10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39676

INHIBIKASE THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	26-3407249
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3350 Riverwood Parkway SE, Suite 1900 Atlanta, GA	30339
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (678) 392-3419

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

IKT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 10, 2021, the registrant had 25,155,198 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited)	1
	Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020	1
	Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	2
	Condensed Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (Unaudited)	4
	Notes to Unaudited Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II.	OTHER INFORMATION	21
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	21
Item 5.	Other Information	21
Item 6.	Exhibits	22
Signatures		23

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (Unaudited).

Inhibikase Therapeutics, Inc.

Condensed Balance Sheets


	September 30, 2021			December 31, 2020
	(unaudited)			(Note 3)
Assets
Current assets:
Cash	$	44,845,950		$	13,953,513
Grants receivable		217,482			—
Prepaid research and development		264,381			774,356
Prepaid expenses and other current assets		541,388			54,837
Total assets	$	45,869,201		$	14,782,706
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	553,801		$	1,720,680
Accrued expenses and other current liabilities		1,905,010			632,934
Deferred revenue		—			2,325,741
Notes payable		248,911			42,534
Total		2,707,722			4,721,889
Notes payable, net of current portion		—			276,461
Total liabilities		2,707,722			4,998,350
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020; 0 shares issued and outstanding at September 30, 2021 and December 31, 2020		—			—
Common stock, $0.001 par value; 100,000,000 and 30,000,000 shares authorized; 25,155,198 and 10,050,849 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively.		25,155			10,051
Additional paid-in capital		67,912,392			24,805,929
Accumulated deficit		(24,776,068	)		(15,031,624	)
Total		43,161,479			9,784,356
Total liabilities and stockholders' equity	$	45,869,201		$	14,782,706

See accompanying notes to condensed financial statements.

Inhibikase Therapeutics, Inc.

Condensed Statements of Operations

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue:
Grant revenue	$	328,459		$	37,680		$	3,098,661		$	528,052
Total revenue		328,459			37,680			3,098,661			528,052
Costs and expenses:
Research and development		3,154,553			120,569			7,968,846			666,858
Selling, general and administrative		1,644,946			580,820			4,854,494			1,478,839
Total costs and expenses		4,799,499			701,389			12,823,340			2,145,697
Loss from operations		(4,471,040	)		(663,709	)		(9,724,679	)		(1,617,645	)
Interest expense		(157	)		(6,890	)		(19,765	)		(22,263	)
Net loss	$	(4,471,197	)	$	(670,599	)	$	(9,744,444	)	$	(1,639,908	)
Net loss per share – basic and diluted	$	(0.18	)	$	(0.08	)	$	(0.61	)	$	(0.20	)
Weighted-average number of common shares – basic and diluted		25,143,559			8,198,754			15,868,421			8,187,517

See accompanying notes to condensed financial statements.

Inhibikase Therapeutics, Inc.

Condensed Statements of Stockholders’ Equity (Deficit)

(Unaudited)


	Common Stock
	Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2020		10,050,849	$	10,051	$	24,805,929		$	(15,031,624	)	$	9,784,356
Stock-based compensation expense		—		—		591,124			—			591,124
Warrant expense		—		—		237,768			—			237,768
Issuance of common stock		9,000		9		60,382			—			60,391
Net loss		—		—		—			(2,637,068	)		(2,637,068	)
Balance at March 31, 2021		10,059,849	$	10,060	$	25,695,203		$	(17,668,692	)	$	8,036,571
Stock-based compensation expense		—		—		322,483			—			322,483
Warrant expense		—		—		239,415			—			239,415
Issuance of common stock, follow on offering		15,000,000		15,000		41,120,357			—			41,135,357
Issuance of common stock, stock options exercised		73,496		74		(43,369	)		—			(43,295	)
Net loss		—		—		—			(2,636,179	)		(2,636,179	)
Balance at June 30, 2021		25,133,345	$	25,134	$	67,334,089		$	(20,304,871	)	$	47,054,352
Stock-based compensation expense		—		—		352,419			—			352,419
Warrant expense		—		—		181,762			—			181,762
Issuance of common stock, stock options exercised		21,853		21		44,122			—			44,143
Net loss		—		—		—			(4,471,197	)		(4,471,197	)
Balance at September 30, 2021		25,155,198	$	25,155	$	67,912,392		$	(24,776,068	)	$	43,161,479


	Common Stock
	Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance at December 31, 2019		8,180,937	$	8,181	$	7,685,533		$	(12,183,730	)	$	(4,490,016	)
Stock-based compensation expense		—		—		139,758			—			139,758
Warrant expense		—		—		190,993			—			190,993
Issuance of common stock		874		1		4,870			—			4,871
Net loss				—		—			(547,440	)		(547,440	)
Balance at March 31, 2020		8,181,811	$	8,182	$	8,021,154		$	(12,731,170	)	$	(4,701,834	)
Stock-based compensation expense		—		—		139,759			—			139,759
Warrant expense		—		—		89,515			—			89,515
Conversion of notes		11,594		11		63,789			—			63,800
Net loss		—		—		—			(421,869	)		(421,869	)
Balance at June 30, 2020		8,193,405	$	8,193	$	8,314,217		$	(13,153,039	)	$	(4,830,629	)
Stock-based compensation expense		—		—		139,758			—			139,758
Warrant expense		—		—		236,415			—			236,415
Issuance of common stock, cashless warrant exercise		13,301		14		(15	)		—			(1	)
Net loss		—		—		—			(670,599	)		(670,599	)
Balance at September 30, 2020		8,206,706	$	8,207	$	8,690,375		$	(13,823,638	)	$	(5,125,056	)

See accompanying notes to condensed financial statements.

Inhibikase Therapeutics, Inc.

Condensed Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2021			2020
Operating activities
Net loss	$	(9,744,444	)	$	(1,639,908	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		1,266,026			419,275
Non-cash consulting fees		60,391			112,500
Non-cash PPP loan forgiveness		(27,550	)		—
Warrant expense		658,945			516,923
Changes in operating assets and liabilities:
Grants receivable		(217,482	)		—
Prepaid expenses and other assets		(486,551	)		3,218
Prepaid research and development		509,975			—
Accounts payable		(1,166,879	)		1,046,755
Accrued expenses and other current liabilities		1,272,076			(1,171,508	)
Deferred revenue		(2,325,741	)		529,918
Net cash used in operating activities		(10,201,234	)		(182,827	)

Financing activities
Proceeds from notes payable		—			272,800
Proceeds from issuance of common stock		41,135,357			4,870
Deferred initial public offering costs		—			(97,132	)
Issuance of common stock from exercise of stock options		78,500			—
Payment of employee taxes in connection with stock option exercise		(77,652	)		—
Repayments of note payable		(42,534	)		—
Net cash provided by financing activities		41,093,671			180,538
Net increase (decrease) in cash		30,892,437			(2,289	)
Cash at beginning of period		13,953,513			18,457
Cash at end of period	$	44,845,950		$	16,168
Supplemental disclosures of cash flow information
Cash paid for interest	$	19,608		$	4,520
Non-cash financing activities
Notes payable settled with new notes payable	$	—		$	42,534
Notes payable settled with common stock	$	—		$	63,800
PPP loan forgiveness	$	27,550		$	—
Accrued deferred initial public offering costs	$	—		$	1,334,331

See accompanying notes to condensed financial statements.

Inhibikase Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements

Nature of Business

Inhibikase Therapeutics, Inc. (the “Company,” “we” or “our”) is a clinical stage pharmaceutical company developing therapeutics for Parkinson’s Disease, or "PD", and related disorders that arise inside and outside of the brain. In 2021, we commenced clinical development of IkT-148009, a small molecule Abelson Tyrosine Kinase inhibitor we believe can modify the course of Parkinson’s disease and its manifestation in the gastrointestinal tract, or GI. Results to date of our ongoing Phase 1 Single and Multiple Ascending Dose escalation study ("SAD" and "MAD", respectively) in older and elderly healthy volunteers have revealed important insights into the safety, tolerability and pharmacokinetics of IkT-148009 in human subjects. Outcomes of this study led to an acceleration of the clinical development program. In July 2021, the U.S. Food and Drug Administration (“FDA”) agreed with the Company’s plan to initiate its Phase 1b study in Parkinson’s patients which commenced dosing October 19, 2021. Clinical development of IkT-148009 for the GI complications in PD patients will cross-reference the Phase 1 study of IkT-148009 for the treatment of PD. Clinical development of the Company’s lead oncology asset, IkT-001Pro, is anticipated to begin shortly after submission of Company’s Investigational New Drug application for IkT-001Pro; submission of the IND is anticipated to occur in the first quarter of 2022. The Company’s pursuit of the orphan indication Multiple System Atrophy is ongoing with regulators in the U.S. and Europe.

Liquidity and Going Concern

The Company has recognized recurring losses. At September 30, 2021, the Company had working capital of $43,161,479, an accumulated deficit of $24,776,068, cash of $44,845,950, accounts payable and accrued expenses of $2,458,811 and notes payable of $248,911. The Company had active grants in the amount of $1,932,618, of which $519,813 remained available in accounts held by the U.S. Treasury as of October 29, 2021.

The future success of the Company is dependent on its ability to successfully obtain additional working capital, obtain regulatory approval for and successfully launch and commercialize its product candidates and to ultimately attain profitable operations. Historically, the Company has funded its operations primarily through cash received in connection with revenue from its various grant programs. In addition, in June 2021 and December 2020, the Company raised approximately $41.1 million and $14.6 million in working capital from its underwritten public offering (the “June 2021 Offering”) and its initial public offering (“IPO”), respectively.

The Company is subject to a variety of risks similar to other early-stage life science companies including, but not limited to, the successful development, regulatory approval, and market acceptance of the Company’s product candidates, development by its competitors of new technological innovations, protection of proprietary technology, and raising additional working capital. The Company has incurred significant research and development expenses and general and administrative expenses related to its product candidate programs. The Company anticipates costs and expenses to increase in the future as the Company continues to develop its product candidates.

The Company may seek to fund its operations through additional public equity, private equity, or debt financings, as well as other sources. However, the Company may be unable to raise additional working capital, or if it is able to raise additional capital, it may be unable to do so on commercially favorable terms. The Company’s failure to raise capital or enter into such other arrangements if and when needed would have a negative impact on the Company’s business, results of operations and financial condition and the Company’s ability to continue to develop its product candidates.

The Company estimates that its working capital at September 30, 2021 is sufficient to fund its normal operations into the first quarter of 2023.

The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Basis of Presentation and Significant Accounting Policies

Basis of Presentation of Interim Financial Statements

The accompanying unaudited condensed financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. The December 31, 2020 balance sheet was derived from December 31, 2020 audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. The results for the interim periods are not necessarily indicative of results to be expected for the fiscal year ending December 31, 2021. The condensed unaudited financial statements contained herein should be read in conjunction with the Company’s annual audited financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report filed on SEC Form 10-K.

These condensed financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The condensed financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

On August 21, 2020, the Company filed a Certificate of Amendment of its Certificate of Incorporation with the Secretary of State of the State of Delaware that effected a one-for-1.14396 (1:1.14396) reverse stock split of its common stock, par value $.001 per share, effective August 24, 2020. All warrant, option, share, and per share information in the Company’s financial statements gives retroactive effect to the one-for-1.14396 reverse stock split that was effected on August 24, 2020.

The condensed financial statements have been prepared in conformity with US GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative US GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are generally adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. The JOBS Act permits an emerging growth company such as the Company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. The Company has elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that it either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.

Use of Estimates

The preparation of the Company’s financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its stock options and warrants, deferred tax valuation allowances and revenue recognition, to record expenses relating to research and development contracts and accrued expenses. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates.

Concentrations of Credit Risk

For the three months ended September 30, 2021 and 2020, the Company derived more than 90% of its total revenue from a single source, the United States Government, in the form of federal research grants.

Revenue Recognition

The Company generates revenue from research and development grants under contracts with third parties that do not create customer-vendor relationships. The Company’s research and development grants are non-exchange transactions and are not within

the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Contribution revenue earned from activities performed pursuant to research and development grants is reported as grant revenue in the Company’s condensed statements of operations. Revenue from these grants is recognized as the Company incurs qualifying expenses as stipulated by the terms of the respective grant. Cash received from grants in advance of incurring qualifying expenses is recorded as deferred revenue. The Company records revenue and a corresponding receivable when qualifying costs are incurred before the grants are received.

Supplemental Balance Sheet Information

Accrued expenses and other current liabilities consist of the following:


	September 30, 2021		December 31, 2020
Accrued consulting	$	256,342	$	115,405
Accrued legal and professional fees		—		383,286
Accrued research and development		1,483,479		83,491
Accrued interest		811		1,673
Accrued bonuses		152,860		—
Accrued other		11,518		49,079
Total accrued expenses and other current liabilities	$	1,905,010	$	632,934

Notes Payable

Notes payable outstanding were $248,911 and $318,995 at September 30, 2021 and December 31, 2020, respectively.


	September 30, 2021		December 31, 2020
Fifth Restated Note	$	—	$	42,534
PPP Note		—		27,550
CEO Restated Note		248,911		248,911
Total notes payable	$	248,911	$	318,995

Future principal payments on the notes payable as of September 30, 2021, are as follows:


Year ending December 31,
2021	$	—
2022		248,911
2023		—
2024		—
2025		—
Total notes payable	$	248,911

Revolving Demand Promissory Note

During 2019 and 2020, the Company entered into a series of promissory notes that were renegotiated and partially settled over 2019 and 2020.

On January 1, 2020, the Company issued a note (the “2020 Note”) in the face amount of $103,586 bearing 5.25% APR simple interest as settlement in full on the 2019 Note principal of $98,419 plus accrued interest of $5,167 that matured on January 1, 2020. The 2020 Note was scheduled to mature on January 1, 2021. Upon occurrence of certain conditions including the sale of a division of the Company or upon the date on which the Company closes on certain financings, the due date for some or all of the unpaid principal and accrued and unpaid interest may be accelerated. The Company assessed the terms and features of the 2020 Note and determined that none of the terms and features represented embedded derivatives that require bifurcation.

On June 30, 2020, the holder of the 2020 Note and the Company entered into an agreement to settle the 2020 Note early. As full consideration and settlement of the 2020 Note’s June 30, 2020 principal balance plus accrued and unpaid interest in the amount of $106,334, the Company issued a new promissory note to the holder in the amount of $42,534 (the “Fifth Restated Note”) with substantially similar terms as the 2020 Note. In addition, the holder subscribed for the purchase of 11,594 unregistered shares of the Company’s common stock at a subscription price of $63,800, or $5.50 per share. The issuance of shares under the subscription

agreement and the issuance of the Fifth Restated Note satisfied the payoff of the 2020 Note without premium or discount. The balance of the Fifth Restated Note was $42,534 on December 31, 2020 and is included in Notes payable.

The Fifth Restated Note was scheduled to mature on the earlier of a significant transaction, including an initial public offering, sale of substantially all assets or change of control, or January 1, 2021. The Company consummated its IPO on December 28, 2020 and the principal balance of the Fifth Restated Note plus accrued and unpaid interest was settled in full in cash on January 1, 2021.

Note Payable to CEO

On February 5, 2020 (the “Issue Date”), the Company issued a note payable to its CEO (the “CEO Note”) in the face amount of $245,250 bearing 1.59% APR simple interest in exchange for cash. The net proceeds of $245,250 were used as working capital by the Company. The note carried an original maturity of the earlier of the sixth month following the Issue Date or the date the Company has sufficient funds to repay the CEO Note. If an event of default occurs and is continuing, the Company agrees to issue a warrant to the holder with a strike price of $4.87 per share for a number of shares equal to 150% of the value of the loan. The Company assessed the terms and features of the CEO Note and determined that none of the terms and features represented embedded derivatives that require bifurcation.

On June 13, 2020, the holder of the CEO Note and the Company entered into a restated agreement (the “CEO Restated Note”). The CEO Restated Note in the amount of $248,911 extends the stated maturity date of the CEO Note from the earlier of the sixth month following the (original) Issue Date or the date the Company has sufficient funds to repay the note to the earlier of the 30th month following the (original) Issue Date or the date the Company has sufficient funds to repay the CEO Restated Note. The Issue Date, February 5, 2020, is unchanged. In addition, the interest rate was reduced, effective as of the Issue Date, from 1.59% APR to 0.25%. The CEO Restated Note also changed the exercise price of the warrant from $4.87 to $4.81 per share in the case of any default. The other provisions of the CEO Restated Note are the same, in all material respects, to the CEO Note. The Company and its CEO have agreed that the CEO Restated Note will be repaid by the end of first half of 2022. The principal balance of the CEO Note was $248,911 at September 30, 2021 and at December 31, 2020 and is included on the condensed balance sheets in Notes payable at September 30, 2021 and Notes payable, net of current portion at December 31, 2020.

The Paycheck Protection Program Loan (the “PPP Loan”)

On May 4, 2020 the Company received $27,550 in loan proceeds as part of the Federal Coronavirus Aid, Relief and Economic Security Act Paycheck Protection Program (the “PPP Act” or “PPP”) with a 1% annual interest rate. Some or all of this loan qualified for forgiveness if the Company expended not less than 60% of the loan proceeds on qualified payroll costs. During the nine months ended September 30, 2021, it was determined by the lender and by the Small Business Administration that the Company met the contractual conditions for forgiveness of the entire PPP Loan plus accrued interest and it was forgiven. The $27,550 principal balance of the PPP Loan at December 31, 2020 is included on the condensed balance sheet in Notes payable, net of current portion.

Stockholders’ Equity (Deficit)

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. A total of 5,191,957 and 4,318,357 shares of common stock were reserved for issuance upon the exercise of outstanding stock options and warrants as of September 30, 2021 and December 31, 2020, respectively.

Reverse Stock Split

On August 20, 2020, the board of directors adopted resolutions proposing that each 1.14396 shares of the Company’s issued and outstanding common stock, par value $0.001 per share, be automatically converted into one fully paid and non-assessable share of common stock, par value $0.001 (the “Reverse Stock Split”) with cash in lieu of fractional shares. On August 21, 2020, shareholders representing a majority of the issued and outstanding common stock approved the Reverse Stock Split. On August 21, 2020, the Company filed with the Delaware Secretary of State its Certificate of Amendment to its Certificate of Incorporation, effective as of August 24, 2020.

Share Issuances

In January 2020, an accredited investor subscribed for, and the Company issued, 874 shares of its stock in a private placement transaction at a per share price of $5.57. Net proceeds were approximately $4,870. Issuance costs were not material. No additional rights or options were granted to this accredited investor in connection with this issuance.

During the nine months ended September 30, 2021, an accredited investor subscribed for, and the Company issued, 9,000 shares of its stock in exchange for consulting services. The fair value of the stock was $60,391 based upon the closing price of the shares on the date of the transaction. Issuance costs were not material. No additional rights or options were granted to this accredited investor in

connection with this issuance. The $60,391 fair value is a component of selling, general and administrative costs for the nine months ended September 30, 2021.

During the nine months ended September 30, 2020 the Company issued 95,349 shares of its stock in connection with the exercise of non-qualified stock options.

In connection with the June 2021 Offering, the Company issued and sold 15,000,000 fully paid non-assessable shares of its common stock at a public offering price of $3.00 per share. Proceeds from the June 2021 Offering were $41.1 million after deducting offering costs, underwriting discounts and commissions of approximately $3.9 million. The net proceeds are and will be used as working capital by the Company.

Stock-Based Compensation

2020 Equity Incentive Plan

The Company’s 2020 Equity Incentive Plan (the “2020 Plan”) was established for granting stock incentive awards to directors, officers, employees and consultants to the Company.

Stock Options

During the nine months ended September 30, 2021, the Company granted 68,628 options to its scientific advisory board members with a strike price of $6.82 per share, vesting immediately, with an aggregate grant date fair value of $259,674.

On June 25, 2021, the Company granted a total of 90,708 options to members of its board of directors with a strike price of $2.92 per share, vesting one year from the date of the grant, with an aggregate grant date fair value of $160,000.

On August 16, 2021, the Company granted 27,240 employee stock options with a strike price of $1.79 per share, vesting in three equal annual installments commencing on the first anniversary of the grant date, with a grant date fair value of $50,000.

In May 2021, the Company issued 73,496 shares of its common stock in connection with the exercise of non-qualified stock options with a strike price of $0.38 per share. All such securities were issued without registration under the Securities Act of 1933, as amended, in reliance upon the exemption afforded by Section 4(a)(2) of that Act.

In June 2021, the Company issued 21,854 shares of its common stock in connection with the exercise of non-qualified stock options with a strike price of $2.02 per share. All such securities were issued without registration under the Securities Act of 1933, as amended, in reliance upon the exemption afforded by Section 4(a)(2) of that Act.

In August 2021, the Company issued 21,853 shares of its common stock in connection with the exercise of non-qualified stock options with a strike price of $2.02 per share. All such securities were issued without registration under the Securities Act of 1933, as amended, in reliance upon the exemption afforded by Section 4(a)(2) of that Act.

No options were granted during the nine months ended September 30, 2020.

Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense for stock options granted to employees and non-employees:


	Nine Months Ended September 30,
	2021		2020
Research and development	$	592,966	$	195,061
Selling, general and administrative		673,060		224,214
Total stock-based compensation expense	$	1,266,026	$	419,275

Warrants

Warrants Issued

On March 31, 2020, the Company issued a warrant to purchase up to 26,225 shares of its stock to one of its consultants in exchange for services. The warrant contains a strike price of $5.67 per share and has a seven-year contractual term. The warrant is

classified within stockholders’ equity at its fair value and was treated as a standalone instrument. The fair value of the warrant was determined to be $101,478 utilizing the Black-Scholes-Merton option-pricing model at the time of issuance and is included in selling, general and administrative expenses for the nine months ended September 30, 2020. The Company recognized $658,945 in warrant expense for the nine months ended September 30, 2021, included in selling, general and administration expense.

In connection with the June 2021 Offering the Company issued and sold to its underwriters a warrant to purchase up to 750,000 shares of its common stock for an aggregate purchase price of $100 pursuant to its written agreement with the underwriters. This warrant is exercisable beginning June 15, 2022 at an initial exercise price of $3.75 per share of common stock.

Warrants Exercised

No warrants were exercised for the nine months ended September 30, 2021 and 2020.

Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share applicable to common stockholders:


	Nine Months Ended September 30,
	2021			2020
Numerator:
Net loss	$	(9,744,444	)	$	(1,639,908	)
Denominator:
Weighted-average number of common shares outstanding – basic and diluted		15,868,421			8,187,517
Net loss per share applicable to common stockholders – basic and diluted