended Loan Agreement [Member] | ||||
Short-Term Debt [Line Items] | ||||
Unfunded contingent maximum loan, amount | $ 75 | |||
Increase from original loan amount | $ 50 |