Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 29, 2022 | Jul. 02, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-40544 | ||
Entity Registrant Name | Aerovate Therapeutics, Inc. | ||
Entity Central Index Key | 0001798749 | ||
Entity Tax Identification Number | 83-1377888 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 930 Winter Street | ||
Entity Address, Address Line Two | Suite M-500 | ||
Entity Address, City or Town | Waltham | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02116 | ||
City Area Code | (617) | ||
Local Phone Number | 443-2400 | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | ||
Trading Symbol | AVTE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
Elected Not To Use the Extended Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 185,087,806 | ||
Entity Common Stock, Shares Outstanding | 24,410,393 | ||
Documents Incorporated By Reference | The registrant intends to file a definitive proxy statement pursuant to Regulation 14A relating to the 2022 Annual Meeting of Stockholders within 120 days of the end of the registrant’s fiscal year ended December 31, 2021. Portions of such definitive proxy statement are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Location | San Diego, California | ||
Auditor Firm ID | 185 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 54,197 | $ 4,573 |
Short-term investments | 113,178 | |
Prepaid expenses and other current assets (Note 4) | 6,958 | 103 |
Total current assets | 174,333 | 4,676 |
Property and equipment, net | 186 | 39 |
Operating lease right-of-use asset | 542 | |
Other long-term assets | 302 | |
Total assets | 175,363 | 4,715 |
Current liabilities: | ||
Accounts payable (including related party amounts of $2 and $6, respectively) | 1,208 | 618 |
Accrued and other current liabilities (Note 4) | 1,150 | 1,156 |
Operating lease liability | 192 | |
Total current liabilities | 2,550 | 1,774 |
Operating lease liabilities, net of current portion | 382 | |
Other liabilities | 13 | |
Total liabilities | 2,945 | 1,774 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity (deficit): | ||
Common stock, $0.0001 par value; 150,000,000 and 50,000,000 shares authorized at December 31, 2021 and December 31, 2020, respectively; 24,410,393 and 243,076 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 2 | |
Additional paid-in capital | 208,867 | 63 |
Accumulated other comprehensive loss | (59) | |
Accumulated deficit | (36,392) | (13,407) |
Total stockholders’ equity (deficit) | 172,418 | (13,344) |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | 175,363 | 4,715 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Current liabilities: | ||
Temporary Equity Value | 12,285 | |
Series Seed Redeemable Convertible Preferred Stock [Member] | ||
Current liabilities: | ||
Temporary Equity Value | $ 4,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts payable related party current | $ 2 | $ 6 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 50,000,000 |
Common stock, shares issued | 24,410,393 | 243,076 |
Common stock, shares outstanding | 24,410,393 | 243,076 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Temporary equity shares, value per share | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 0 | 40,052,154 |
Temporary equity shares issued | 0 | 6,489,534 |
Temporary equity shares outstanding | 0 | 6,489,534 |
Series Seed Redeemable Convertible Preferred Stock [Member] | ||
Temporary equity shares, value per share | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 0 | 4,000,000 |
Temporary equity shares issued | 0 | 4,000,000 |
Temporary equity shares outstanding | 0 | 4,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | ||
Research and development (includes related party amounts of $76 and $72, respectively) | $ 14,987 | $ 7,940 |
General and administrative (includes related party amounts of $14 and $31, respectively) | 8,035 | 949 |
Total operating expenses | 23,022 | 8,889 |
Loss from operations | (23,022) | (8,889) |
Other income (expense): | ||
Interest income (expense) | 65 | (75) |
Change in fair value of convertible promissory notes | (644) | |
Other expense | (3) | (3) |
Total other income (expense) | 62 | (722) |
Net loss before income taxes | (22,960) | (9,611) |
Provision for income taxes | 3 | |
Net loss | (22,963) | (9,611) |
Comprehensive loss: | ||
Net loss | (22,963) | (9,611) |
Other comprehensive loss: | ||
Unrealized loss on securities | (59) | |
Comprehensive loss | $ (23,022) | $ (9,611) |
Net loss per share, basic and diluted | $ (1.87) | $ (40.31) |
Weighted-average shares of common stock outstanding, basic and diluted | 12,293,629 | 242,232 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Research and development, related party | $ 76 | $ 72 |
General and administrative, related party | $ 14 | $ 31 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Preferred Stock [Member]Series A Redeemable Convertible Preferred Stock [Member] | Preferred Stock [Member]Series Seed Redeemable Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, shares at Dec. 31, 2019 | 4,000,000 | ||||||
Beginning balance at Dec. 31, 2019 | $ 4,000 | ||||||
Beginning balance, shares at Dec. 31, 2019 | 241,467 | ||||||
Beginning balance at Dec. 31, 2019 | $ (3,643) | $ (3,643) | |||||
Issuance of Series A redeemable convertible preferred stock upon conversion of December 2019 convertible promissory notes to related party | $ 3,219 | ||||||
Issuance of Series A redeemable convertible preferred stock upon conversion of December 2019 convertible promissory notes to related party, Shares | 1,700,343 | ||||||
Issuance of Series A redeemable convertible preferred stock upon conversion of July 2020 convertible promissory notes to related party | $ 2,500 | ||||||
Issuance of Series A redeemable convertible preferred stock upon conversion of July 2020 convertible promissory notes to related party, Shares | 1,320,655 | ||||||
Issuance of Series A redeemable convertible preferred stock per share, net of issuance costs | $ 6,413 | ||||||
Issuance of Series A redeemable convertible preferred stock per share, net of issuance costs, shares | 3,468,536 | ||||||
Accretion of Series A redeemable convertible preferred stock to redemption value | $ 153 | (153) | (153) | ||||
Issuance of common stock upon exercise of stock options | 5 | 5 | |||||
Issuance of common stock upon exercise of stock options, shares | 1,609 | ||||||
Stock based compensation | 58 | 58 | |||||
Unrealized loss on investments | |||||||
Net loss | (9,611) | (9,611) | |||||
Ending balance, shares at Dec. 31, 2020 | 6,489,534 | 4,000,000 | |||||
Ending balance at Dec. 31, 2020 | $ 12,285 | $ 4,000 | |||||
Ending balance, shares at Dec. 31, 2020 | 243,076 | ||||||
Ending balance at Dec. 31, 2020 | 63 | (13,407) | (13,344) | ||||
Issuance of Series A redeemable convertible preferred stock per share, net of issuance costs | $ 63,512 | ||||||
Issuance of Series A redeemable convertible preferred stock per share, net of issuance costs, shares | 33,562,620 | ||||||
Accretion of Series A redeemable convertible preferred stock to redemption value | $ 22 | (22) | $ (22) | ||||
Issuance of common stock upon exercise of stock options, shares | |||||||
Stock based compensation | 2,043 | $ 2,043 | |||||
Unrealized loss on investments | (59) | (59) | |||||
Net loss | (22,963) | (22,963) | |||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | $ (75,819) | $ (4,000) | $ 1 | 79,817 | 79,818 | ||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering, Shares | (40,052,154) | (4,000,000) | 14,182,854 | ||||
Issuance of common stock upon initial public offering, net of issuance costs | $ 1 | 126,944 | 126,945 | ||||
Issuance of common stock upon initial public offering, net of issuance costs, shares | 9,984,463 | ||||||
Ending balance, shares at Dec. 31, 2021 | |||||||
Ending balance at Dec. 31, 2021 | |||||||
Ending balance, shares at Dec. 31, 2021 | 24,410,393 | ||||||
Ending balance at Dec. 31, 2021 | $ 2 | $ 208,867 | $ (59) | $ (36,392) | $ 172,418 |
Consolidated Statements of Re_2
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accretion of Series A redeemable convertible preferred stock | $ (22) | $ (153) |
Preferred Stock [Member] | Series A Redeemable Convertible Preferred Stock [Member] | ||
Share price | $ 1.893 | $ 1.893 |
Accretion of Series A redeemable convertible preferred stock | $ 22 | $ 153 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flow from operating activities: | ||
Net loss | $ (22,963) | $ (9,611) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 2,043 | 58 |
Depreciation and amortization expense | 15 | 1 |
Accretion of discounts and amortization of premiums on investments, net | 16 | |
Non-cash interest expense | 75 | |
Change in fair value of convertible promissory notes to related party | 644 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (6,855) | (103) |
Other long-term assets | (302) | |
Accounts payable | 609 | 37 |
Accrued and other liabilities | (6) | 1,040 |
Operating lease asset and liability, net | 32 | |
Other liabilities | 12 | |
Net cash used in operating activities | (27,399) | (7,859) |
Cash flow from investing activities: | ||
Purchases of investments | (113,253) | |
Purchases of property and equipment | (181) | |
Net cash used in investing activities | (113,434) | |
Cash flow from financing activities: | ||
Proceeds from sale of Series A redeemable convertible preferred stock, net of issuance costs | 63,512 | 6,413 |
Proceeds from issuance of convertible promissory notes to related party | 2,500 | |
Proceeds from exercise of stock options | 5 | |
Proceeds from issuance of common stock, net of issuance costs | 126,945 | |
Net cash provided by financing activities | 190,457 | 8,918 |
Net increase in cash | 49,624 | 1,059 |
Cash and cash equivalents at the beginning of the year | 4,573 | 3,514 |
Cash and cash equivalents at the end of the period | 54,197 | 4,573 |
Supplemental disclosure of noncash investing and financing activities: | ||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | 79,818 | |
Right-of-use asset obtained in exchange for operating lease liability | 542 | |
Purchases of property and equipment in accounts payable | 21 | 40 |
Conversion of convertible promissory notes to related party to Series A redeemable convertible preferred stock | (3,219) | |
Conversion of convertible promissory notes to related party to Series A redeemable convertible preferred stock | $ (2,500) |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization and Nature of Operations Aerovate Therapeutics Inc. (“Aerovate” or the “Company”) was incorporated in the state of Delaware in July 2018, and is headquartered in Waltham, Massachusetts. The Company has a wholly owned subsidiary, Aerovate Securities Corporation. The Company is a clinical stage biopharmaceutical company that is focused on the development of drugs that meaningfully improve the lives of patients with rare cardiopulmonary disease. The Company’s initial focus is on advancing AV-101, the Company’s dry powder inhaled formulation of imatinib for the treatment of pulmonary arterial hypertension (“PAH”). The Company initiated a Phase 2b/Phase 3 trial of AV-101 in PAH patients in December 2021. (b) Initial Public Offering On July 2, 2021, the Company completed its initial public offering (“IPO”). The Company’s Registration Statement on Form S-1 (File No. 333-256949) relating to the IPO was declared effective by the Securities and Exchange Commission (“SEC”) on June 29, 2021. The shares began trading on The Nasdaq Global Market on June 30, 2021. The Company issued 9,984,463 1,302,321 14.00 14,182,854 126.9 (c) Liquidity and Management Plans Since inception, the Company has devoted substantially all of its resources to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations and has not realized revenues from its planned principal operations. The Company has incurred losses and negative cash flows from operations since inception. In addition, the Company expects to incur substantial operating losses for the next several years as it continues its research and development activities. As of December 31, 2021, the Company had cash and cash equivalents and short-term investments of $ 167.4 Management plans to continue to incur substantial costs in order to conduct research and development activities and additional capital will be needed to undertake these activities. The Company intends to raise such capital through debt or equity financings or other arrangements to fund operations. Management believes that the Company’s current cash and cash equivalents and short-term investments will provide sufficient funds to enable the Company to meet its obligations for at least twelve months from the filing date of this report. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | (2) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company’s wholly owned subsidiary, Aerovate Securities Corporation. All intercompany transactions and balances have been eliminated in consolidation. (b) Reverse Stock Split On June 22, 2021, the Company effected a 1-for-3.1060103 reverse stock split (the “Reverse Stock Split”) of its issued and outstanding common stock. Accordingly, the conversion ratio for the Company’s outstanding convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. The par value of the common stock was not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, early exercised options, share data, per share data, convertible preferred stock (to the extent presented on an as-converted to common stock basis) and related information contained in these consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented . (c) Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, and financial condition will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets. Actual results could differ materially from those estimates. Accounting estimates and management judgements reflected in the consolidated financial statements include: normal recurring accruals, including the accrual for research and development expenses, stock-based compensation and fair value of investments. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. (d) Cash and Cash Equivalents Cash and cash equivalents include cash in readily available checking accounts, money market funds and commercial paper. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. (e) Short-term Investments Short-term investments consist of corporate debt securities, commercial paper and U.S. Treasury bills, classified as available-for-sale securities and have maturities of greater than three months. The Company has classified all of its available-for-sale investment securities as current assets on the consolidated balance sheets because these are considered highly liquid securities and are available for use in current operations. The Company carries these securities at fair value and reports unrealized gains and losses as a separate component of accumulated other comprehensive loss. The cost of debt securities is adjusted for amortization of purchase premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income in the consolidated statements of operations and comprehensive loss. Realized gains and losses on sales of securities are determined using the specific identification method and recorded in other income (expense), net in the consolidated statement of operations and comprehensive loss . (f) Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash, cash equivalents and short-term investments. The Company maintains cash, cash equivalents and short-term investments with various high credit quality banks and other financial institutions in the United States. Such deposits may be in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company has not experienced any losses on deposits since inception. (g) Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company displays comprehensive loss and its components as part of the consolidated statements of operations and comprehensive loss. (h) Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts of prepaid expenses and other current assets, accounts payable, accrued liabilities and other current liabilities are reasonable estimates of their fair value due to the short-term nature of these accounts. Convertible promissory notes were classified within the Level 3 designation and were recorded at fair value on a recurring basis prior to their conversion during the year ended December 31, 2020. (i) Prepaid Expenses and Other Current Assets Any expenses paid prior to the related services rendered are recorded as prepaid expenses. Such prepaid expenses are expensed in the period the expense is incurred. If the expense is for a service covering multiple periods, it is expensed from the date the services begin and over the period of the service rendered (or contract service period if services rendered dates are not defined). (j) Property and Equipment, Net Property and equipment, which consist of leasehold improvements, furniture and fixtures, research equipment, computers and construction-in-progress are stated at cost less accumulated depreciation or accumulated amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets, which ranges from three to five years. Leasehold improvements are amortized over the remaining life of the lease for leasehold improvements at the time the asset is placed into service. (k) Impairment of Long-lived Assets The carrying value of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future undiscounted cash flows, expected to result from the use of the asset and its eventual disposition, are less than its carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Through December 31, 2021, there has been no such impairment losses recorded by the Company. (l) Leases At the commencement date of a lease, the Company recognizes lease liabilities which represent its obligation to make lease payments, and right-of-use assets (“ROU assets”) which represent its right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date. The ROU asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred by the Company and excludes lease incentives. ROU assets are recorded in operating lease ROU assets and lease liabilities are recorded in operating lease liabilities, current and noncurrent in the consolidated balance sheets. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to separate lease and non-lease components and not recognize lease liabilities and ROU assets for short-term leases with terms of twelve months or less. (m) Fair Value Option As permitted under Accounting Standards Codification (“ASC”) 825, Financial Instruments (n) Convertible Preferred Stock The Company records convertible preferred stock at fair value on the dates of issuance, net of issuance costs. Upon the occurrence of certain events that are outside the Company’s control, including a deemed liquidation event, holders of the convertible preferred stock can cause redemption for cash. Therefore, convertible preferred stock is classified outside of stockholders’ deficit on the balance sheets as events triggering the liquidation preferences are not solely within the Company’s control. The carrying values of the convertible preferred stock are adjusted to their liquidation preferences if and when it becomes probable that such a liquidation event will occur. (o) Research and Development Expenses Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and other benefits of research and development personnel, including associated share-based compensation, costs related to research activities, preclinical studies, clinical trial, drug manufacturing and allocated overhead and facility-related expenses. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred. (p) Stock-Based Compensation Stock-based compensation expense represents the cost of the grant-date fair value of employee, officer, director, and non-employee stock option grants, estimated in accordance with the applicable accounting guidance, recognized using the straight-line method over the vesting period for service-based options and using the graded vesting method for performance-based options. The vesting period generally approximates the expected service period of the awards. Forfeitures are recognized and accounted for as they occur. The fair value of stock options is estimated using a Black-Scholes option pricing model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, expected dividend yield, and a risk-free interest rate. Options granted during the year have a maximum contractual term of ten years. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The expected volatility of stock options is based upon the historical volatility of a number of publicly traded companies in similar stages of clinical development. The Company has historically not declared or paid any dividends and does not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the U.S. Department of Treasury (“U.S. Treasury”) yield in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock options. (q) Income Taxes Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss (“NOL”) and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded if, based upon the weight of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. (r) Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment. (s) Net Loss Per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period. Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is antidilutive. The Company’s potentially dilutive securities, which include convertible preferred stock prior to the conversion of such shares to common stock and outstanding stock options under the Company’s equity incentive plan, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. The following table summarizes the Company’s net loss per share: SCHEDULE OF NET LOSS PER SHARE Years Ended December 31, 2021 2020 Numerator: Net loss $ (22,963 ) $ (9,611 ) Accretion of Series A redeemable convertible preferred stock to redemption value (22 ) (153 ) Net loss available to common stockholders $ (22,985 ) $ (9,764 ) Denominator: Weighted-average common stock outstanding, basic and diluted 12,293,629 242,232 Net loss per share, basic and diluted $ (1.87 ) $ (40.31 ) Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would have had an anti-dilutive effect are as follows (in common stock equivalent shares): SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE December 31, 2021 2020 Options to purchase common stock 3,454,374 229,105 Series Seed redeemable convertible preferred stock - 1,287,825 Series A redeemable convertible preferred stock - 2,089,341 3,454,374 3,606,271 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | (3) FAIR VALUE OF FINANCIAL INSTRUMENTS The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands): SCHEDULE OF FAIR VALUE INSTRUMENTS December 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (level 3) Fair Value Measurements Using December 31, Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 3) Assets: Cash equivalents Money market funds $ 39,653 $ 39,653 $ - $ - Commercial paper 14,448 - 14,448 - Total cash equivalents 54,101 39,653 14,448 - Short-term investments U.S. Treasury bills 25,135 25,135 - - Corporate debt securities 10,715 - 10,715 Commercial paper 77,328 - 77,328 - Total short-term investments 113,178 25,135 88,043 - Total $ 167,279 $ 64,788 $ 102,491 $ - The Company’s cash as of December 31, 2020, of $ 4.6 Cash Equivalents and Short-Term Investments Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and short-term investments. Cash equivalents consisted of cash, money market funds and commercial paper, and short-term investments consisted of U.S. Treasury bills, corporate debt securities and commercial paper. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. The following tables summarize the Company’s short-term investments as of December 31, 2021 (in thousands): SUMMARY OF SHORT TERM INVESTMENT As of December 31, 2021 Maturity Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities 1 year or less $ 10,726 $ - $ (11 ) $ 10,715 Commercial paper 1 year or less 77,328 9 (9 ) 77,328 U.S. Treasury bills 2 years or less 25,183 - (48 ) 25,135 $ 113,237 $ 9 $ (68 ) $ 113,178 As of December 31, 2020, the Company had no The Company considers whether unrealized losses have resulted from a credit loss or other factors. The unrealized losses on the Company’s available-for-sale securities as of December 31, 2021 were caused by fluctuations in market value and interest rates as a result of the economic environment and not credit risk. The Company concluded that an allowance for credit losses was unnecessary as of December 31, 2021. It is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. Unrealized gains and losses are included in accumulated other comprehensive loss. The Company excludes accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities for the purposes of identifying and measuring an impairment and to not measure an allowance for expected credit losses for accrued interest receivables. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. It is the Company’s policy to present the accrued interest receivable balance as part of prepaid expenses and other current assets in the balance sheets. Accrued interest receivable related to short-term investments was $ 0.1 Convertible Promissory Notes The Company had no liabilities measured using significant unobservable inputs (Level 3) for the year ended December 31, 2021. The following table presents the changes in estimated fair value of the Company’s Level 3 liabilities for the year ended December 31, 2020 (in thousands): SUMMARY OF RECONCILIATION OF ALL LIABILITIES MEASURED AT FAIR VALUE USING LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS Convertible Promissory Notes Balance at December 31, 2019 $ 2,500 Issuance of convertible promissory notes, related party 2,500 Change in fair value of convertible promissory notes, related party 644 Exchange of convertible promissory notes (Note 5) (5,644 ) Balance at December 31, 2020 $ - |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | (4) BALANCE SHEET COMPONENTS Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS 2021 2020 December 31, 2021 2020 Prepaid research and development $ 5,233 $ 42 Prepaid expenses 1,485 23 Other current assets 240 38 Total prepaid expenses and other current assets $ 6,958 $ 103 Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES 2021 2020 December 31, 2021 2020 Accrued research and development $ 217 $ 946 Accrued payroll and other employee benefits 790 192 Other 143 18 Total accrued and other current liabilities $ 1,150 $ 1,156 |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | (5) CONVERTIBLE PROMISSORY NOTES On December 30, 2019, the Company issued convertible promissory notes (the “2019 Notes”) totaling $ 2.5 6 80 1.893 0.6 0.1 On July 13, 2020, the Company issued convertible promissory notes (the “2020 Notes”) totaling $ 2.5 3 October 31, 2020 no |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | ( 6) COMMITMENTS AND CONTINGENCIES In August 2021, the Company entered into a lease agreement (the “Waltham Lease”) for approximately 5,000 three years 18,000 2 As of December 31, 2021, the consolidated balance sheet includes an operating lease right-of-use asset of $ 0.5 0.6 68,000 As of December 31, 2021, the future minimum annual lease payments under the operating lease was as follows (in thousands): SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS FOR OPERATING LEASES 2022 $ 198 2023 221 2024 206 Total operating lease payments 625 Less: Amount representing interest (51 ) Total operating lease liabilities $ 574 Weighted-average remaining lease term (in years) 3.0 Weighted-average incremental borrowing rate 6 % |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | (7) STOCKHOLDERS’ EQUITY Under the Company’s Amended and Restated Certificates of Incorporation dated August 3, 2020, the Company had a total of 94,052,154 shares of capital stock authorized for issuance, consisting of 50,000,000 shares of common stock, par value of $ 0.0001 per share, and 44,052,154 shares of convertible preferred stock, par value of $ 0.0001 per share. Shares of authorized convertible preferred stock were designated as 4,000,000 shares of Series Seed redeemable convertible preferred stock and 40,052,154 shares of Series A redeemable convertible preferred stock. Following the Reverse Stock Split, the Company filed a Second Amended and Restated Certificate of Incorporation, which provided for 150,000,000 authorized shares of common stock with a par value of $ 0.0001 per share and 10,000,000 authorized shares of undesignated preferred stock with a par value of $ 0.0001 per share, effective upon completion of the Company’s IPO. (a) Redeemable Convertible Preferred Stock In August 2018, the Company sold to RA Capital Health Care Fund, L.P. an aggregate of 4,000,000 1.00 4.0 3,468,536 6.6 1.893 3,020,998 The Stock Purchase Agreement contained provisions that potentially obligate the Company to sell, outside of its control, an additional 33,562,620 1.893 63.5 On February 1, 2021, upon the completion of the First Milestone Closing, the Company sold 4,224,274 8.0 29,338,346 55.5 Immediately prior to the closing of the Company’s IPO on July 2, 2021, all outstanding shares of the Company’s redeemable convertible preferred stock converted into 14,182,854 (b) Common Stock In August 2018, the Company issued 241,467 0.0012 9,984,463 14,182,854 The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders. As of December 31, 2021, the Company had reserved the following shares of common stock for future issuance SCHEDULE OF COMMON STOCK SHARES RESERVED FOR ON AND AS-CONVERTED BASIS, FOR FUTURE ISSUANCE December 31, 2021 Common stock options granted and outstanding 3,454,374 Reserved for future option grants 1,084,580 Reserved for future ESPP issuances 230,000 Total 4,768,954 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | (8) SHARE-BASED COMPENSATION (a) Stock Option Plan The Company’s 2021 Stock Option and Incentive Plan (the “2021 Plan”) was adopted by the Company’s board of directors and approved by the Company’s stockholders in June 2021 and became effective as of June 29, 2021. Upon the effectiveness of the 2021 Plan, the Company’s 2018 Equity Incentive Plan (the “2018 Plan”) was terminated and no further grants may be made thereunder. The Company’s 2021 Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units and other forms of awards including cash awards to its officers, directors, employees, consultants and advisors. As of December 31, 2021, a total of 2,600,000 shares of the Company’s common stock were authorized for issuance with respect to awards granted under the 2021 Plan. The share limit will automatically increase on the first trading day in January of each year (commencing with 2022) by an amount equal to the lesser of (1) 4% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, or (2) such lesser number as determined by the Company’s board of directors. Any shares subject to awards granted under the 2021 Plan or the 2018 Plan that are not paid, delivered or exercised before they expire or are canceled or terminated, or otherwise fail to vest, as well as shares used to pay the purchase or exercise price of such awards or related tax withholding obligations, will become available for new award grants under the 2021 Plan. As of December 31, 2021, awards with respect to 1,515,420 shares of common stock had been granted under the 2021 Plan, and 1,084,580 shares authorized under the 2021 Plan were available for award purposes. The options that are granted under the 2021 Plan and the 2018 Plan are exercisable at various dates as determined upon grant and terminate within 10 years three to four years The following table summarizes the option activity under the 2021 Plan and 2018 Plan for the year ended December 31, 2021: SUMMARY OF OPTION ACTIVITY UNDER 2021 PLAN AND 2018 PLAN Options Weighted-Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Vested and expected to vest at December 31, 2020 229,105 $ 1.74 9.69 $ - Granted 3,225,269 $ 7.21 9.47 Exercised - - Cancelled/Forfeited - - Outstanding at December 31, 2021 3,454,374 $ 6.85 9.42 $ 19,378 Vested and exercisable at December 31, 2021 268,907 $ 4.81 9.10 $ 2,041 Vested and expected to vest at December 31, 2021 3,454,374 $ 6.85 9.42 $ 19,378 All exercisable options are vested and all outstanding options are vested or expected to vest. (b) Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan (the “ESPP”) was adopted by the Company’s board of directors and stockholders in June 2021 and became effective upon the consummation of the IPO. A total of 230,000 1% 15% 85% no (c) Stock-Based Compensation Expense The Company estimated the fair value of stock options using the Black-Scholes valuation model. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation expense for an award is reversed in the period that the award is forfeited. The fair value of stock options was estimated using the following assumptions: SUMMARY OF FAIR VALUE OF STOCK OPTIONS ASSUMPTIONS Years Ended December 31, 2021 2020 Expected term (in years) 5.2 6.1 5.5 6.1 Expected volatility 68.7% 69.8 % 68.0 79.4 % Risk-free interest rate 0.9% 1.4 % 0.4 1.5 % Expected dividend - - Stock-based compensation expense recognized for stock option grants has been reported in the statements of operations and comprehensive loss as follows (in thousands): SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION GRANTS Years Ended December 31, 2021 2020 Research and development $ 370 $ 30 General and administrative 1,673 28 Total $ 2,043 $ 58 As of December 31, 2021, there was approximately $ 12.6 3.4 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | (9) RELATED PARTY TRANSACTIONS Services Agreement In August 2018, the Company entered into a services agreement (“Services Agreement”) with Carnot, LLC (“Carnot”), an entity owned and controlled by RA Capital Management, L.P. under which Carnot provides research and other services to the Company. RA Capital Management, L.P. is a related party due to its equity ownership of the Company. The Company pays Carnot for services performed and costs incurred. The Services Agreement is for a term of two years In July 2019, the Services Agreement with Carnot was amended whereby research and other services are now performed by Carnot Pharma, LLC (“Carnot Pharma”), an entity owned and controlled by RA Capital Management, L.P., and the term was updated to the later of (i) two years Expenses incurred by the Company under the Services Agreement with Carnot Pharma totaled $ 0.1 million for the years ended December 31, 2021 and December 31, 2020 and are presented in the statement of operations and comprehensive loss as research and development and general and administrative expenses. As of December 31, 2021 and December 31, 2020, $ 2,000 and $ 6,000 respectively, was due to Carnot Pharma, LLC by the Company for services rendered under the agreement. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (10) INCOME TAXES Significant components of the Company’s net deferred tax assets are as follows (in thousands): SUMMARY OF COMPONENTS OF NET DEFERRED TAX ASSETS December 31, 2021 2020 Deferred income tax assets: NOL carryforwards $ 7,498 $ 2,795 Research credit carryforwards 530 41 Other 615 49 Gross deferred tax assets 8,643 2,885 Less: valuation allowance (8,517 ) (2,885 ) Total deferred tax assets 126 - Deferred income tax liabilities: Other (126 ) - Total deferred tax liabilities (126 ) - Net deferred tax assets (liabilities) $ - $ - A reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate is as follows (in thousands): SUMMARY OF RECONCILIATION OF FEDERAL INCOME TAX RATE Years ended December 31, 2021 2020 U.S. Federal statutory income tax rate $ (4,821 ) $ (2,018 ) State taxes (520 ) (89 ) Permanent and other differences 3 52 Convertible promissory notes - 151 Stock-based compensation 115 10 Research and development credits (392 ) - Change in valuation allowance 5,618 1,894 Total tax provision $ 3 $ - The Company had federal NOL carryforwards available of $ 32.6 12.0 The NOL generated from 2018 onwards of $ 32.6 13.4 7.3 The state NOLs may be used to offset future taxable income and will begin to expire in 2034 0.6 0.1 The Company has established a full valuation allowance for its deferred tax assets due to uncertainties that preclude it from determining that it is more likely than not that the Company will be able to generate sufficient taxable income to realize such assets. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred since inception. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. Based on this evaluation, as of December 31, 2021 and December 31, 2020, a valuation allowance of $ 8.5 2.9 The future utilization of the Company’s NOL and tax credit carryforwards to offset future taxable income may be subject to a substantial annual limitation as a result of changes in ownership by stockholders that hold 5% or more of the Company’s common stock. An assessment of such ownership changes under Section 382 and 383 was not completed through December 31, 2021. Utilization of our net operating loss and income tax credit carryforwards may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future. These ownership changes may limit the amount of the net operating loss and income tax credit carryover that can be utilized annually to offset future taxable income. The Company will examine the impact of any potential ownership changes in the future. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits at the beginning and end of the years ended December 31, 2021 and December 31, 2020 (in thousands): SUMMARY OF GROSS UNRECOGNIZED TAX BENEFITS Years ended December 31, 2021 2020 Beginning balance of unrecognized tax benefits $ 276 $ - Additions based on tax positions related to the current year 253 276 Ending balance of unrecognized tax benefits $ 529 $ 276 The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal corresponding adjustment in the deferred tax asset valuation allowance. The Company does not foresee material changes to its liability for uncertain tax benefits within the next twelve months. The Company is subject to taxation in the United States and various states. The Company’s Federal and state returns are subject to examination, as 2018 was the first year of operations for the Company. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company’s wholly owned subsidiary, Aerovate Securities Corporation. All intercompany transactions and balances have been eliminated in consolidation. |
Reverse Stock Split | (b) Reverse Stock Split On June 22, 2021, the Company effected a 1-for-3.1060103 reverse stock split (the “Reverse Stock Split”) of its issued and outstanding common stock. Accordingly, the conversion ratio for the Company’s outstanding convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. The par value of the common stock was not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, early exercised options, share data, per share data, convertible preferred stock (to the extent presented on an as-converted to common stock basis) and related information contained in these consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented . |
Use of Estimates | (c) Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, and financial condition will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets. Actual results could differ materially from those estimates. Accounting estimates and management judgements reflected in the consolidated financial statements include: normal recurring accruals, including the accrual for research and development expenses, stock-based compensation and fair value of investments. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents Cash and cash equivalents include cash in readily available checking accounts, money market funds and commercial paper. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. |
Short-term Investments | (e) Short-term Investments Short-term investments consist of corporate debt securities, commercial paper and U.S. Treasury bills, classified as available-for-sale securities and have maturities of greater than three months. The Company has classified all of its available-for-sale investment securities as current assets on the consolidated balance sheets because these are considered highly liquid securities and are available for use in current operations. The Company carries these securities at fair value and reports unrealized gains and losses as a separate component of accumulated other comprehensive loss. The cost of debt securities is adjusted for amortization of purchase premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income in the consolidated statements of operations and comprehensive loss. Realized gains and losses on sales of securities are determined using the specific identification method and recorded in other income (expense), net in the consolidated statement of operations and comprehensive loss . |
Concentration of Credit Risk | (f) Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash, cash equivalents and short-term investments. The Company maintains cash, cash equivalents and short-term investments with various high credit quality banks and other financial institutions in the United States. Such deposits may be in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company has not experienced any losses on deposits since inception. |
Comprehensive Loss | (g) Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company displays comprehensive loss and its components as part of the consolidated statements of operations and comprehensive loss. |
Fair Value Measurements | (h) Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts of prepaid expenses and other current assets, accounts payable, accrued liabilities and other current liabilities are reasonable estimates of their fair value due to the short-term nature of these accounts. Convertible promissory notes were classified within the Level 3 designation and were recorded at fair value on a recurring basis prior to their conversion during the year ended December 31, 2020. |
Prepaid Expenses and Other Current Assets | (i) Prepaid Expenses and Other Current Assets Any expenses paid prior to the related services rendered are recorded as prepaid expenses. Such prepaid expenses are expensed in the period the expense is incurred. If the expense is for a service covering multiple periods, it is expensed from the date the services begin and over the period of the service rendered (or contract service period if services rendered dates are not defined). |
Property and Equipment, Net | (j) Property and Equipment, Net Property and equipment, which consist of leasehold improvements, furniture and fixtures, research equipment, computers and construction-in-progress are stated at cost less accumulated depreciation or accumulated amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets, which ranges from three to five years. Leasehold improvements are amortized over the remaining life of the lease for leasehold improvements at the time the asset is placed into service. |
Impairment of Long-lived Assets | (k) Impairment of Long-lived Assets The carrying value of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future undiscounted cash flows, expected to result from the use of the asset and its eventual disposition, are less than its carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Through December 31, 2021, there has been no such impairment losses recorded by the Company. |
Leases | (l) Leases At the commencement date of a lease, the Company recognizes lease liabilities which represent its obligation to make lease payments, and right-of-use assets (“ROU assets”) which represent its right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date. The ROU asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred by the Company and excludes lease incentives. ROU assets are recorded in operating lease ROU assets and lease liabilities are recorded in operating lease liabilities, current and noncurrent in the consolidated balance sheets. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to separate lease and non-lease components and not recognize lease liabilities and ROU assets for short-term leases with terms of twelve months or less. |
Fair Value Option | (m) Fair Value Option As permitted under Accounting Standards Codification (“ASC”) 825, Financial Instruments |
Convertible Preferred Stock | (n) Convertible Preferred Stock The Company records convertible preferred stock at fair value on the dates of issuance, net of issuance costs. Upon the occurrence of certain events that are outside the Company’s control, including a deemed liquidation event, holders of the convertible preferred stock can cause redemption for cash. Therefore, convertible preferred stock is classified outside of stockholders’ deficit on the balance sheets as events triggering the liquidation preferences are not solely within the Company’s control. The carrying values of the convertible preferred stock are adjusted to their liquidation preferences if and when it becomes probable that such a liquidation event will occur. |
Research and Development Expenses | (o) Research and Development Expenses Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and other benefits of research and development personnel, including associated share-based compensation, costs related to research activities, preclinical studies, clinical trial, drug manufacturing and allocated overhead and facility-related expenses. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred. |
Stock-Based Compensation | (p) Stock-Based Compensation Stock-based compensation expense represents the cost of the grant-date fair value of employee, officer, director, and non-employee stock option grants, estimated in accordance with the applicable accounting guidance, recognized using the straight-line method over the vesting period for service-based options and using the graded vesting method for performance-based options. The vesting period generally approximates the expected service period of the awards. Forfeitures are recognized and accounted for as they occur. The fair value of stock options is estimated using a Black-Scholes option pricing model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, expected dividend yield, and a risk-free interest rate. Options granted during the year have a maximum contractual term of ten years. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The expected volatility of stock options is based upon the historical volatility of a number of publicly traded companies in similar stages of clinical development. The Company has historically not declared or paid any dividends and does not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the U.S. Department of Treasury (“U.S. Treasury”) yield in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock options. |
Income Taxes | (q) Income Taxes Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss (“NOL”) and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded if, based upon the weight of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. |
Segment Reporting | (r) Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment. |
Net Loss Per Share | (s) Net Loss Per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period. Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is antidilutive. The Company’s potentially dilutive securities, which include convertible preferred stock prior to the conversion of such shares to common stock and outstanding stock options under the Company’s equity incentive plan, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. The following table summarizes the Company’s net loss per share: SCHEDULE OF NET LOSS PER SHARE Years Ended December 31, 2021 2020 Numerator: Net loss $ (22,963 ) $ (9,611 ) Accretion of Series A redeemable convertible preferred stock to redemption value (22 ) (153 ) Net loss available to common stockholders $ (22,985 ) $ (9,764 ) Denominator: Weighted-average common stock outstanding, basic and diluted 12,293,629 242,232 Net loss per share, basic and diluted $ (1.87 ) $ (40.31 ) Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would have had an anti-dilutive effect are as follows (in common stock equivalent shares): SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE December 31, 2021 2020 Options to purchase common stock 3,454,374 229,105 Series Seed redeemable convertible preferred stock - 1,287,825 Series A redeemable convertible preferred stock - 2,089,341 3,454,374 3,606,271 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF NET LOSS PER SHARE | The following table summarizes the Company’s net loss per share: SCHEDULE OF NET LOSS PER SHARE Years Ended December 31, 2021 2020 Numerator: Net loss $ (22,963 ) $ (9,611 ) Accretion of Series A redeemable convertible preferred stock to redemption value (22 ) (153 ) Net loss available to common stockholders $ (22,985 ) $ (9,764 ) Denominator: Weighted-average common stock outstanding, basic and diluted 12,293,629 242,232 Net loss per share, basic and diluted $ (1.87 ) $ (40.31 ) |
SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE | Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would have had an anti-dilutive effect are as follows (in common stock equivalent shares): SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE December 31, 2021 2020 Options to purchase common stock 3,454,374 229,105 Series Seed redeemable convertible preferred stock - 1,287,825 Series A redeemable convertible preferred stock - 2,089,341 3,454,374 3,606,271 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FAIR VALUE INSTRUMENTS | The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands): SCHEDULE OF FAIR VALUE INSTRUMENTS December 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (level 3) Fair Value Measurements Using December 31, Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 3) Assets: Cash equivalents Money market funds $ 39,653 $ 39,653 $ - $ - Commercial paper 14,448 - 14,448 - Total cash equivalents 54,101 39,653 14,448 - Short-term investments U.S. Treasury bills 25,135 25,135 - - Corporate debt securities 10,715 - 10,715 Commercial paper 77,328 - 77,328 - Total short-term investments 113,178 25,135 88,043 - Total $ 167,279 $ 64,788 $ 102,491 $ - |
SUMMARY OF SHORT TERM INVESTMENT | The following tables summarize the Company’s short-term investments as of December 31, 2021 (in thousands): SUMMARY OF SHORT TERM INVESTMENT As of December 31, 2021 Maturity Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities 1 year or less $ 10,726 $ - $ (11 ) $ 10,715 Commercial paper 1 year or less 77,328 9 (9 ) 77,328 U.S. Treasury bills 2 years or less 25,183 - (48 ) 25,135 $ 113,237 $ 9 $ (68 ) $ 113,178 |
SUMMARY OF RECONCILIATION OF ALL LIABILITIES MEASURED AT FAIR VALUE USING LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS | The Company had no liabilities measured using significant unobservable inputs (Level 3) for the year ended December 31, 2021. The following table presents the changes in estimated fair value of the Company’s Level 3 liabilities for the year ended December 31, 2020 (in thousands): SUMMARY OF RECONCILIATION OF ALL LIABILITIES MEASURED AT FAIR VALUE USING LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS Convertible Promissory Notes Balance at December 31, 2019 $ 2,500 Issuance of convertible promissory notes, related party 2,500 Change in fair value of convertible promissory notes, related party 644 Exchange of convertible promissory notes (Note 5) (5,644 ) Balance at December 31, 2020 $ - |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of the following (in thousands): SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS 2021 2020 December 31, 2021 2020 Prepaid research and development $ 5,233 $ 42 Prepaid expenses 1,485 23 Other current assets 240 38 Total prepaid expenses and other current assets $ 6,958 $ 103 |
SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES | Accrued and other current liabilities consisted of the following (in thousands): SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES 2021 2020 December 31, 2021 2020 Accrued research and development $ 217 $ 946 Accrued payroll and other employee benefits 790 192 Other 143 18 Total accrued and other current liabilities $ 1,150 $ 1,156 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS FOR OPERATING LEASES | As of December 31, 2021, the future minimum annual lease payments under the operating lease was as follows (in thousands): SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS FOR OPERATING LEASES 2022 $ 198 2023 221 2024 206 Total operating lease payments 625 Less: Amount representing interest (51 ) Total operating lease liabilities $ 574 Weighted-average remaining lease term (in years) 3.0 Weighted-average incremental borrowing rate 6 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
SCHEDULE OF COMMON STOCK SHARES RESERVED FOR ON AND AS-CONVERTED BASIS, FOR FUTURE ISSUANCE | As of December 31, 2021, the Company had reserved the following shares of common stock for future issuance SCHEDULE OF COMMON STOCK SHARES RESERVED FOR ON AND AS-CONVERTED BASIS, FOR FUTURE ISSUANCE December 31, 2021 Common stock options granted and outstanding 3,454,374 Reserved for future option grants 1,084,580 Reserved for future ESPP issuances 230,000 Total 4,768,954 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SUMMARY OF OPTION ACTIVITY UNDER 2021 PLAN AND 2018 PLAN | The following table summarizes the option activity under the 2021 Plan and 2018 Plan for the year ended December 31, 2021: SUMMARY OF OPTION ACTIVITY UNDER 2021 PLAN AND 2018 PLAN Options Weighted-Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Vested and expected to vest at December 31, 2020 229,105 $ 1.74 9.69 $ - Granted 3,225,269 $ 7.21 9.47 Exercised - - Cancelled/Forfeited - - Outstanding at December 31, 2021 3,454,374 $ 6.85 9.42 $ 19,378 Vested and exercisable at December 31, 2021 268,907 $ 4.81 9.10 $ 2,041 Vested and expected to vest at December 31, 2021 3,454,374 $ 6.85 9.42 $ 19,378 |
SUMMARY OF FAIR VALUE OF STOCK OPTIONS ASSUMPTIONS | SUMMARY OF FAIR VALUE OF STOCK OPTIONS ASSUMPTIONS Years Ended December 31, 2021 2020 Expected term (in years) 5.2 6.1 5.5 6.1 Expected volatility 68.7% 69.8 % 68.0 79.4 % Risk-free interest rate 0.9% 1.4 % 0.4 1.5 % Expected dividend - - |
SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION GRANTS | Stock-based compensation expense recognized for stock option grants has been reported in the statements of operations and comprehensive loss as follows (in thousands): SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION GRANTS Years Ended December 31, 2021 2020 Research and development $ 370 $ 30 General and administrative 1,673 28 Total $ 2,043 $ 58 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
SUMMARY OF COMPONENTS OF NET DEFERRED TAX ASSETS | Significant components of the Company’s net deferred tax assets are as follows (in thousands): SUMMARY OF COMPONENTS OF NET DEFERRED TAX ASSETS December 31, 2021 2020 Deferred income tax assets: NOL carryforwards $ 7,498 $ 2,795 Research credit carryforwards 530 41 Other 615 49 Gross deferred tax assets 8,643 2,885 Less: valuation allowance (8,517 ) (2,885 ) Total deferred tax assets 126 - Deferred income tax liabilities: Other (126 ) - Total deferred tax liabilities (126 ) - Net deferred tax assets (liabilities) $ - $ - |
SUMMARY OF RECONCILIATION OF FEDERAL INCOME TAX RATE | A reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate is as follows (in thousands): SUMMARY OF RECONCILIATION OF FEDERAL INCOME TAX RATE Years ended December 31, 2021 2020 U.S. Federal statutory income tax rate $ (4,821 ) $ (2,018 ) State taxes (520 ) (89 ) Permanent and other differences 3 52 Convertible promissory notes - 151 Stock-based compensation 115 10 Research and development credits (392 ) - Change in valuation allowance 5,618 1,894 Total tax provision $ 3 $ - |
SUMMARY OF GROSS UNRECOGNIZED TAX BENEFITS | The following table summarizes the activity related to the Company’s gross unrecognized tax benefits at the beginning and end of the years ended December 31, 2021 and December 31, 2020 (in thousands): SUMMARY OF GROSS UNRECOGNIZED TAX BENEFITS Years ended December 31, 2021 2020 Beginning balance of unrecognized tax benefits $ 276 $ - Additions based on tax positions related to the current year 253 276 Ending balance of unrecognized tax benefits $ 529 $ 276 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | Jul. 02, 2021 | Dec. 31, 2021 |
Subsidiary, Sale of Stock [Line Items] | ||
Cash and cash equivalents and short term investment | $ 167.4 | |
IPO [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued | 9,984,463 | |
Number of shares conversion securities | 14,182,854 | |
Proceeds from issuance of public offering | $ 126.9 | |
Over-Allotment Option [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued | 1,302,321 | |
Sale of price per share | $ 14 |
SCHEDULE OF NET LOSS PER SHARE
SCHEDULE OF NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net loss | $ (22,963) | $ (9,611) |
Accretion of Series A redeemable convertible preferred stock to redemption value | 22 | 153 |
Net loss available to common stockholders | $ (22,985) | $ (9,764) |
Weighted-average common stock outstanding, basic and diluted | 12,293,629 | 242,232 |
Net loss per share, basic and diluted | $ (1.87) | $ (40.31) |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Accretion of Series A redeemable convertible preferred stock to redemption value | $ (22) | $ (153) |
SCHEDULE OF POTENTIALLY DILUTIV
SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,454,374 | 3,606,271 |
Share-based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,454,374 | 229,105 |
Series Seed Redeemable Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,287,825 | |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,089,341 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Jun. 22, 2021 |
Accounting Policies [Abstract] | |
Stockholders' Equity, Reverse Stock Split | 1-for-3.1060103 reverse stock split (the “Reverse Stock Split”) of its issued and outstanding common stock. Accordingly, the conversion ratio for the Company’s outstanding convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. The par value of the common stock was not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, early exercised options, share data, per share data, convertible preferred stock (to the extent presented on an as-converted to common stock basis) and related information contained in these |
SCHEDULE OF FAIR VALUE INSTRUME
SCHEDULE OF FAIR VALUE INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 39,653 | |
Commercial paper | 14,448 | |
Total cash equivalents | 54,101 | |
U.S. Treasury bills | 25,135 | |
Corporate debt securities | 10,715 | |
Commercial paper | 77,328 | |
Total short-term investments | 113,178 | |
Total | 167,279 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 39,653 | |
Commercial paper | ||
Total cash equivalents | 39,653 | |
U.S. Treasury bills | 25,135 | |
Corporate debt securities | ||
Commercial paper | ||
Total short-term investments | 25,135 | |
Total | 64,788 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | ||
Commercial paper | 14,448 | |
Total cash equivalents | 14,448 | |
U.S. Treasury bills | ||
Corporate debt securities | 10,715 | |
Commercial paper | 77,328 | |
Total short-term investments | 88,043 | |
Total | 102,491 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | ||
Commercial paper | ||
Total cash equivalents | ||
U.S. Treasury bills | ||
Commercial paper | ||
Total short-term investments | ||
Total |
SUMMARY OF SHORT TERM INVESTMEN
SUMMARY OF SHORT TERM INVESTMENT (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Amortized cost | $ 113,237 |
Gross unrealized gains | 9 |
Gross unrealized losses | (68) |
Estimated fair value | $ 113,178 |
Corporate Debt Securities [Member] | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Maturity | 1 year or less |
Amortized cost | $ 10,726 |
Gross unrealized gains | |
Gross unrealized losses | (11) |
Estimated fair value | $ 10,715 |
Commercial Paper [Member] | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Maturity | 1 year or less |
Amortized cost | $ 77,328 |
Gross unrealized gains | 9 |
Gross unrealized losses | (9) |
Estimated fair value | $ 77,328 |
US Treasury Securities [Member] | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Maturity | 2 years or less |
Amortized cost | $ 25,183 |
Gross unrealized gains | |
Gross unrealized losses | (48) |
Estimated fair value | $ 25,135 |
SUMMARY OF RECONCILIATION OF AL
SUMMARY OF RECONCILIATION OF ALL LIABILITIES MEASURED AT FAIR VALUE USING LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS (Details) - Convertible Promissory Notes [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Short-term Debt [Line Items] | |
Balance at December 31, 2019 | $ 2,500 |
Issuance of convertible promissory notes, related party | 2,500 |
Change in fair value of convertible promissory notes, related party | 644 |
Exchange of convertible promissory notes (Note 5) | (5,644) |
Balance at December 31, 2020 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Cash | $ 4,600 | |
Short term investment | $ 113,178 | |
Short-term Investments [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Accrued interest receivable | $ 100 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid research and development | $ 5,233 | $ 42 |
Prepaid expenses | 1,485 | 23 |
Other current assets | 240 | 38 |
Total prepaid expenses and other current assets | $ 6,958 | $ 103 |
SCHEDULE OF ACCRUED AND OTHER C
SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued research and development | $ 217 | $ 946 |
Accrued payroll and other employee benefits | 790 | 192 |
Other | 143 | 18 |
Total accrued and other current liabilities | $ 1,150 | $ 1,156 |
CONVERTIBLE PROMISSORY NOTES (D
CONVERTIBLE PROMISSORY NOTES (Details Narrative) | Aug. 05, 2020$ / shares | Jul. 13, 2020USD ($) | Aug. 05, 2020USD ($)$ / shares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 30, 2019USD ($) |
Short-term Debt [Line Items] | ||||||
Convertible promissory note | $ 644,000 | |||||
Series A Redeemable Convertible Preferred Stock [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Share price | $ / shares | $ 1.893 | $ 1.893 | ||||
Convertible Promissory Notes 2019 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt face amount | $ 2,500,000 | |||||
Debt instrument interest rate | 6.00% | |||||
Convertible promissory note | $ 600,000 | |||||
Interest on convertible debt | $ 100,000 | |||||
Convertible Promissory Notes 2019 [Member] | Series A Redeemable Convertible Preferred Stock [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Conversion price per share | 0.80 | |||||
Convertible Promissory Notes 2020 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt face amount | $ 2,500,000 | |||||
Debt instrument interest rate | 3.00% | |||||
Convertible promissory note | $ 0 | |||||
Debt maturity date | Oct. 31, 2020 |
SCHEDULE OF FUTURE MINIMUM ANNU
SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS FOR OPERATING LEASES (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 198 |
2023 | 221 |
2024 | 206 |
Total operating lease payments | 625 |
Less: Amount representing interest | (51) |
Total operating lease liabilities | $ 574 |
Weighted-average remaining lease term (in years) | 3 years |
Weighted-average incremental borrowing rate | 6.00% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2021USD ($)ft² | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating lease right of use asset | $ 542,000 | ||
Operating lease liability | 574,000 | ||
Total operating lease expenses | $ 68,000 | ||
Waltham Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Area of land | ft² | 5,000 | ||
Operating lease term | 3 years | ||
Payment for rent | $ 18,000 | ||
Lease rent percentage | 2.00% |
SCHEDULE OF COMMON STOCK SHARES
SCHEDULE OF COMMON STOCK SHARES RESERVED FOR ON AND AS-CONVERTED BASIS, FOR FUTURE ISSUANCE (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Equity [Abstract] | ||
Common stock options granted and outstanding | 3,454,374 | 229,105 |
Reserved for future option grants | 1,084,580 | |
Reserved for future ESPP issuances | 230,000 | |
Total | 4,768,954 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | Jul. 02, 2021 | Jun. 04, 2021 | Feb. 01, 2021 | Aug. 05, 2020 | Aug. 31, 2018 | Dec. 31, 2021 | Jun. 22, 2021 | Dec. 31, 2020 | Aug. 03, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Capital stock shares authorized | 94,052,154 | ||||||||
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 | 50,000,000 | 50,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Temporary Equity, Shares Authorized | 10,000,000 | 44,052,154 | |||||||
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||
Common stock issued | 24,410,393 | 243,076 | |||||||
IPO [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Number of shares issued | 9,984,463 | ||||||||
RA Capital Healthcare Fund, L.P [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Share price | $ 0.0012 | ||||||||
Conversion of stock shares issued | 14,182,854 | ||||||||
Common stock issued | 241,467 | ||||||||
Series Seed Redeemable Convertible Preferred Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Temporary Equity, Shares Authorized | 0 | 4,000,000 | 4,000,000 | ||||||
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||
Temporary equity, shares issued | 0 | 4,000,000 | |||||||
Series Seed Redeemable Convertible Preferred Stock [Member] | RA Capital Healthcare Fund, L.P [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Temporary Equity, Shares Authorized | 4,000,000 | ||||||||
Temporary Equity, Par or Stated Value Per Share | $ 1 | ||||||||
Temporary equity shares issued .value | $ 4 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Temporary Equity, Shares Authorized | 0 | 40,052,154 | 40,052,154 | ||||||
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||
Temporary equity shares issued .value | $ 6.6 | ||||||||
Temporary equity, shares issued | 3,468,536 | 0 | 6,489,534 | ||||||
Shares issued, price per share | $ 1.893 | ||||||||
Temporary equity shares issued | 3,020,998 | ||||||||
Share price | $ 1.893 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Stock Purchase Agreement [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Temporary equity shares issued .value | $ 63.5 | ||||||||
Temporary equity, shares issued | 33,562,620 | ||||||||
Share price | $ 1.893 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Stock Purchase Agreement [Member] | First Milestone [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Temporary equity shares issued .value | $ 8 | ||||||||
Temporary equity, shares issued | 4,224,274 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Stock Purchase Agreement [Member] | Second and Third Milestone [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Temporary equity shares issued .value | $ 55.5 | ||||||||
Temporary equity, shares issued | 29,338,346 |
SUMMARY OF OPTION ACTIVITY UNDE
SUMMARY OF OPTION ACTIVITY UNDER 2021 PLAN AND 2018 PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Options Outstanding, beginning balance | 229,105 | |
Weighted-Average Exercise Price Outstanding, beginning balance | $ 1.74 | |
Weighted- Average Remaining Contractual Term, Outstanding | 9 years 5 months 1 day | 9 years 8 months 8 days |
Aggregate Intrinsic Value Outstanding, beginning balance | ||
Options Granted | 3,225,269 | |
Weighted-Average Exercise Price, Granted | $ 7.21 | |
Weighted- Average Remaining Contractual Term, Granted | 9 years 5 months 19 days | |
Options Exercised | ||
Weighted-Average Exercise Price, Exercised | ||
Options, Cancelled/Forfeited | ||
Weighted-Average Exercise Price, Cancelled/Forfeited | ||
Options Outstanding, ending balance | 3,454,374 | 229,105 |
Weighted-Average Exercise Price Outstanding, ending balance | $ 6.85 | $ 1.74 |
Aggregate Intrinsic Value Outstanding, ending balance | $ 19,378 | |
Options, Vested and exercisable | 268,907 | |
Weighted-Average Exercise Price, Vested and exercisable | $ 4.81 | |
Weighted- Average Remaining Contractual Term, Vested and exercisable | 9 years 1 month 6 days | |
Aggregate Intrinsic Value, Vested and exercisable | $ 2,041 | |
Options, Vested and expected to vest | 3,454,374 | |
Weighted-Average Exercise Price, Vested and expected to vest | $ 6.85 | |
Weighted- Average Remaining Contractual Term, Vested and expected to vest | 9 years 5 months 1 day | |
Aggregate Intrinsic Value, Vested and expected to vest | $ 19,378 |
SUMMARY OF FAIR VALUE OF STOCK
SUMMARY OF FAIR VALUE OF STOCK OPTIONS ASSUMPTIONS (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 68.70% | 68.00% |
Expected volatility, maximum | 69.80% | 79.40% |
Risk-free interest rate, minimum | 0.90% | 0.40% |
Risk-free interest rate, maximum | 1.40% | 1.50% |
Expected dividend | (0.00%) | (0.00%) |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 2 months 12 days | 5 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
SUMMARY OF STOCK-BASED COMPENSA
SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION GRANTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | $ 2,043 | $ 58 |
Research and Development Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | 370 | 30 |
General and Administrative Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | $ 1,673 | $ 28 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,084,580 | |
Percentage of common stock purchase price | 1.00% | |
Unrecognized stock based compensation | $ 12.6 | |
Unrecognized stock-based compensation weighted-average period | 3 years 4 months 24 days | |
2021 Stock Option and Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance | 2,600,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 4.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,515,420 | |
2021 Stock Option and Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance | 1,084,580 | |
2021 Plan and 2018 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 10 years | |
Vesting period description | three to four years | |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance | 230,000 | |
Percentage of common stock purchase price | 15.00% | |
Discount percentage on marker price | 85.00% | |
Shares issued | 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - Service agreement with carnot LLC - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2019 | Aug. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||
Term of service agreement | 2 years | 2 years | ||
Accounts Payable, Related Parties | $ 6,000 | $ 2,000 | ||
Research and development and general and administrative expenses | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 100,000 |
SUMMARY OF COMPONENTS OF NET DE
SUMMARY OF COMPONENTS OF NET DEFERRED TAX ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
NOL carryforwards | $ 7,498 | $ 2,795 |
Research credit carryforwards | 530 | 41 |
Other | 615 | 49 |
Gross deferred tax assets | 8,643 | 2,885 |
Less: valuation allowance | (8,517) | (2,885) |
Total deferred tax assets | 126 | |
Other | (126) | |
Total deferred tax liabilities | (126) | |
Net deferred tax assets (liabilities) |
SUMMARY OF RECONCILIATION OF FE
SUMMARY OF RECONCILIATION OF FEDERAL INCOME TAX RATE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal statutory income tax rate | $ (4,821) | $ (2,018) |
State taxes | (520) | (89) |
Permanent and other differences | 3 | 52 |
Convertible promissory notes | 151 | |
Stock-based compensation | 115 | 10 |
Research and development credits | (392) | |
Change in valuation allowance | 5,618 | 1,894 |
Total tax provision | $ 3 |
SUMMARY OF GROSS UNRECOGNIZED T
SUMMARY OF GROSS UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance of unrecognized tax benefits | $ 276 | |
Additions based on tax positions related to the current year | 253 | 276 |
Ending balance of unrecognized tax benefits | $ 529 | $ 276 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets valuation allowance | $ 8,517 | $ 2,885 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 32,600 | 12,000 |
Operating loss carryforwards, limitation on use | The NOL generated from 2018 onwards of $32.6 million will carryforward indefinitely and be available to offset up to 80% of future taxable income each year | |
Domestic Tax Authority [Member] | Indefinitely Period [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 32,600 | |
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 600 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 13,400 | $ 7,300 |
Operating loss carryforwards, limitation on use | The state NOLs may be used to offset future taxable income and will begin to expire in 2034 | |
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 100 |