Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 11, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Entity File Number | 001-39619 | |
Entity Registrant Name | Kiromic BioPharma, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4762913 | |
Entity Address, Address Line One | 7707 Fannin Street | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Houston | |
Entity Address State Or Province | TX | |
Entity Address, Postal Zip Code | 77054 | |
City Area Code | 832 | |
Local Phone Number | 968-4888 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | KRBP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,176,260 | |
Entity Central Index Key | 0001792581 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 2,704,200 | $ 645,200 |
Prepaid expenses and other current assets | 2,009,000 | 1,043,700 |
Total current assets | 4,713,200 | 1,688,900 |
Property and equipment, net | 7,061,800 | 8,136,900 |
Operating lease right-of-use asset | 1,840,400 | 2,117,300 |
Other assets | 21,400 | 24,400 |
Total Assets | 13,636,800 | 11,967,500 |
Current Liabilities: | ||
Senior secured convertible promissory note, net | 8,035,300 | 3,809,900 |
Accounts payable | 6,621,500 | 7,308,100 |
Accrued expenses and other current liabilities | 2,314,800 | 881,600 |
Interest payable | 891,900 | 142,100 |
Note payable | 227,600 | 557,200 |
Operating lease liability - short term | 608,800 | 584,400 |
Total current liabilities | 18,699,900 | 13,283,300 |
Subordinated convertible promissory note | 2,914,000 | |
Operating lease liability - long term | 1,231,700 | 1,544,900 |
Total Liabilities | 19,931,600 | 17,742,200 |
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value: 60,000,000 shares authorized, 8,000 and 0, issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 1 | |
Common stock, $0.001 par value: 300,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 1,176,260 and 648,384 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 1,176 | 648 |
Additional paid-in capital | 107,716,223 | 96,172,152 |
Accumulated deficit | (114,012,200) | (101,947,500) |
Total Stockholders' Equity | (6,294,800) | (5,774,700) |
Total Liabilities and Stockholders' Equity | $ 13,636,800 | $ 11,967,500 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value ( in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 60,000,000 | 60,000,000 |
Preferred stock, issued | 8,000 | 0 |
Preferred stock, outstanding | 8,000 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 1,176,260 | 648,384 |
Common stock, outstanding | 1,176,260 | 648,384 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating expenses: | ||||
Research and development | $ 1,966,600 | $ 3,880,700 | $ 4,041,600 | $ 6,806,500 |
General and administrative | 2,325,900 | 4,551,700 | 5,028,300 | 8,990,800 |
Total operating expenses | 4,292,500 | 8,432,400 | 9,069,900 | 15,797,300 |
Loss from operations | (4,292,500) | (8,432,400) | (9,069,900) | (15,797,300) |
Other expense: | ||||
Interest expense | (335,400) | (2,700) | (779,400) | (5,500) |
Debt issuance amortization | (366,500) | (445,400) | ||
Litigation settlement | (1,770,000) | (1,770,000) | ||
Total other expense | (2,471,900) | (2,700) | (2,994,800) | (5,500) |
Net loss | $ (6,764,400) | $ (8,435,100) | $ (12,064,700) | $ (15,802,800) |
Net loss per preferred share, basic | $ (495.89) | $ (1,235.17) | ||
Net loss per common share, basic | (3.22) | $ (16.25) | (8.07) | $ (30.64) |
Net loss per preferred share, diluted | (495.89) | (1,235.17) | ||
Net loss per common share, diluted | $ (3.22) | $ (16.25) | $ (8.07) | $ (30.64) |
Weighted average preferred shares outstanding, basic | 8,000 | 4,022 | ||
Weighted average common shares outstanding, basic | 1,054,277 | 524,402 | 964,049 | 521,259 |
Weighted average preferred shares outstanding, diluted | 8,000 | 4,022 | ||
Weighted average common shares outstanding, diluted | 1,054,277 | 524,402 | 964,049 | 521,259 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' (Deficit) Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 516 | $ 94,535,784 | $ (67,216,500) | $ 27,319,800 | |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 516,284 | ||||
Common stock discount amortization | 85,100 | 85,100 | |||
Warrants underlying common stock issuance | (85,100) | (85,100) | |||
Released restricted stock units | $ 4 | (4) | |||
Released restricted stock units (in shares) | 3,236 | ||||
Stock compensation expense | 80,100 | 80,100 | |||
Net loss | (7,367,700) | (7,367,700) | |||
Balance at end of period at Mar. 31, 2022 | $ 520 | 94,615,880 | (74,584,200) | 20,032,200 | |
Balance at end of period (in shares) at Mar. 31, 2022 | 519,520 | ||||
Balance at beginning of period at Dec. 31, 2021 | $ 516 | 94,535,784 | (67,216,500) | 27,319,800 | |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 516,284 | ||||
Net loss | (15,802,800) | ||||
Balance at end of period at Jun. 30, 2022 | $ 528 | 94,800,072 | (83,019,300) | 11,781,300 | |
Balance at end of period (in shares) at Jun. 30, 2022 | 527,971 | ||||
Balance at beginning of period at Mar. 31, 2022 | $ 520 | 94,615,880 | (74,584,200) | 20,032,200 | |
Balance at beginning of period (in shares) at Mar. 31, 2022 | 519,520 | ||||
Common stock discount amortization | 85,900 | 85,900 | |||
Warrants underlying common stock issuance | (85,900) | (85,900) | |||
Released restricted stock units | $ 8 | (8) | |||
Released restricted stock units (in shares) | 8,451 | ||||
Stock compensation expense | 184,200 | 184,200 | |||
Net loss | (8,435,100) | (8,435,100) | |||
Balance at end of period at Jun. 30, 2022 | $ 528 | 94,800,072 | (83,019,300) | 11,781,300 | |
Balance at end of period (in shares) at Jun. 30, 2022 | 527,971 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 648 | 96,172,152 | (101,947,500) | (5,774,700) | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 648,384 | ||||
Common stock discount amortization | 85,000 | 85,000 | |||
Warrants underlying common stock issuance | (85,000) | (85,000) | |||
Released restricted stock units | $ 2 | (2) | |||
Released restricted stock units (in shares) | 1,773 | ||||
Conversion of subordinated convertible notes into shares of common stock | $ 329 | 2,913,671 | 2,914,000 | ||
Conversion of subordinated convertible notes into shares of common stock (in shares) | 329,086 | ||||
Stock compensation expense | 20,700 | 20,700 | |||
Net loss | (5,300,300) | (5,300,300) | |||
Balance at end of period at Mar. 31, 2023 | $ 979 | 99,106,521 | (107,247,800) | (8,140,300) | |
Balance at end of period (in shares) at Mar. 31, 2023 | 979,243 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 648 | 96,172,152 | (101,947,500) | (5,774,700) | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 648,384 | ||||
Conversion of subordinated convertible notes into shares of common stock | 2,914,000 | ||||
Net loss | (12,064,700) | ||||
Balance at end of period at Jun. 30, 2023 | $ 1 | $ 1,176 | 107,716,223 | (114,012,200) | (6,294,800) |
Balance at end of period (in shares) at Jun. 30, 2023 | 8,000 | 1,176,260 | |||
Balance at beginning of period at Mar. 31, 2023 | $ 979 | 99,106,521 | (107,247,800) | (8,140,300) | |
Balance at beginning of period (in shares) at Mar. 31, 2023 | 979,243 | ||||
Common stock discount amortization | 85,900 | 85,900 | |||
Warrants underlying common stock issuance | (85,900) | (85,900) | |||
Commitment shares issuance from standby equity purchase agreement | $ 197 | 658,903 | 659,100 | ||
Commitment shares issuance from standby equity purchase agreement (in shares) | 197,017 | ||||
Issuance of preferred stock | $ 1 | 7,999,999 | 8,000,000 | ||
Issuance of preferred stock (in shares) | 8,000 | ||||
Stock issuance costs | (84,600) | (84,600) | |||
Stock compensation expense | 35,400 | 35,400 | |||
Net loss | (6,764,400) | (6,764,400) | |||
Balance at end of period at Jun. 30, 2023 | $ 1 | $ 1,176 | $ 107,716,223 | $ (114,012,200) | $ (6,294,800) |
Balance at end of period (in shares) at Jun. 30, 2023 | 8,000 | 1,176,260 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (12,064,700) | $ (15,802,800) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation | 1,105,400 | 581,900 |
Operating lease non-cash expense | 276,900 | 139,200 |
Stock compensation expense | 56,100 | 264,300 |
Amortization of debt issuance costs | 445,400 | |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | 16,200 | |
Prepaid expenses and other current assets | (962,300) | 176,800 |
Accounts payable | (1,339,900) | 794,500 |
Interest payable | 749,800 | |
Accrued expenses and other current liabilities | 1,433,300 | 413,600 |
Operating lease liability | (288,800) | (131,700) |
Net cash used for operating activities | (10,588,800) | (13,548,000) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (4,955,700) | |
Net cash used for investing activities | (4,955,700) | |
Cash flows from financing activities: | ||
Proceeds from senior secured convertible note payable | 12,400,000 | |
Proceeds from issuance of common stock | 659,100 | |
Stock issuance costs | (81,700) | |
Repayments of note payable | (329,600) | (339,600) |
Net cash provided by (used for) financing activities | 12,647,800 | (339,600) |
Net change in cash and cash equivalents | 2,059,000 | (18,843,300) |
Cash and cash equivalents: | ||
Beginning of period | 645,200 | 25,353,900 |
End of period | 2,704,200 | 6,510,600 |
Supplemental disclosures of cash flow information: | ||
Right-of-use asset/lease liability recognized from ASC842 implementation | 2,232,700 | |
Conversion of 25% senior convertible promissory notes into preferred stock | 8,000,000 | |
Conversion of subordinated convertible notes into shares of common stock | 2,914,000 | |
Accruals for property and equipment purchases | 1,154,900 | |
Stock issuance costs in accounts payable | 2,900 | |
Cash paid for interest on note payable | 34,900 | 5,500 |
Right-of-use asset/liability acquired through lease liability | $ 204,800 | |
Construction in progress in accounts payable | 30,400 | |
Debt issuance costs in accounts payable | $ 620,000 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2023 | |
ORGANIZATION | |
ORGANIZATION | KIROMIC BIOPHARMA, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. ORGANIZATION Nature of Business Kiromic BioPharma, Inc. and subsidiaries (the "Company") is a clinical stage fully integrated biotherapeutics company formed under the Texas Business Organizations Code in December 2012. The Company maintains offices in Houston, Texas. The Company has not generated any revenues to date. The Company is an Artificial Intelligence (“AI”) driven, end-to-end allogeneic cell therapy company, currently developing multi-indication allogeneic T cell therapies that exploit the natural potency of Gamma Delta T cells (“GDTs”) to target solid tumors. Our end-to-end approach consists of target discovery and validation, product development, and current good manufacturing practices (“cGMP”), which we believe will allow us to leverage a new framework for the next generation of cell therapies. We also have new technologies in development to support our end-to-end approach. From a development standpoint, we utilize innovative engineered and non-engineered GDT manufacturing technologies and are developing proprietary, virus-free cell engineering tools to develop novel therapies for solid tumors that we believe will be effective and cost-efficient. Deltacel is our first allogeneic off-the-shelf GDT cell-based product in Phase 1 clinical stage. Our Procel Ô Ô We currently have three product candidates: 1) Deltacel: not-engineered GDTs, expanded and activated with proprietary technology; 2) We have a total of five clinical programs to study our key product candidates: 1) Deltacel-01: This phase 1 clinical trial will evaluate Deltacel in combination with low-dose radiation for patients with non-small cell lung cancer (NSCLC) 2) Procel combination: This phase 1 clinical trial is expected to evaluate Procel in combination with low-dose radiation for patients with PD-L1 positive solid malignancies. 3) Alexis-PRO-1: This phase 1 clinical trial is expected to evaluate Procel in patients with PD-L1 positive solid malignancies. 4) Isocel combination: This phase 1 clinical trial is expected to evaluate Isocel in combination with low-dose radiation for patients with Mesothelin Isoform 2 positive solid malignancies. 5) Alexis-ISO-1: This phase 1 clinical trial is expected to evaluate Isocel in patients with Mesothelin Isoform 2 positive solid malignancies. In June 2021, the FDA noted deficiencies in the chemistry, manufacturing, and control (CMC) sections of Alexis-PRO-1 (clinical trial evaluating Procel) and Alexis-ISO-1 (clinical trial evaluating Isocel) IND applications, consequently placing them on clinical hold. On July 13, 2021, the Company received the FDA’s formal clinical hold letters, which asked the Company to address key components regarding the chemical, manufacturing, and control components of the IND applications. The basis for the hold was mainly rooted in the use of a non-suitable retroviral vector to engineer the gamma delta T cells. The Company is developing a novel and virus-independent engineering method, which will result in the submission of new IND applications (numbers 2 to 5 above). These applications are expected to be ready for submission to the FDA in the first half of 2025, subject to sufficient financing to support the progression of the developments of those additional clinical trial candidates. IND #1 (number 1 above) will evaluate Deltacel GDTs in combination with low-dose radiation. We submitted the IND for the Deltacel trial on March 31, 2023. On April 28, 2023, the FDA authorized us to proceed with the first-in-human clinical trial of Deltacel (IND #1). Reverse Stock Split Going Concern— These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue from the commercialization of its product candidates. The Company had negative cash flow from operations of $10,588,800 for the six months ended June 30, 2023, and an accumulated deficit of $114,012,200 as of June 30, 2023. To date, the Company has relied on equity and debt financing to fund its operations. The Company’s product candidates are still in the early stages of development, and substantial additional financing will be needed by the Company to fund its operations and ongoing research and development efforts prior to the commercialization, if any, of its product candidates. The Company does not have sufficient cash on hand or available liquidity to meet its obligations through the twelve months following the date the condensed consolidated financial statements are issued. This condition raises substantial doubt about the Company’s ability to continue as a going concern. Given its projected operating requirements and its existing cash and cash equivalents, management’s plans include evaluating different strategies to obtain the required funding of future operations. These plans may include, but are not limited to, obtaining funding from current or new investors, including through private placements or public offering. However, there can be no assurance that the Company will be able to secure financing, or if available, that it will be sufficient to meet its needs or on favorable terms. Therefore, the plans cannot be deemed probable of being implemented. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. In the event the Company is unable to secure sufficient financing to allow it to meet its obligations as they become due, the Company may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification ("ASC") 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with GAAP. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2022. The results of operations for the period ended June 30, 2023 are not necessarily indicative of the operating results that may be expected for a full year. The condensed consolidated balance sheet as of December 31, 2022 contains financial information taken from the audited Company consolidated financial statements as of that date. All intercompany balances were eliminated upon consolidation. Use of Estimates Concentrations of Credit Risk and Other Uncertainties The Company is subject to certain risks and uncertainties from changes in any of the following areas that the Company believes could have a material adverse effect on future financial position or results of operations: the ability to obtain regulatory approval and market acceptance of, and reimbursement for, the Company’s product candidates; the performance of third-party clinical research organizations and manufacturers; protection of the intellectual property; litigation or claims against the Company based on intellectual property, patent, product, regulatory or other factors; the Company’s ability to attract and retain employees necessary to support commercial success; and changes in the industry or customer requirements including the emergence of competitive products with new capabilities. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which such temporary differences are expected to be recovered or settled. The Company records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes Research and Development Expense The Company accrues and expenses costs of services provided by contract research organizations in connection with preclinical studies and contract manufacturing organizations engaged to manufacture clinical trial material, costs of licensing technology, and costs of services provided by research organizations and service providers. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred if the technology is not expected to have any alternative future uses other than the specific research and development project for which it was intended. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed rather than when the payment is made. Net Loss per Share Attributable to Common Stockholders— Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares. Stock-Based Compensation Compensation—Stock Compensation The Company estimates the grant-date fair value of stock options using the Black-Scholes model and the assumptions used to value such stock options are determined as follows: Expected Term. Risk-Free Interest Rate. Volatility. of its own common stock price becomes available, or unless circumstances change such that the identified peer companies are no longer similar, in which case other suitable peer companies whose common stock prices are publicly available would be utilized in the calculation. Dividend Yield. Common Stock Valuations . We use our listed Nasdaq Capital Market closing price on the grant date to determine common stock valuation. Segment Data Recently Issued Accounting Pronouncements In June 2016, FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) |
NET LOSS PER SHARE OF COMMON ST
NET LOSS PER SHARE OF COMMON STOCK | 6 Months Ended |
Jun. 30, 2023 | |
NET LOSS PER SHARE OF COMMON STOCK | |
NET LOSS PER SHARE OF COMMON STOCK | 3. NET LOSS PER SHARE OF COMMON STOCK Basic and diluted net loss per common share is determined by dividing net loss less deemed dividends by the weighted-average common shares outstanding during the period. For all periods presented the common shares underlying the stock options, RSUs and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average common shares outstanding used to calculate both basic and diluted loss per common shares are the same. The following table illustrates the computation of basic and diluted loss per share: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Net loss $ (6,764,400) $ (8,435,100) $ (12,064,700) $ (15,802,800) Less: Initial Public Offering Common Stock discount amortization (24,900) (24,900) (49,500) (49,600) Less: Public Offering Common Stock discount amortization (61,000) (61,000) (121,400) (121,400) Less: Dividends attributable to preferred stock (515,100) — (515,100) — Net loss attributable to common shareholders $ (7,365,400) $ (8,521,000) $ (12,750,700) $ (15,973,800) Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 Common Stock Preferred Stock Common Stock Preferred Stock Net loss per share, basic and diluted Allocation of undistributed net loss $ (3,398,256) $ (3,967,144) $ (8,521,000) $ — Weighted average shares outstanding, basic and diluted 1,054,277 8,000 524,402 — Basic and diluted net loss per share $ (3.22) $ (495.89) $ (16.25) $ — Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Common Stock Preferred Stock Common Stock Preferred Stock Net loss per share, basic and diluted Allocation of undistributed net loss $ (7,782,723) $ (4,967,977) $ (15,973,800) $ — Weighted average shares outstanding, basic and diluted 964,049 4,022 521,259 — Basic and diluted net loss per share $ (8.07) $ (1,235.17) $ (30.64) $ — For the three months ended June 30, 2023, there were 23,936 restricted stock units and 15,416 warrants, that were potentially dilutive securities excluded from the computations of diluted weighted-average shares of common stock. During the six months ended June 30, 2023, the Company entered into an Exchange Agreement whereby outstanding promissory notes totaling $8,000,000 were exchanged for 8,000 shares of Series C Convertible Voting Preferred Stock (the “Series C Stock”). The Series C Stock accrues an annual 25% dividend, whether or not declared, which if unpaid is added to the aggregate liquidation preference. During the six months ended June 30, 2023, the preferred shareholders earned $515,100 of preferred dividends, which were not declared. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Equipment $ 3,041,900 $ 3,041,900 Leasehold improvements 7,298,500 7,298,500 Office furniture, fixtures, and equipment 137,300 137,300 Software 359,500 359,500 Construction in progress 30,400 — 10,867,600 10,837,200 Less: Accumulated depreciation (3,805,800) (2,700,300) Total $ 7,061,800 $ 8,136,900 Depreciation expense was $549,600 and $399,100 for the three months ended June 30, 2023 and 2022, respectively, and $1,105,400 and $581,900 for the six months ended June 30, 2023 and 2022, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 5. Accrued expenses and other current liabilities consisted of the following as of June 30, 2023 and December 31, 2022. June 30, 2023 December 31, 2022 Accrued litigation * $ 1,770,000 $ — Accrued compensation 323,500 668,700 Accrued consulting and outside services 221,300 212,900 Total $ 2,314,800 $ 881,600 * See Note 13 Subsequent Events for more information. |
NOTE PAYABLE
NOTE PAYABLE | 6 Months Ended |
Jun. 30, 2023 | |
NOTE PAYABLE | |
NOTE PAYABLE | 6. In November 2022, the Company entered into a financing arrangement for its Director and Officer Insurance policy. The total amount financed was approximately $610,700 with an annual interest rate of 8.49%, to be paid over a period of eleven months. As of June 30, 2023 and December 31, 2022, the remaining payable balance on the financed amount was $227,600 and $557,200, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 7. License Agreements Legal Proceedings The Company disputes Terrell’s claims and allegations in the Action and intends to vigorously defend against them. On May 21, 2021, the Company filed a motion to dismiss Terrell’s claims in the actions with prejudice, arguing that (i) Terrell’s options-related claims fail because his 2014 and January 2017 agreements were explicitly superseded by a later options agreement, under which Terrell relinquished his prior options; and (ii) Terrell is not entitled to indemnification because the Action relates to contracts between the Company and Terrell in his personal capacity, and not in connection with any activities or duties of Terrell in his official capacity as former director. In response to the motion, filed on June 21, 2021, Terrell withdrew his claim for indemnification, but opposed the portion seeking dismissal of his declaratory judgment claim. The motion was fully briefed with the filing of the Company’s reply brief on July 7, 2021. Oral argument was held before the Vice Chancellor on October 20, 2021. During oral argument, the Vice Chancellor invited the parties to submit supplemental letter briefs on the question of whether the Court of Chancery even had the authority to adjudicate the Action in light of the delegation of authority in Terrell’s most recent stock option agreement with the Company (the “SOA”) to the Company’s Compensation Committee to resolve all disputes regarding the interpretation of the SOA. The parties submitted simultaneous supplemental letters briefs on this issue on November 15, 2021. On January 20, 2022, the Vice Chancellor issued her decision on our motion to dismiss, ruling that the Action is stayed until the Compensation Committee itself resolves whether it has sole authority to resolve the parties’ contract interpretation dispute. Subsequently, the parties agreed upon a process for coordinating submissions and/or presentations to the Compensation Committee. The parties made their respective written submissions to the Compensation Committee on March 31, 2022, and on July 21, 2022, the Compensation Committee determined that (i) the Compensation Committee has sole authority under the SOA to resolve the parties’ contract interpretation dispute, and (ii) Terrell’s most recent options agreement superseded and nullified any option rights Terrell may have had under his prior agreements. On August 2, 2022, the Vice Chancellor issued an order dismissing the Action for lack of subject matter jurisdiction. On August 23, 2022, Terrell filed a notice of appeal of the Vice Chancellor’s order of dismissal to the Delaware Supreme Court. Oral argument on Terrell’s appeal was held before the Delaware Supreme Court on February 8, 2023. On May 4, 2023, the Delaware Supreme Court issued a written opinion (the “Opinion”) reversing the Vice Chancellor’s order of dismissal and remanding to Chancery Court for further proceedings consistent with the Opinion. In its Opinion, the Delaware Supreme Court affirmed several of the Chancery Court’s legal determinations on the motion to dismiss, but concluded that Chancery Court itself should independently review the Compensation Committee’s determinations under Delaware law. The parties are awaiting guidance from the Chancery Court regarding further briefing and/or argument on our motion to dismiss. In a separate matter, on or about August 17 and 23, 2021, Tony Tontat, who at the time was the Chief Financial Officer and a member of the Board, submitted substantially identical reports (the “Complaints”) through the Company’s complaint hotline. These Complaints, alleged, among other topics, risks associated with the Company’s public disclosures in securities filings and in statements made to the public, investors, and potential investors regarding (i) the anticipated timing of the FDA authorization of the IND applications and (ii) the anticipated timing of human clinical trials. These Complaints were subsequently submitted to the Audit Committee of the Board. After receiving the Complaints, the Audit Committee recommended that the Board form, and the Board did in turn form, a Special Committee comprised of three independent directors (the “Special Committee”) to review the Complaints and other related issues (the “Internal Review”). The Special Committee retained an independent counsel to assist it in conducting the Internal Review. On February 2, 2022, following the conclusion of the Internal Review, the Company’s Special Committee reported the results of its Internal Review to the Board. The Board approved certain actions to address the fact that the Company had received communications from the FDA on June 16 and June 17, 2021 that the FDA was placing the IND applications that the Company submitted to the FDA on May 14 and May 17, 2021 for the ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates, respectively, on clinical hold (the “June 16 and 17 FDA Communications”). The Company did not disclose the June 16 and 17, 2021 FDA Communications in the Registration Statement on Form S-1 (Registration No. 333-257427) that was filed on June 25, 2021 and declared effective on June 29, 2021, nor the final prospectus contained therein dated June 29, 2021 (collectively, the “Registration Statement”). The Company then consummated a public offering of $40 million of its common stock pursuant to the Registration Statement on July 2, 2021. On July 13, 2021, the Company received the FDA’s formal clinical hold letters, which asked the Company to address key components regarding the chemical, manufacturing, and control components of the IND applications. On July 16, 2021, the Company issued a press release disclosing that it had received comments from the FDA on the two INDs, but did not use the term “clinical hold.” The Company did not disclose the clinical hold in its Form 10-Q for the fiscal quarter ended June 30, 2021 that was filed with the Securities and Exchange Commission on August 13, 2021. On August 13, 2021, the Company issued a press release announcing that these INDs were placed on clinical hold. Upon completion of the Internal Review, the Company voluntarily contacted the SEC to report certain information about the Internal Review. Since that time, the Company has been voluntarily cooperating with requests for information from the SEC and intends to fully cooperate with any further requests from the SEC. In November 2022, we received a Grand Jury Subpoena (the “Subpoena”) from the U.S. Department of Justice requesting certain information from the company in connection with an ongoing investigation being conducted by the Federal Grand Jury in the Southern District of Texas. The Company is not a target of this investigation at this time. As a result of the disclosure omission of the June 16 and 17 FDA Communications, on March 7, 2022, entities related to Sabby Management LLC (the “Sabby Entities”) and Empery Asset Management, LP (the “Empery Entities”) filed a complaint in the United States District Court for the Southern District of New York asserting claims against the Company and certain current and former officers and directors of the Company for alleged violations of Sections 11, 12, and 15 of the Securities Act of 1933 in connection with the purchase of common stock through the Company’s public offering that closed on July 2, 2021. On July 1, 2022, the defendants filed motions to dismiss the complaint. In response, on July 22, 2022, the plaintiffs amended their complaint to, among other things, include the Company’s underwriters on the July 2, 2021 public offering, ThinkEquity LLC, as a defendant. The plaintiffs seek unspecified damages; rescission to the extent they still hold the Company’s securities, or if sold, rescissory damages; reasonable costs and expenses, including attorneys’ and experts’ fees; and other unspecified equitable and injunctive relief. The two parties reached a settlement agreement in principle on September 26, 2022, which the Company’s board of directors approved on September 27, 2022. The settlement contained a cash component of $75,000 payable to Sabby Entities and $75,000 to Empery Entities. As part of the settlement, the Company also agreed to issue convertible notes (the “Settlement Notes”) in the aggregate principal amount of $1,656,720 to each of the Empery convertible Empery ownership There was also a related subordinated convertible promissory note totaling $2,914,000 on the balance sheet at December 31, 2022, which Empery held $1,502,700 and Sabby held $1,411,300. During the three months ended March 31, 2023, Empery and Sabby converted the totality of their notes into shares of common stock of 163,268 and 153,333, respectively, at a share price $9.20 On August 5, 2022, Ronald H. Karp filed a class action complaint in the United States District Court for the Southern District of New York (the “Karp Class Action”) covering the same subject matter as the Sabby Entities’ and Empery Entities’ claim discussed above asserting claims against the Company and certain current and former officers and directors for alleged violations of Sections 11, 12, and 15 of the Securities Act of 1933 in connection with the purchase of common stock through the Company’s public offering that closed on July 2, 2021 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in connection with the certain statements and acts made by the defendants between June 25, 2021 and August 13, 2021. On October 3, 2022, Joseph Podmore filed a class action complaint in the United States District Court for the Southern District of New York (the “Podmore Class Action”) covering the same subject matter as the Sabby Entities’ and Empery Entities’ claim discussed above asserting claims against the Company and certain current and former officers and directors for alleged violations of Sections 11, 12, and 15 of the Securities Act of 1933 in connection with the purchase of common stock through the Company’s public offering that closed on July 2, 2021 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in connection with the certain statements and acts made by the defendants between June 25, 2021 and August 13, 2021. The Karp Class Action and the Podmore Class Action are collectively referred to as the “Class Action.” See Note 13 – Subsequent Events for further discussion. The Company regularly assesses all contingencies and believes, based on information presently known, the Company is not involved in any other matters that would have a material effect on the Company’s financial position, results of operations or cash flows. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
LEASES | 8 . The Company adopted FASB ASU No. 2016-02, Leases (Topic 842) on January 1, 2022, using the modified retrospective method, in which it did not restate prior periods. Upon adoption, the Company elected the package of practical expedients permitted under the transition guidance within Topic 842 which, among other things, allowed the Company to carry forward the historical lease classification. In our implementation of ASU No. 2016-02 the Company elected to discount lease obligations using our incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company’s incremental borrowing rate represents the rate of interest that it would have to pay to borrow over a similar term an amount equal to the lease payments in a similar economic environment. The Company considers publicly available data for instruments with similar terms and characteristics when determining its incremental borrowing rates. In addition, we elected the practical expedient to account for the lease and non-lease components on a combined basis. The Company intends to use the full lease term under the existing lease agreement as the lease term, which is currently set to expire on April 30, 2026. As of June 30, 2023, the Company is not able to determine if any renewal options will be exercised. The Company leases its premises in Houston, Texas under an operating lease which was renewed on November 19, 2020. This renewed lease agreement will commence under an operating lease agreement that is noncancelable from commencement until May 1, 2024. On March 22, 2021, the Company’s Board of Directors approved a lease expansion within its premises in Houston, Texas. The amended lease agreement commenced on August 1, 2021 under an operating lease agreement that is noncancelable from commencement until May 1, 2024. The amended lease agreement adds approximately 15,385 square feet. The Company has the option to cancel the lease thereafter until the agreement expires on May 1, 2026. The termination date is effective after a 90-day notice of cancellation. Two further amendments were executed in 2021. The agreements commenced on November 1, 2021, and December 1, 2021 under an operating lease agreement that is noncancelable from commencement until May 1, 2024. The amended lease agreement adds approximately 3,684 square feet. The Company has the option to cancel the lease thereafter until the agreement expires on May 1, 2026. The termination date is effective after a 90-day notice of cancellation. An amendment to the lease agreement was executed in January 2022 and commenced May 1, 2022. The amendment added approximately 9,352 square feet. The Company has the option to cancel the lease thereafter until the agreement expires on May 1, 2026. The termination date is effective after a 90-day If the Company exercises the cancellation option, the Company must also pay the lessor a termination payment equal to three months of base rent. The Company entered into a sublease of three suites for the use of certain fixture, fixtures and equipment on June 2, 2023. The lease commenced on June 5, 2023 under an operating lease agreement that is noncancelable until April 29, 2026. The monthly rent is $6,444 and remains flat during the period of the lease. The rent income received for this sublease is recorded in other income. The following table indicates the balance sheet line items that include the right-of-use assets and lease liabilities for our operating lease: June 30, 2023 December 31, 2022 Operating lease Operating lease Right-of-Use Asset Operating lease $ 1,840,400 $ 2,117,300 Total right-of use asset $ 1,840,400 $ 2,117,300 Lease Liabilities Operating lease - short term $ (608,800) $ (584,400) Operating lease - long term (1,231,700) (1,544,900) Total lease liabilities $ (1,840,500) $ (2,129,300) For the three months and six months ended June 30, 2023, the components of lease expense were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Operating lease cost allocated to research and development expense $ 89,500 $ 131,300 $ 179,000 $ 213,700 Operating lease cost allocated to general and administrative expense 89,500 38,200 179,000 106,300 Total lease expense $ 179,000 $ 169,500 $ 358,000 $ 320,000 Weighted-average remaining lease term 2.84 3.84 2.84 3.84 Weighted-average discount rate 7.12 % 7.12 % 7.12 % 7.12 % As of June 30, 2023, the maturities of the Company’s operating lease liabilities were as follows: Maturity of Lease Liabilities Operating lease 2023 (remaining) $ 358,800 2024 717,600 2025 724,700 2026 242,800 Total lease payments 2,043,900 Less: imputed interest (203,400) Present value of lease payments 1,840,500 The Company maintained a month-to-month lease in Arlington, VA, until October 1, 2022, which was considered a short-term lease. The Company elected to exclude this lease from the determination of the right-of-use asset and lease liability, as permitted under ASC 842. The Company recognized the lease payments in profit or loss in the statement of operations on a straight-line basis over the term of the lease. The monthly rent expense prior to termination of the lease was $2,500 per month. For the six months ended June 30, 2022, short-term lease expense was $15,000. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 6 Months Ended |
Jun. 30, 2023 | |
CONVERTIBLE DEBT | |
CONVERTIBLE DEBT | 9. The Company began issuing senior secured promissory notes (each a “CPN” and together the “Notes”) notes payable to a private accredited investor (the “Investor”) during 2022. The Company has continued to issue notes to the Investor during 2023. Through June 30, 2023, the Company has issued to the Investor eight notes totaling $16,400,000 , of which $12,400,000 were issued during the six months ended June 30, 2023. The notes are each 25% Senior Secured Convertible Promissory Notes with largely consistent terms including a stated interest rate of 25% per year, a stated conversion price subject to a beneficial ownership limitation and share cap representing a certain percentage of the outstanding shares of Common Stock at the time of conversion, and a one year maturity. The stated interest rates for these notes increase to 27% per annum or the highest rate then allowed under applicable law (whichever is lower) upon the occurrence of an event of default, including the failure by the Company to make payment of principal or interest due under the related note on the respective maturity date, and any commencement by the Company of a case under any applicable bankruptcy or insolvency law. In April 2023, the Company executed an exchange agreement to convert $8,000,000 of convertible promissory notes principal into shares of preferred stock. See Note 10 – Stockholder’s Equity for further discussion.. June 30, 2023 December 31, 2022 Senior Secured Convertible Promissory Note, maturing December 12, 2023 $ — $ 4,000,000 Senior Secured Convertible Promissory Note, maturing March 28, 2024 2,000,000 — Senior Secured Convertible Promissory Note, maturing April 25, 2024 2,000,000 — Senior Secured Convertible Promissory Note, maturing May 24, 2024 2,000,000 — Senior Secured Convertible Promissory Note, maturing June 26, 2024 2,400,000 — Total Convertible Promissory Note $ 8,400,000 $ 4,000,000 Less: unamortized debt issuance costs (364,700) (190,100) Convertible Promissory Note, net $ 8,035,300 $ 3,809,900 |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 10 . Stock issued outstanding The Series C Stock is convertible into shares of the Company’s common stock, par value $0.001 per share. The Series C Preferred Stock is voting stock and holders of the Series C Preferred Stock are entitled to vote together with the Common Stock on an as-if-converted-to-Common-Stock basis as determined by dividing the Liquidation Preference with respect to such shares of Series C Preferred Stock by the Conversion Price. Holders of Common Stock are entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders. Accordingly, holders of Series C Preferred Stock will be entitled to one vote for each whole share of Common Stock into which their Series C Preferred Stock is then-convertible on all matters submitted to a vote of stockholders. Cumulative Rights of Series C Stock Shareholders — Participating Rights of Series C Stock Shareholders — Exchange Agreement In April 2023, the Company entered into an Exchange Agreement with the holder of promissory notes to exchange an aggregate principal amount of $8 million of the Company’s 25% Senior Secured Convertible Promissory Notes for 8,000 shares of Series C Stock. The $8 million Senior Secured Convertible Promissory Notes is the aggregate of four promissory notes that were issued in the previous months, for $2 million each. Representative’s Warrants In connection with a public offering on July 2, 2021, the Company granted the underwriters warrants to purchase an aggregate of 13,333 shares of common stock at an exercise price of $187.50 per share, The Underwriters’ Warrants have a five-year term. All of the Underwriters’ Warrants were outstanding as of June 30, 2023 and December 31, 2022. The warrants related to the Public Offering stock discount will be fully amortized in April 2025. Standby Equity Purchase Agreement On May 24, 2023, we exercised the Commitment increase under the SEPA and issued to YA II PN, Ltd. 97,000 shares of common stock at a purchase price of $3.89, for an advance amount of $377,000. On June 2, 2023, we exercised an additional Commitment increase under the SEPA and issued to YA II PN, Ltd. 100,000 shares of common stock at a purchase price of $2.82, for an advance amount of $282,100. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 11. 2017 Stock Incentive Plan—Restricted Stock Units The following table summarizes the activity for all RSUs outstanding under the 2017 Plan at: 2023 2022 Weighted Average Weighted Average Grant Date Grant Date Fair Value Fair Value Shares Per Share Shares Per Share Nonvested RSUs at beginning of period 650 $ 259.50 17,028 $ 374.40 Granted — — — — Vested (251) 255.85 (356) 259.20 Cancelled and forfeited (11) 260.10 (11,191) 383.70 Nonvested RSUs at June 30 388 $ 285.36 5,481 $ 362.70 Total stock compensation expense recognized from stock-based compensation awards classified as restricted stock units were recognized in the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022, as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ 15,100 $ 1,900 $ 15,100 $ 13,900 General and administrative 14,500 2,400 14,500 (4,700) Total $ 29,600 $ 4,300 $ 29,600 $ 9,200 2017 Stock Incentive Plan— Stock Options The following table summarizes the activity for all stock options outstanding at June 30, 2023 under the 2017 Plan: 2023 2022 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding at beginning of period 11,286 $ 254.40 12,697 $ 257.10 Granted — — — — Exercised — — — — Cancelled and forfeited (5,433) 215.35 (1,401) 275.70 Balance at June 30 5,853 $ 285.36 11,296 $ 254.70 Options exercisable at June 30: 5,853 $ 285.36 11,165 $ 255.00 In addition, the weighted average remaining contractual life for the options is 4.43 years and 4.93 years as of , 2023 and December 31, 2022, respectively. The options have no intrinsic value as of , 2023 or December 31, 2022, respectively. Total stock compensation expense recognized from stock-based compensation awards classified as stock options were recognized in the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ — $ 3,000 $ — $ 52,000 General and administrative — 7,000 — 15,000 Total $ — $ 10,000 $ — $ 67,000 As of June 30, 2023, there was no unrecognized stock compensation expense related to unvested stock options. As of June 30, 2023, there was $96,600 unrecognized stock compensation expense related to unvested restricted stock units. 2021 Stock Incentive Plan—Restricted Stock Units The following table summarizes the activity for all RSUs outstanding at June 30, 2023 and 2022 under the 2021 Plan: 2023 2022 Weighted Average Weighted Average Grant Date Grant Date Fair Value Fair Value Shares Per Share Shares Per Share Nonvested RSUs at beginning of period 684 $ 133.20 2,068 $ 165.60 Granted 36,910 0.62 — — Vested (13,425) 0.62 — — Cancelled and forfeited (668) 126.60 (131) 126.60 Nonvested RSUs at June 30 23,501 $ 20.41 1,937 $ 168.30 Total stock compensation expense recognized from stock-based compensation awards classified as restricted stock units were recognized in the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022, as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ 3,900 $ 17,400 $ 11,800 $ 25,700 General and administrative 1,900 19,900 14,700 29,800 Total $ 5,800 $ 37,300 $ 26,500 $ 55,500 The vested outstanding restricted stock units have not been released to grantees as of June 30, 2023, but they were included in calculation of weighted average common shares outstanding, basic and diluted (See Note 3, Net Loss Per Share of Common Stock). The Company plans to release these shares to the grantees before the end of the year. Since there is a possibility that any portion of those shares could be sold as part of the release, the shares will be released in compliance with the Company’s insider trading policy when there is an open trading window and grantees are not in possession of any material non-public information. 2021 Stock Incentive Plan — Stock Options The following table summarizes the activity for all stock options outstanding at June 30, 2023 under the 2021 Plan: 2023 2022 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding at beginning of period 21,420 $ 12.90 — $ — Granted — — 24,480 12.90 Exercised — — — — Cancelled and forfeited (9,180) 12.90 — — Balance at June 30 12,240 $ 12.90 24,480 $ 12.90 Options exercisable at June 30: 12,240 $ 12.90 12,240 $ 12.90 Weighted average grant date fair value for options granted during the year: $ — $ 10.80 In addition, the stock options had weighted average remaining contractual life of 4.93 years. There was no stock compensation expense during the six months ended June 30, 2023 and June 30, 2022, respectively. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | 12. The Company’s effective tax rate from continuing operations was 0% for the three and six months ended June 30 June 30 The provision for income taxes during the interim reporting periods is calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss for the reporting period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws, business reorganizations and settlements with taxing authorities. The income tax rates vary from the US federal statutory rate of 21% primarily due to the full valuation allowance on the Company’s deferred tax assets. The Company has recorded the full valuation allowance based on an evaluation of both positive and negative evidence, including latest forecasts and cumulative losses in recent years. The Company has concluded that it was more likely than not that none of its deferred tax assets would be realized. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. Exchange Agreement On July 18, 2023, the Company entered into an Exchange Agreement (the “July 18 Exchange Agreement”) with the holder of promissory notes of the Company (the “Holder”) pursuant to which the Holder agreed to exchange aggregate principal amount of $6 million of the Company’s 25% Senior Secured Convertible Promissory Notes (the “July 18 Exchange Notes”) for 6,000 shares of Series C Stock. The $6 million Senior Secured Convertible Promissory Notes is the aggregate of three promissory notes that were issued in the previous months, for $2 million each, as discussed in Note 9 above. Board of Directors Appointment On July 20, 2023, the Board of Directors appointed Pam Misajon and Mike Catlin as members of the Board of Directors. Ms. Misajon has been appointed chair of the Nominating and Corporate Governance Committee and member of the Compensation Committee, Mr. Catlin has been appointed chair of the Audit Committee and member of the Nominating and Corporate Governance Committee. After these nominations, the Company regained the audit committee requirements under Listing Rule 5605 (c)(4), meeting the expectations of the Nasdaq which gave the Company until November 16, 2023 for compliance. Issuance of Senior Secured Convertible Promissory Note On July 25, 2023, the Company issued a 25% Senior Secured Convertible Promissory Note (the “July 25 Note”) to the investor. The Note has a principal amount of $2,400,000, bears interest at a rate of 25% per annum (the “Stated Rate”) and matures on July 25, 2024 (the “July 25 Maturity Date”), on which the principal balance and accrued but unpaid interest under the Note shall be due and payable. The Stated Rate will increase to 27% per annum or the highest rate then allowed under applicable law (whichever is lower) upon occurrence of an event of default, including the failure by the Company to make payment of principal or interest due under the Note on the Maturity Date, and any commencement by the Company of a case under any applicable bankruptcy or insolvency laws. The July 25 Note is convertible into shares of the Company’s common stock, par value $0.001 per share, at an initial conversion price of $6.50 per share, subject to a beneficial ownership limitation equivalent to 9.99%. Settlement in Principle of the Class Action On August 7, 2023, we entered into a term sheet with the plaintiffs in the Class Action, to settle in principle (and globally resolve) the Class Actions. In the Class Action, the plaintiffs have made allegations and asserted claims against the Company and certain current and former directors and officers, as well as the Company’s former underwriter, including for alleged violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 as well as Section 10(b) (and Rule 10b-5 promulgated thereunder) and Section 20(a) of the Securities Exchange Act of 1934 in connection with a public offering by the Company that closed on or about July 2, 2021. The Term Sheet provides, among other things, that it is subject to approval by the U.S. District Court for the Southern District of New York (the “Court”); that plaintiffs and the Company will prepare settlement materials consistent with the Term Sheet; that the settlement will globally resolve all claims and allegations; that no defendant admits any liability or any allegation; that the Company shall make cash consideration payments totaling $2,300,000 into an escrow account, of which $530,000 we expect to be paid by our insurance carrier directly to the plaintiffs, resulting in recognition of a $1.77 million expense in our income statement for the three and six months ended June 30, 2023. Such amounts shall be distributed as set forth in the Term Sheet, including that amounts shall be distributed upon approval of the settlement by the Court. The plaintiffs subsequently sent a letter to the Court on August 7, 2023, informing the Court of the settlement in principle and requesting that the Court stay all proceedings pending approval of the settlement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification ("ASC") 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with GAAP. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2022. The results of operations for the period ended June 30, 2023 are not necessarily indicative of the operating results that may be expected for a full year. The condensed consolidated balance sheet as of December 31, 2022 contains financial information taken from the audited Company consolidated financial statements as of that date. All intercompany balances were eliminated upon consolidation. |
Use of Estimates | Use of Estimates |
Concentrations of Credit Risk and Other Uncertainties | Concentrations of Credit Risk and Other Uncertainties The Company is subject to certain risks and uncertainties from changes in any of the following areas that the Company believes could have a material adverse effect on future financial position or results of operations: the ability to obtain regulatory approval and market acceptance of, and reimbursement for, the Company’s product candidates; the performance of third-party clinical research organizations and manufacturers; protection of the intellectual property; litigation or claims against the Company based on intellectual property, patent, product, regulatory or other factors; the Company’s ability to attract and retain employees necessary to support commercial success; and changes in the industry or customer requirements including the emergence of competitive products with new capabilities. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which such temporary differences are expected to be recovered or settled. The Company records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes |
Research and Development Expense | Research and Development Expense The Company accrues and expenses costs of services provided by contract research organizations in connection with preclinical studies and contract manufacturing organizations engaged to manufacture clinical trial material, costs of licensing technology, and costs of services provided by research organizations and service providers. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred if the technology is not expected to have any alternative future uses other than the specific research and development project for which it was intended. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed rather than when the payment is made. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders— Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares. |
Stock-Based Compensation | Stock-Based Compensation Compensation—Stock Compensation The Company estimates the grant-date fair value of stock options using the Black-Scholes model and the assumptions used to value such stock options are determined as follows: Expected Term. Risk-Free Interest Rate. Volatility. of its own common stock price becomes available, or unless circumstances change such that the identified peer companies are no longer similar, in which case other suitable peer companies whose common stock prices are publicly available would be utilized in the calculation. Dividend Yield. Common Stock Valuations . We use our listed Nasdaq Capital Market closing price on the grant date to determine common stock valuation. |
Segment Data | Segment Data |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) |
NET LOSS PER SHARE OF COMMON _2
NET LOSS PER SHARE OF COMMON STOCK (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
NET LOSS PER SHARE OF COMMON STOCK | |
Schedule of earnings per share, basic and diluted | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Net loss $ (6,764,400) $ (8,435,100) $ (12,064,700) $ (15,802,800) Less: Initial Public Offering Common Stock discount amortization (24,900) (24,900) (49,500) (49,600) Less: Public Offering Common Stock discount amortization (61,000) (61,000) (121,400) (121,400) Less: Dividends attributable to preferred stock (515,100) — (515,100) — Net loss attributable to common shareholders $ (7,365,400) $ (8,521,000) $ (12,750,700) $ (15,973,800) Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 Common Stock Preferred Stock Common Stock Preferred Stock Net loss per share, basic and diluted Allocation of undistributed net loss $ (3,398,256) $ (3,967,144) $ (8,521,000) $ — Weighted average shares outstanding, basic and diluted 1,054,277 8,000 524,402 — Basic and diluted net loss per share $ (3.22) $ (495.89) $ (16.25) $ — Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Common Stock Preferred Stock Common Stock Preferred Stock Net loss per share, basic and diluted Allocation of undistributed net loss $ (7,782,723) $ (4,967,977) $ (15,973,800) $ — Weighted average shares outstanding, basic and diluted 964,049 4,022 521,259 — Basic and diluted net loss per share $ (8.07) $ (1,235.17) $ (30.64) $ — |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | June 30, 2023 December 31, 2022 Equipment $ 3,041,900 $ 3,041,900 Leasehold improvements 7,298,500 7,298,500 Office furniture, fixtures, and equipment 137,300 137,300 Software 359,500 359,500 Construction in progress 30,400 — 10,867,600 10,837,200 Less: Accumulated depreciation (3,805,800) (2,700,300) Total $ 7,061,800 $ 8,136,900 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | June 30, 2023 December 31, 2022 Accrued litigation * $ 1,770,000 $ — Accrued compensation 323,500 668,700 Accrued consulting and outside services 221,300 212,900 Total $ 2,314,800 $ 881,600 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of lessee's operating lease right-of-use assets and lease liabilities | June 30, 2023 December 31, 2022 Operating lease Operating lease Right-of-Use Asset Operating lease $ 1,840,400 $ 2,117,300 Total right-of use asset $ 1,840,400 $ 2,117,300 Lease Liabilities Operating lease - short term $ (608,800) $ (584,400) Operating lease - long term (1,231,700) (1,544,900) Total lease liabilities $ (1,840,500) $ (2,129,300) |
Schedule of components of lease expense | Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Operating lease cost allocated to research and development expense $ 89,500 $ 131,300 $ 179,000 $ 213,700 Operating lease cost allocated to general and administrative expense 89,500 38,200 179,000 106,300 Total lease expense $ 179,000 $ 169,500 $ 358,000 $ 320,000 Weighted-average remaining lease term 2.84 3.84 2.84 3.84 Weighted-average discount rate 7.12 % 7.12 % 7.12 % 7.12 % |
Schedule of maturities of operating lease liabilities | Maturity of Lease Liabilities Operating lease 2023 (remaining) $ 358,800 2024 717,600 2025 724,700 2026 242,800 Total lease payments 2,043,900 Less: imputed interest (203,400) Present value of lease payments 1,840,500 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CONVERTIBLE DEBT | |
Schedule of convertible debt | June 30, 2023 December 31, 2022 Senior Secured Convertible Promissory Note, maturing December 12, 2023 $ — $ 4,000,000 Senior Secured Convertible Promissory Note, maturing March 28, 2024 2,000,000 — Senior Secured Convertible Promissory Note, maturing April 25, 2024 2,000,000 — Senior Secured Convertible Promissory Note, maturing May 24, 2024 2,000,000 — Senior Secured Convertible Promissory Note, maturing June 26, 2024 2,400,000 — Total Convertible Promissory Note $ 8,400,000 $ 4,000,000 Less: unamortized debt issuance costs (364,700) (190,100) Convertible Promissory Note, net $ 8,035,300 $ 3,809,900 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stock Incentive Plan 2017 | Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | 2023 2022 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding at beginning of period 11,286 $ 254.40 12,697 $ 257.10 Granted — — — — Exercised — — — — Cancelled and forfeited (5,433) 215.35 (1,401) 275.70 Balance at June 30 5,853 $ 285.36 11,296 $ 254.70 Options exercisable at June 30: 5,853 $ 285.36 11,165 $ 255.00 |
Schedule of stock-based compensation | Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ — $ 3,000 $ — $ 52,000 General and administrative — 7,000 — 15,000 Total $ — $ 10,000 $ — $ 67,000 |
Stock Incentive Plan 2017 | Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock unit activity | 2023 2022 Weighted Average Weighted Average Grant Date Grant Date Fair Value Fair Value Shares Per Share Shares Per Share Nonvested RSUs at beginning of period 650 $ 259.50 17,028 $ 374.40 Granted — — — — Vested (251) 255.85 (356) 259.20 Cancelled and forfeited (11) 260.10 (11,191) 383.70 Nonvested RSUs at June 30 388 $ 285.36 5,481 $ 362.70 |
Schedule of stock-based compensation | Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ 15,100 $ 1,900 $ 15,100 $ 13,900 General and administrative 14,500 2,400 14,500 (4,700) Total $ 29,600 $ 4,300 $ 29,600 $ 9,200 |
Stock Incentive Plan 2021 | Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | 2023 2022 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding at beginning of period 21,420 $ 12.90 — $ — Granted — — 24,480 12.90 Exercised — — — — Cancelled and forfeited (9,180) 12.90 — — Balance at June 30 12,240 $ 12.90 24,480 $ 12.90 Options exercisable at June 30: 12,240 $ 12.90 12,240 $ 12.90 Weighted average grant date fair value for options granted during the year: $ — $ 10.80 |
Stock Incentive Plan 2021 | Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock unit activity | 2023 2022 Weighted Average Weighted Average Grant Date Grant Date Fair Value Fair Value Shares Per Share Shares Per Share Nonvested RSUs at beginning of period 684 $ 133.20 2,068 $ 165.60 Granted 36,910 0.62 — — Vested (13,425) 0.62 — — Cancelled and forfeited (668) 126.60 (131) 126.60 Nonvested RSUs at June 30 23,501 $ 20.41 1,937 $ 168.30 |
Schedule of stock-based compensation | Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ 3,900 $ 17,400 $ 11,800 $ 25,700 General and administrative 1,900 19,900 14,700 29,800 Total $ 5,800 $ 37,300 $ 26,500 $ 55,500 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 6 Months Ended | |||
Mar. 10, 2023 | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
ORGANIZATION | ||||
Stock split (Reverse stock split) ratio | 30 | |||
Cash flow from operations | $ (10,588,800) | $ (13,548,000) | ||
Accumulated deficit | $ (114,012,200) | $ (101,947,500) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Unrecognized tax benefits, interest or penalties | $ 0 | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nonvested Stock Options and Warrants (Details) | 6 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Expected dividend yield | 0% |
NET LOSS PER SHARE OF COMMON _3
NET LOSS PER SHARE OF COMMON STOCK - Computation of basic and diluted earnings per share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net loss per common share | ||||||
Net loss | $ (6,764,400) | $ (5,300,300) | $ (8,435,100) | $ (7,367,700) | $ (12,064,700) | $ (15,802,800) |
Less: Initial Public Offering Common Stock discount amortization | (24,900) | (24,900) | (49,500) | (49,600) | ||
Less: Public offering Common Stock discount amortization | (61,000) | (61,000) | (121,400) | (121,400) | ||
Less: Dividends attributable to preferred stock | (515,100) | (515,100) | ||||
Net loss attributable to common shareholders, basic | (7,365,400) | (8,521,000) | (12,750,700) | (15,973,800) | ||
Net loss attributable to common shareholders, diluted | $ (7,365,400) | $ (8,521,000) | $ (12,750,700) | $ (15,973,800) | ||
Weighted average common shares outstanding, basic | 1,054,277 | 524,402 | 964,049 | 521,259 | ||
Weighted average preferred shares outstanding, basic | 8,000 | 4,022 | ||||
Weighted average common shares outstanding, diluted | 1,054,277 | 524,402 | 964,049 | 521,259 | ||
Weighted average preferred shares outstanding, diluted | 8,000 | 4,022 | ||||
Net loss per common share, basic | $ (3.22) | $ (16.25) | $ (8.07) | $ (30.64) | ||
Net loss per preferred share, basic | (495.89) | (1,235.17) | ||||
Net loss per common share, diluted | (3.22) | $ (16.25) | (8.07) | $ (30.64) | ||
Net loss per preferred share, diluted | $ (495.89) | $ (1,235.17) | ||||
Preferred Stock | ||||||
Net loss per common share | ||||||
Net loss attributable to common shareholders, basic | $ (3,967,144) | $ (4,967,977) | ||||
Net loss attributable to common shareholders, diluted | $ (3,967,144) | $ (4,967,977) | ||||
Weighted average preferred shares outstanding, basic | 8,000 | 4,022 | ||||
Weighted average preferred shares outstanding, diluted | 8,000 | 4,022 | ||||
Net loss per preferred share, basic | $ (495.89) | $ (1,235.17) | ||||
Net loss per preferred share, diluted | $ (495.89) | $ (1,235.17) | ||||
Common Stock | ||||||
Net loss per common share | ||||||
Net loss attributable to common shareholders, basic | $ (3,398,256) | $ (8,521,000) | $ (7,782,723) | $ (15,973,800) | ||
Net loss attributable to common shareholders, diluted | $ (3,398,256) | $ (8,521,000) | $ (7,782,723) | $ (15,973,800) | ||
Weighted average common shares outstanding, basic | 1,054,277 | 524,402 | 964,049 | 521,259 | ||
Weighted average common shares outstanding, diluted | 1,054,277 | 524,402 | 964,049 | 521,259 | ||
Net loss per common share, basic | $ (3.22) | $ (16.25) | $ (8.07) | $ (30.64) | ||
Net loss per common share, diluted | $ (3.22) | $ (16.25) | $ (8.07) | $ (30.64) |
NET LOSS PER SHARE OF COMMON _4
NET LOSS PER SHARE OF COMMON STOCK - Dilutive Securities Excluded From the Computations of Earnings Per Share (Details) | 3 Months Ended |
Jun. 30, 2023 shares | |
Restricted Stock Units | |
Dilutive Securities Excluded From the Computations of Earnings Per Share | |
Potentially dilutive securities | 23,936 |
Warrants | |
Dilutive Securities Excluded From the Computations of Earnings Per Share | |
Potentially dilutive securities | 15,416 |
NET LOSS PER SHARE OF COMMON _5
NET LOSS PER SHARE OF COMMON STOCK - Series C Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2023 | Apr. 30, 2023 | Apr. 02, 2023 | Dec. 31, 2022 | |
Debt conversion | |||||
Aggregate principal amount of convertible debt exchanged | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | ||
Preferred stock, issued | 8,000 | 8,000 | 0 | ||
Preferred dividends | $ 515,100 | $ 515,100 | |||
Series C Preferred Stock | |||||
Debt conversion | |||||
Annual dividend rate | 25% | ||||
Preferred stock, issued | 8,000 | 8,000 | 8,000 | ||
Preferred dividends | $ 515,100 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |||||
Property, plant and equipment, gross | $ 10,867,600 | $ 10,867,600 | $ 10,837,200 | ||
Less: Accumulated depreciation | (3,805,800) | (3,805,800) | (2,700,300) | ||
Total | 7,061,800 | 7,061,800 | 8,136,900 | ||
Depreciation | 549,600 | $ 399,100 | 1,105,400 | $ 581,900 | |
Equipment | |||||
PROPERTY AND EQUIPMENT | |||||
Property, plant and equipment, gross | 3,041,900 | 3,041,900 | 3,041,900 | ||
Leasehold improvements | |||||
PROPERTY AND EQUIPMENT | |||||
Property, plant and equipment, gross | 7,298,500 | 7,298,500 | 7,298,500 | ||
Office furniture, fixtures, and equipment | |||||
PROPERTY AND EQUIPMENT | |||||
Property, plant and equipment, gross | 137,300 | 137,300 | 137,300 | ||
Software | |||||
PROPERTY AND EQUIPMENT | |||||
Property, plant and equipment, gross | 359,500 | 359,500 | $ 359,500 | ||
Construction in progress | |||||
PROPERTY AND EQUIPMENT | |||||
Property, plant and equipment, gross | $ 30,400 | $ 30,400 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued litigation | $ 1,770,000 | |
Accrued consulting and outside services | 323,500 | $ 668,700 |
Accrued compensation | 221,300 | 212,900 |
Total | $ 2,314,800 | $ 881,600 |
NOTE PAYABLE (Details)
NOTE PAYABLE (Details) - USD ($) | 1 Months Ended | ||
Nov. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Note payable | |||
Note payable | $ 227,600 | $ 557,200 | |
Director and Officer Insurance Policy Financing | |||
Note payable | |||
Note payable | $ 610,700 | $ 227,600 | $ 557,200 |
Interest rate | 8.49% | ||
Note term | 11 months |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Legal proceedings (Details) | 3 Months Ended | 6 Months Ended | ||||
Sep. 26, 2022 USD ($) item $ / shares | Jul. 02, 2021 USD ($) | Mar. 22, 2021 $ / shares shares | Mar. 31, 2023 $ / shares shares | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Legal proceedings | ||||||
Proceeds from issuance of common stock | $ 659,100 | |||||
Subordinated convertible promissory note | $ 2,914,000 | |||||
Strategic Alliance Agreement | ||||||
Legal proceedings | ||||||
Proceeds from issuance of common stock | $ 40,000,000 | |||||
Jason Terrell - 2014 Consulting Agreement | ||||||
Legal proceedings | ||||||
Number of stock options sought | shares | 16,667 | |||||
Stock option exercise price | $ / shares | $ 5.10 | |||||
Jason Terrell - 2017 Non-employee Director Options Agreement | ||||||
Legal proceedings | ||||||
Number of stock options sought | shares | 16,667 | |||||
Stock option exercise price | $ / shares | $ 5.10 | |||||
Sabby Entities | ||||||
Legal proceedings | ||||||
Cash settlement payments | $ 75,000 | |||||
Convertible notes issued in settlement of legal proceedings | $ 1,656,720 | |||||
Conversion price | $ / shares | $ 9.20 | $ 9.20 | ||||
Maximum beneficial ownership percentage | 9.99% | |||||
Subordinated convertible promissory note | 1,411,300 | |||||
Shares issued in conversion of subordinated promissory notes | shares | 153,333 | |||||
Sabby Entities | Maximum | ||||||
Legal proceedings | ||||||
Maximum shares to be issued under conversion | item | 180,000 | |||||
Empery Entities | ||||||
Legal proceedings | ||||||
Cash settlement payments | $ 75,000 | |||||
Convertible notes issued in settlement of legal proceedings | $ 1,656,720 | |||||
Conversion price | $ / shares | $ 9.20 | $ 9.20 | ||||
Maximum beneficial ownership percentage | 9.99% | |||||
Subordinated convertible promissory note | $ 1,502,700 | |||||
Shares issued in conversion of subordinated promissory notes | shares | 163,268 | |||||
Empery Entities | Maximum | ||||||
Legal proceedings | ||||||
Maximum shares to be issued under conversion | item | 180,000 |
LEASES - Lease information (Det
LEASES - Lease information (Details) | 2 Months Ended | ||||
Jun. 05, 2023 USD ($) item | May 01, 2022 USD ($) ft² item | Jan. 01, 2022 | Aug. 01, 2021 ft² | Dec. 31, 2021 ft² item | |
Leases | |||||
Lease, Practical Expedients, Package [true false] | true | ||||
Additional office space leased | ft² | 9,352 | 15,385 | 3,684 | ||
Period of time after notice of cancellation that the lease effectively terminates | 90 days | 90 days | 90 days | ||
Number of lease amendments executed | item | 2 | ||||
Number of months rent due as a termination payment if lease cancellation option exercised | item | 3 | ||||
Monthly rent - Years one and two | $ 4,800 | ||||
Monthly rent - Years three and four | 4,896 | ||||
Monthly rent - Year five | $ 5,000 | ||||
Number of suites sublet | item | 3 | ||||
Monthly rent on subleases | $ 6,444 |
LEASES - Balance sheet disclosu
LEASES - Balance sheet disclosures (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Operating lease right-of-use asset | $ 1,840,400 | $ 2,117,300 |
Operating lease liability - short term | (608,800) | (584,400) |
Operating lease liability - long term | (1,231,700) | (1,544,900) |
Total lease liabilities | $ (1,840,500) | $ (2,129,300) |
LEASES - Components of lease ex
LEASES - Components of lease expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating leases | ||||
Operating lease cost | $ 179,000 | $ 169,500 | $ 358,000 | $ 320,000 |
Weighted-average remaining lease term | 2 years 10 months 2 days | 3 years 10 months 2 days | 2 years 10 months 2 days | 3 years 10 months 2 days |
Weighted-average discount rate | 7.12% | 7.12% | 7.12% | 7.12% |
Research and development | ||||
Operating leases | ||||
Operating lease cost | $ 89,500 | $ 131,300 | $ 179,000 | $ 213,700 |
General and administrative | ||||
Operating leases | ||||
Operating lease cost | $ 89,500 | $ 38,200 | $ 179,000 | $ 106,300 |
LEASES - Operating lease liabil
LEASES - Operating lease liability maturities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Operating leases | ||
2023 (remaining) | $ 358,800 | |
2024 | 717,600 | |
2025 | 724,700 | |
2026 | 242,800 | |
Total lease payments | 2,043,900 | |
Less: imputed interest | (203,400) | |
Present value of lease payments | $ 1,840,500 | $ 2,129,300 |
LEASES - Short-term Lease (Deta
LEASES - Short-term Lease (Details) - USD ($) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Leases | ||
Monthly rent expense on short-term lease | $ 2,500 | |
Short-term lease expense | $ 15,000 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) | 6 Months Ended | |
Jun. 30, 2023 USD ($) item | Apr. 30, 2023 USD ($) | |
Debt Instrument | ||
Proceeds from senior secured convertible note payable | $ 12,400,000 | |
Aggregate principal amount of convertible debt exchanged | $ 8,000,000 | $ 8,000,000 |
25% Senior Secured Convertible Promissory Notes | ||
Debt Instrument | ||
Number of promissory notes issued | item | 8 | |
Principal amount | $ 16,400,000 | |
Proceeds from senior secured convertible note payable | $ 12,400,000 | |
Interest rate (as a percent) | 25% | 25% |
Note term | 1 year | |
Interest rate increase to per annum | 27% | |
Aggregate principal amount of convertible debt exchanged | $ 8,000,000 |
CONVERTIBLE DEBT- Maturity (Det
CONVERTIBLE DEBT- Maturity (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument | ||
Total Convertible Promissory Note | $ 8,400,000 | $ 4,000,000 |
Less: unamortized debt issuance costs | (364,700) | (190,100) |
Convertible Promissory Note, net | 8,035,300 | 3,809,900 |
Senior Secured Convertible Promissory Note, maturing December 12, 2023 | ||
Debt Instrument | ||
Total Convertible Promissory Note | $ 4,000,000 | |
Senior Secured Convertible Promissory Note, maturing March 28, 2024 | ||
Debt Instrument | ||
Total Convertible Promissory Note | 2,000,000 | |
Senior Secured Convertible Promissory Note, maturing April 25, 2024 | ||
Debt Instrument | ||
Total Convertible Promissory Note | 2,000,000 | |
Senior Secured Convertible Promissory Note, maturing May 24, 2024 | ||
Debt Instrument | ||
Total Convertible Promissory Note | 2,000,000 | |
Senior Secured Convertible Promissory Note, maturing June 26, 2024 | ||
Debt Instrument | ||
Total Convertible Promissory Note | $ 2,400,000 |
STOCKHOLDERS EQUITY - Stock (De
STOCKHOLDERS EQUITY - Stock (Details) | 6 Months Ended | ||
Jun. 30, 2023 USD ($) Vote $ / shares shares | Apr. 02, 2023 $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Common stock | |||
Preferred stock, authorized | 60,000,000 | 60,000,000 | |
Common stock, authorized | 300,000,000 | 300,000,000 | |
Common stock, issued | 1,176,260 | 648,384 | |
Common stock, outstanding | 1,176,260 | 648,384 | |
Preferred stock, issued | 8,000 | 0 | |
Preferred stock, outstanding | 8,000 | 0 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Series A-1 Preferred Stock | |||
Common stock | |||
Preferred stock, authorized | 24,000,000 | 24,000,000 | |
Series B Preferred Stock | |||
Common stock | |||
Preferred stock, authorized | 16,500,000 | 16,500,000 | |
Series C Preferred Stock | |||
Common stock | |||
Preferred stock, authorized | 8,000 | ||
Preferred stock, issued | 8,000 | 8,000 | |
Preferred stock, outstanding | 8,000 | ||
Number of entitled votes per share | Vote | 1 | ||
Annual dividend rate | 25% | ||
Liquidation preference, value | $ | $ 8,515,100 | $ 0 | |
Common Stock | |||
Common stock | |||
Number of entitled votes per share | Vote | 1 |
STOCKHOLDERS' EQUITY - Exchange
STOCKHOLDERS' EQUITY - Exchange Agreement (Details) | 1 Months Ended | |||
Apr. 30, 2023 USD ($) item shares | Jun. 30, 2023 USD ($) shares | Apr. 02, 2023 shares | Dec. 31, 2022 shares | |
Note Purchase Agreement | ||||
Aggregate principal amount of convertible debt exchanged | $ | $ 8,000,000 | $ 8,000,000 | ||
Preferred stock, issued | shares | 8,000 | 0 | ||
Series C Preferred Stock | ||||
Note Purchase Agreement | ||||
Preferred stock, issued | shares | 8,000 | 8,000 | ||
25% Senior Secured Convertible Promissory Notes | ||||
Note Purchase Agreement | ||||
Aggregate principal amount of convertible debt exchanged | $ | $ 8,000,000 | |||
Interest rate (as a percent) | 25% | 25% | ||
Number of promissory notes exchanged | item | 4 | |||
Principal amount of the individual debt instruments exchanged. | $ | $ 2,000,000 | |||
25% Senior Secured Convertible Promissory Notes | Series C Preferred Stock | ||||
Note Purchase Agreement | ||||
Preferred stock, issued | shares | 8,000 |
STOCKHOLDERS EQUITY - Represent
STOCKHOLDERS EQUITY - Representative's Warrants (Details) - Common Stock Warrants - Representative - $ / shares | Jul. 02, 2021 | Oct. 15, 2020 |
Initial Public Offering | ||
Weighted average valuation assumptions | ||
Warrants and Rights Outstanding, Term | 5 years | |
Warrants | ||
Number of warrants granted | 2,083 | |
Warrant exercise price | $ 450 | |
Public Offering | ||
Weighted average valuation assumptions | ||
Warrants and Rights Outstanding, Term | 5 years | |
Warrants | ||
Number of warrants granted | 13,333 | |
Warrant exercise price | $ 187.50 |
STOCKHOLDERS' EQUITY - Standby
STOCKHOLDERS' EQUITY - Standby Equity Purchase Agreement (Details) - USD ($) | 6 Months Ended | ||
Jun. 02, 2023 | May 24, 2023 | Jun. 30, 2023 | |
Note Purchase Agreement | |||
Proceeds from issuance of common stock | $ 659,100 | ||
Standby Equity Purchase Agreement Financing | |||
Note Purchase Agreement | |||
Shares issued | 100,000 | 97,000 | |
Stock purchase price | $ 2.82 | $ 3.89 | |
Proceeds from issuance of common stock | $ 282,100 | $ 377,000 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock Incentive Plan 2017 | ||||
Restricted stock units | ||||
Stock compensation expense | $ 29,600 | $ 4,300 | $ 29,600 | $ 9,200 |
Unrecognized stock compensation expenses | $ 96,600 | $ 96,600 | ||
Restricted stock unit activity | ||||
Nonvested RSUs at beginning of year | 650 | 17,028 | ||
Vested | (251) | (356) | ||
Cancelled and forfeited | (11) | (11,191) | ||
Nonvested RSUs at June 30 | 388 | 5,481 | 388 | 5,481 |
Weighted average grant day fair value per share | ||||
Nonvested RSUs at beginning of year | $ 259.50 | $ 374.40 | ||
Vested | 255.85 | 259.20 | ||
Cancelled and forfeited | 260.10 | 383.70 | ||
Nonvested RSUs at June 30 | $ 285.36 | $ 362.70 | $ 285.36 | $ 362.70 |
Stock Incentive Plan 2017 | Research and development | ||||
Restricted stock units | ||||
Stock compensation expense | $ 15,100 | $ 1,900 | $ 15,100 | $ 13,900 |
Stock Incentive Plan 2017 | General and administrative | ||||
Restricted stock units | ||||
Stock compensation expense | 14,500 | 2,400 | 14,500 | (4,700) |
Stock Incentive Plan 2021 | ||||
Restricted stock units | ||||
Stock compensation expense | $ 5,800 | $ 37,300 | $ 26,500 | $ 55,500 |
Restricted stock unit activity | ||||
Nonvested RSUs at beginning of year | 684 | 2,068 | ||
Granted | 36,910 | |||
Vested | (13,425) | |||
Cancelled and forfeited | (668) | (131) | ||
Nonvested RSUs at June 30 | 23,501 | 1,937 | 23,501 | 1,937 |
Weighted average grant day fair value per share | ||||
Nonvested RSUs at beginning of year | $ 133.20 | $ 165.60 | ||
Granted | 0.62 | |||
Vested | 0.62 | |||
Cancelled and forfeited | 126.60 | 126.60 | ||
Nonvested RSUs at June 30 | $ 20.41 | $ 168.30 | $ 20.41 | $ 168.30 |
Stock Incentive Plan 2021 | Research and development | ||||
Restricted stock units | ||||
Stock compensation expense | $ 3,900 | $ 17,400 | $ 11,800 | $ 25,700 |
Stock Incentive Plan 2021 | General and administrative | ||||
Restricted stock units | ||||
Stock compensation expense | $ 1,900 | $ 19,900 | $ 14,700 | $ 29,800 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - Stock Options - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Stock Incentive Plan 2017 | ||||
Stock option activity | ||||
Options outstanding at beginning of year | 11,286 | 12,697 | 12,697 | |
Cancelled and forfeited | (5,433) | (1,401) | ||
Balance at June 30: | 11,296 | 5,853 | 11,296 | 11,286 |
Options exercisable at June 30 | 11,165 | 5,853 | 11,165 | |
Intrinsic value of options exercisable | $ 0 | $ 0 | ||
Weighted average exercise price | ||||
Options outstanding at beginning of year | $ 254.40 | $ 257.10 | $ 257.10 | |
Cancelled and forfeited | 215.35 | 275.70 | ||
Balance at June 30 | $ 254.70 | 285.36 | 254.70 | $ 254.40 |
Options exercisable at June 30 | $ 255 | $ 285.36 | $ 255 | |
Additional stock option information | ||||
Stock compensation expense | $ 10,000 | $ 67,000 | ||
Total unrecognized stock compensation expense | $ 0 | |||
Weighted-average remaining contractual life | 4 years 5 months 4 days | 4 years 11 months 4 days | ||
Stock Incentive Plan 2017 | Research and development | ||||
Additional stock option information | ||||
Stock compensation expense | 3,000 | 52,000 | ||
Stock Incentive Plan 2017 | General and administrative | ||||
Additional stock option information | ||||
Stock compensation expense | $ 7,000 | $ 15,000 | ||
Stock Incentive Plan 2021 | ||||
Stock option activity | ||||
Options outstanding at beginning of year | 21,420 | |||
Granted | 24,480 | |||
Cancelled and forfeited | (9,180) | |||
Balance at June 30: | 24,480 | 12,240 | 24,480 | 21,420 |
Options exercisable at June 30 | 12,240 | 12,240 | 12,240 | |
Weighted average exercise price | ||||
Options outstanding at beginning of year | $ 12.90 | |||
Granted | $ 12.90 | |||
Cancelled and forfeited | 12.90 | |||
Balance at June 30 | $ 12.90 | 12.90 | 12.90 | $ 12.90 |
Options exercisable at June 30 | $ 12.90 | $ 12.90 | 12.90 | |
Weighted average grant date fair value for options granted and expected to be vested during the year: | $ 10.80 | |||
Additional stock option information | ||||
Stock compensation expense | $ 0 | $ 0 | ||
Weighted-average remaining contractual life | 4 years 11 months 4 days |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
INCOME TAXES | ||||
Effective tax rate from continuing operations | 0% | 0% | 0% | 0% |
Income tax provision | $ 0 | $ 0 | ||
Federal statutory rate | 21% | 21% | 21% | 21% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jul. 18, 2023 USD ($) item shares | Apr. 30, 2023 USD ($) item shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) item $ / shares shares | Aug. 07, 2023 USD ($) | Jul. 25, 2023 USD ($) $ / shares | Apr. 02, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Subsequent events | ||||||||
Aggregate principal amount of convertible debt exchanged | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | |||||
Preferred stock, issued | shares | 8,000 | 8,000 | 0 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Litigation settlement loss | $ 1,770,000 | $ 1,770,000 | ||||||
25% Senior Secured Convertible Promissory Notes | ||||||||
Subsequent events | ||||||||
Principal amount | $ 16,400,000 | $ 16,400,000 | ||||||
Aggregate principal amount of convertible debt exchanged | $ 8,000,000 | |||||||
Interest rate (as a percent) | 25% | 25% | 25% | |||||
Number of promissory notes issued | item | 8 | |||||||
Number of promissory notes exchanged | item | 4 | |||||||
Principal amount of the individual debt instruments exchanged. | $ 2,000,000 | |||||||
Interest rate increase to per annum | 27% | |||||||
Series C Preferred Stock | ||||||||
Subsequent events | ||||||||
Preferred stock, issued | shares | 8,000 | 8,000 | 8,000 | |||||
Series C Preferred Stock | 25% Senior Secured Convertible Promissory Notes | ||||||||
Subsequent events | ||||||||
Preferred stock, issued | shares | 8,000 | |||||||
Subsequent Event | Settled Litigation | Class Action | ||||||||
Subsequent events | ||||||||
Cash reserve in escrow | $ 2,300,000 | |||||||
Portion of litigation settlement to be reimbursed by insurance carrier | $ 530,000 | |||||||
Subsequent Event | 25% Senior Secured Convertible Promissory Notes | ||||||||
Subsequent events | ||||||||
Principal amount | $ 6,000,000 | |||||||
Aggregate principal amount of convertible debt exchanged | $ 6,000,000 | |||||||
Interest rate (as a percent) | 25% | |||||||
Number of promissory notes issued | item | 3 | |||||||
Principal amount of the individual debt instruments exchanged. | $ 2,000,000 | |||||||
Subsequent Event | 25% Senior Secured Convertible Promissory Note, Maturing July 2024 | ||||||||
Subsequent events | ||||||||
Principal amount | $ 2,400,000 | |||||||
Interest rate (as a percent) | 25% | |||||||
Increased interest rate in event of default | 27% | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Conversion price | $ / shares | $ 6.50 | |||||||
Maximum beneficial ownership percentage | 9.99% | |||||||
Subsequent Event | Series C Preferred Stock | ||||||||
Subsequent events | ||||||||
Preferred stock, issued | shares | 6,000 |