| Delaware (State or other jurisdiction of incorporation or organization) | | | 2834 (Primary Standard Industrial Classification Code Number) 6 Liberty Square, #2382 Boston, MA 02109 (857) 837-3099 | | | 81-1065054 (I.R.S. Employer Identification No.) | |
| Michael Bison Jacqueline R. Kaufman Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 (617) 570-1000 | | | Thomas A. Fitzgerald Chief Financial Officer TransCode Therapeutics, Inc. 6 Liberty Square, #2382 Boston, MA 02109 (857) 837-3099 | | | Stephen Older Rakesh Gopalan David S. Wolpa McGuireWoods LLP 1251 Avenue of the Americas, 20th Floor New York, NY 10020 (212) 548-2122 | |
| Large accelerated filer ☐ | | | Accelerated filer ☐ | | ||||||
| Non-accelerated filer ☒ | | | Smaller reporting company ☒ | | ||||||
| | | | Emerging growth company ☒ | |
| | ||||||||||||||
Title of Each Class of Securities to be Registered | | | | Proposed Maximum Aggregate Offering Price(1) | | | | Amount of Registration Fee(2) | | ||||||
Common Stock, par value $0.0001 per share | | | | | $ | 28,750,000 | | | | | | $ | 3,137 | | |
Representative Warrant(3) | | | | | | ― | | | | | | | ― | | |
Common Stock issuable upon exercise of Representative Warrant(4) | | | | | $ | 1,562,500 | | | | | | $ | 171 | | |
Total | | | | | $ | 30,312,500 | | | | | | $ | 3,308 | | |
| PRELIMINARY PROSPECTUS | | | SUBJECT TO COMPLETION | | | DATED NOVEMBER 28, 2022 | |
| | | Per Share | | | Per Pre-Funded Warrant | | | Total | | |||||||||
| | | $ | | | | | $ | | | | | $ | | | ||||
Underwriting discounts and commissions(1) | | | | $ | | | | | $ | | | | | | $ | ||||
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Proceeds to us, before expenses | | | | $ | | | | | $ | | | | | | $ | | | |
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| DILUTION | | | | | | | |
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| UNDERWRITING | | | | | | | |
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| EXPERTS | | | | | |||
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| | Nine Months Ended September 30, | | Years Ended December 31, | | |||||||||||||||||||||||||||||||||
| | Years Ended December 31, | | | 2022 | | 2021 | | 2021 | | 2020 | | ||||||||||||||||||||||||||
| | 2020 | | 2019 | | | Unaudited | | | | | | | | | | | | ||||||||||||||||||||
Statement of Operations Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Research and development | | | $ | 284,459 | | | | $ | 226,309 | | | | | $ | 7,545,628 | | | | $ | 1,468,457 | | | | $ | 2,753,966 | | | | $ | 284,459 | | | ||||||
General and administrative | | | | 442,145 | | | | | 230,556 | | | | | | 5,592,727 | | | | | 1,696,444 | | | | | 3,397,169 | | | | | 442,145 | | | ||||||
Total operating expenses | | | | 726,604 | | | | | 456,865 | | | | | | 13,138,355 | | | | | 3,164,901 | | | | | 6,151,135 | | | | | 726,604 | | | ||||||
Operating loss | | | | (726,604) | | | | | (456,865) | | | | | | (13,138,355) | | | | | (3,164,901) | | | | | (6,151,135) | | | | | (726,604) | | | ||||||
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Change in fair value of derivative liabilities | | | | (1,208,000) | | | | | 4,000 | | | | | | — | | | | | (867,000) | | | | | (867,000) | | | | | (1,208,000) | | | ||||||
Change in fair value of warranty liability | | | | (14,852) | | | | | 2,584 | | | | | | — | | | | | (6,109) | | | | | (6,109) | | | | | (14,852) | | | ||||||
Grant income | | | | 696,669 | | | | | 88,786 | | | | | 278,333 | | | | | — | | | |||||||||||||||||
Loss on sale of equipment | | | | — | | | | | — | | | | | (3,082) | | | | | — | | | |||||||||||||||||
Interest expense | | | | (394,573) | | | | | (156,965) | | | | | | — | | | | | (95,070) | | | | | (95,070) | | | | | (394,573) | | | ||||||
Interest income | | | | 136 | | | | | 34 | | | | | | 10,774 | | | | | 154 | | | | | 664 | | | | | 136 | | | ||||||
Total other income (expense) | | | | (1,617,289) | | | | | (150,347) | | | | | | 707,443 | | | | | (879,239) | | | | | (692,264) | | | | | (1,617,289) | | | ||||||
Loss before income taxes | | | | (2,343,893) | | | | | (607,212) | | | | | | (12,430,912) | | | | | (4,044,140) | | | | | (6,843,399) | | | | | (2,343,893) | | | ||||||
Income tax expense (benefit) | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||
Net loss | | | $ | (2,343,893) | | | | $ | (607,212) | | | | | $ | (12,430,912) | | | | $ | (4,044,140) | | | | $ | (6,843,399) | | | | $ | (2,343,893) | | | ||||||
Basic and diluted loss per common share | | | $ | (0.31) | | | | $ | (0.08) | | | |||||||||||||||||||||||||||
Basic and diluted loss per common share(1) | | | $ | (0.96) | | | | $ | (0.58) | | | | $ | (0.81) | | | | $ | (0.51) | | | |||||||||||||||||
Weighted average number of common shares outstanding, basic and diluted (1) | | | | 7,643,500 | | | | | 7,643,500 | | | | | | 12,977,234 | | | | | 6,932,982 | | | | | 8,425,880 | | | | | 4,636,216 | | | ||||||
Pro forma net loss per common share – basic and diluted (unaudited)(2) | | | $ | (0.20) | | | | $ | (0.05) | | | |||||||||||||||||||||||||||
Pro forma weighted average common shares outstanding (unaudited)(2) | | | | 9,959,716 | | | | | 8,440,362 | | |
| | | September 30, 2022 | | | December 31, | | |||||||||||||||||||||||||
| | December 31, 2020 | | | 2021 | | 2020 | | ||||||||||||||||||||||||
| | Actual | | Pro Forma(2) | | Pro Forma As Adjusted(3) | | | Unaudited | | | | | | | | | | | | ||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Current assets | | | $ | 831,215 | | | | | | | | | $ | 11,569,885 | | | | $ | 22,732,175 | | | | $ | 831,215 | | | ||||||
Deferred offering costs | | | | 224,153 | | | | | | | ||||||||||||||||||||||
Total assets | | | | 1,055,368 | | | | | | | | | | 12,015,573 | | | | | 22,938,443 | | | | | 1,055,368 | | | ||||||
Current liabilities | | | | 404,862 | | | | | | | | | | 3,771,376 | | | | | 2,534,097 | | | | | 404,862 | | | ||||||
Convertible promissory notes, net of unamortized debt issuance costs and debt discount | | | | 2,086,675 | | | | | | | ||||||||||||||||||||||
Derivative liabilities | | | | 1,751,000 | | | | | | | ||||||||||||||||||||||
Total liabilities | | | | 4,463,600 | | | | | | | | | | 3,771,376 | | | | | 2,534,097 | | | | | 4,463,600 | | | ||||||
Total stockholders’ deficit | | | | (3,408,232) | | | | | | | ||||||||||||||||||||||
Total stockholders’ equity (deficit) | | | | 8,244,197 | | | | | 20,404,346 | | | | | (3,408,232) | | |
| | | As of September 30, 2022 | | |||||||||
| | | (unaudited) | | |||||||||
| | | Actual | | | As Adjusted | | ||||||
Cash | | | | $ | 8,790,540 | | | | | $ | 13,870,540 | | |
Stockholders’ equity | | | | | | | | | | | | | |
Preferred stock – $0.0001 par value; 10,000,000 shares authorized actual and as adjusted; no shares issued or outstanding actual or as adjusted | | | | | — | | | | | | — | | |
Common stock – $0.0001 par value; 290,000,000 shares authorized; 12,977,234 shares issued and outstanding actual; 25,477,234 shares issued and outstanding as adjusted | | | | $ | 1,298 | | | | | $ | 2,548 | | |
Additional paid-in capital | | | | | 30,979,092 | | | | | | 36,057,842 | | |
Accumulated deficit | | | | | (22,736,193) | | | | | | (22,736,193) | | |
Total stockholders’ equity | | | | | 8,244,197 | | | | | | 13,324,197 | | |
Total capitalization | | | | $ | 8,244,197 | | | | | $ | 13,324,197 | | |
| Assumed public offering price per share | | | | | | | | | | $ | 0.48 | | |
| Net tangible book value per share at September 30, 2022 | | | | $ | 0.64 | | | | | | | | |
| Decrease in book value per share attributable to new investors | | | | $ | 0.12 | | | | | | | | |
| As adjusted net tangible book value per share after this offering | | | | | | | | | | $ | 0.52 | | |
| Accretion per share to new investors | | | | | | | | | | $ | 0.04 | | |
| | | Shares | | | Purchased | | | Total Consideration | | | Average Price Per Share | | ||||||||||||||||||
| | | Number | | | % | | | Amount | | | % | | | | | | | | ||||||||||||
Existing Shareholders | | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | ||||||
New Investors | | | | | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | |||
Total | | | | | | | | | | 100% | | | | | $ | | | | | | 100% | | | | | $ | | | |
| | | Year ended December 31, | | | | | | | | |||||||||
| | | 2020 | | | 2019 | | | Change | | |||||||||
| | | (in thousands) | | |||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Research and development | | | | $ | 284 | | | | | $ | 226 | | | | | $ | 58 | | |
General and administrative | | | | | 442 | | | | | | 231 | | | | | | 212 | | |
Total operating expenses | | | | | 726 | | | | | | 457 | | | | | | 269 | | |
Loss from operations | | | | | (726) | | | | | | (457) | | | | | | (269) | | |
Interest expense | | | | | (395) | | | | | | (157) | | | | | | (238) | | |
Change in fair value of derivative liabilities | | | | | (1,208) | | | | | | 4 | | | | | | (1,212) | | |
Change in fair value of warrant liability | | | | | (15) | | | | | | 3 | | | | | | (17) | | |
Total other income (expense), net | | | | | (1,617) | | | | | | (150) | | | | | | (1,467) | | |
Net loss | | | | $ | (2,344) | | | | | $ | (607) | | | | | $ | (1,737) | | |
| | | Year ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (in thousands) | | |||||||||
Net cash used in operating activities | | | | $ | (493) | | | | | $ | (509) | | |
Net cash provided by (used in) investing activities | | | | | — | | | | | | — | | |
Net cash provided by financing activities | | | | | 1,117 | | | | | | 500 | | |
Net increase (decrease) in cash and cash equivalents | | | | $ | 624 | | | | | $ | (9) | | |
Grant Date | | | Number of shares subject to award | | | Per share purchase price of restricted stock | | | Per share estimated fair value of award on grant date | | |||||||||
February 1, 2016 | | | | | 5,350,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
April 1, 2016 | | | | | 60,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
August 17, 2016 | | | | | 230,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
June 1, 2017 | | | | | 1,340,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
June 1, 2017(1) | | | | | (980,000) | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
June 12, 2017 | | | | | 990,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
July 15, 2017 | | | | | 349,500 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
August 28, 2017 | | | | | 304,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
December 11, 2017(1) | | | | | (1,689,500) | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
January 22, 2018 | | | | | 1,105,000 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
July 1, 2018(2) | | | | | 210,000 | | | | | $ | 0.0001 | | | | | $ | 0.0400 | | |
October 1, 2018 | | | | | 82,250 | | | | | $ | 0.0400 | | | | | $ | 0.0400 | | |
October 7, 2018 | | | | | 292,250 | | | | | $ | 0.0400 | | | | | $ | 0.0400 | | |
Name | | | Fees Earned or Paid in Cash ($) | | | Option Awards ($)(1) | | | Total ($) | | |||||||||
Philippe P. Calais(2) | | | | | — | | | | | | 109,491.60 | | | | | | 109,491.60 | | |
Erik Manting(2) | | | | | — | | | | | | 109,491.60 | | | | | | 109,491.60 | | |
| | | Shares Beneficially Owned Prior to Offering | | | Shares Beneficially Owned After Offering | | ||||||||||||||||||
Name of Beneficial Owner | | | Number | | | Percent | | | Number | | | Percent | | ||||||||||||
Greater-than-5% Stockholders | | | | | | | | | | | | | | | | | | | | | | | | | |
Zdravka Medarova, PhD, Chief Technology Officer(1) | | | | | 1,643,770 | | | | | | 12.6% | | | | | | 1,643,770 | | | | | | 6.4% | | |
Anna Moore, PhD, Co-Founder, Advisor(2) | | | | | 1,598,278 | | | | | | 12.3% | | | | | | 1,598,278 | | | | | | 6.3% | | |
Named Executive Officers and Directors | | | | | | | | | | | | | | | | | | | | | | | | | |
Robert Michael Dudley, Chief Executive Officer, President, and Director(3) | | | | | 1,741,966 | | | | | | 12.6% | | | | | | 1,741,966 | | | | | | 6.6% | | |
Thomas A. Fitzgerald, Vice President, Chief Financial Officer(4) | | | | | 393,999 | | | | | | 3.0% | | | | | | 393,999 | | | | | | 1.5% | | |
Philippe Calais, PhD, Director(5) | | | | | 152,649 | | | | | | 1.2% | | | | | | 152,649 | | | | | | 0.6% | | |
Erik Manting, PhD, Director(6) | | | | | 25,272 | | | | | | 0.2% | | | | | | 25,272 | | | | | | 0.1% | | |
Magda Marquet, PhD, Director(7) | | | | | 24,261 | | | | | | 0.2% | | | | | | 24,261 | | | | | | 0.1% | | |
All executive officers and directors as a group (5 persons) | | | | | 2,338,148 | | | | | | 17.2% | | | | | | 2,338,148 | | | | | | 8.9% | | |
| | Number of Shares | | | Number of Pre-Funded Warrants | | |
ThinkEquity | | | | | | | |
Total | | | | | | | |
| | | Per Share | | | Per Pre-Funded Warrant | | | With No Over-Allotment | | | With Full Over-Allotment | | ||||||||||||
Public offering price | | | | $ | | | | | $ | | | | | $ | | | | | $ | | | ||||
Underwriting discount (7%) | | | | $ | | | | | $ | | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us | | | | $ | | | | | $ | | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (1%) | | | | $ | | | | | $ | | | | | | $ | | | | | $ | | | |
| | | 2020 | | | 2019 | | ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 828,016 | | | | | $ | 204,471 | | |
Prepaid expenses and other current assets | | | | | 3,199 | | | | | | — | | |
Total current assets | | | | | 831,215 | | | | | | 204,471 | | |
Deferred offering costs | | | | | 224,153 | | | | | | — | | |
Total assets | | | | $ | 1,055,368 | | | | | $ | 204,471 | | |
Liabilities and Stockholders’ Equity (Deficit) | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued expenses | | | | $ | 369,177 | | | | | $ | 27,257 | | |
Due to related parties | | | | | 35,685 | | | | | | 35,685 | | |
Total current liabilities | | | | | 404,862 | | | | | | 62,942 | | |
Convertible promissory notes, net of debt issuance costs and debt discount | | | | | 2,086,675 | | | | | | 927,810 | | |
Accrued interest – convertible promissory notes | | | | | 191,687 | | | | | | 69,978 | | |
Derivative liabilities | | | | | 1,751,000 | | | | | | 239,000 | | |
Warrant liability | | | | | 29,376 | | | | | | 14,524 | | |
Total liabilities | | | | | 4,463,600 | | | | | | 1,314,254 | | |
Stockholders’ equity (deficit): | | | | | | | | | | | | | |
Preferred stock – $0.0001 par value; 5,000,000 and -0- shares authorized at December 31, 2020 and 2019, respectively; -0- shares issued or outstanding at December 31, 2020 | | | | | — | | | | | | — | | |
Common stock – $0.0001 par value, 20,000,000 shares authorized at December 31, 2020 and 2019; 7,643,500 shares issued and outstanding at December 31, 2020 and 2019 | | | | | 764 | | | | | | 764 | | |
Additional paid-in capital | | | | | 65,649 | | | | | | 19,714 | | |
Subscription receivable | | | | | (12,763) | | | | | | (12,272) | | |
Accumulated deficit | | | | | (3,461,882) | | | | | | (1,117,989) | | |
Total stockholders’ equity (deficit) | | | | | (3,408,232) | | | | | | (1,109,783) | | |
Total liabilities and stockholders’ equity (deficit) | | | | $ | 1,055,368 | | | | | $ | 204,471 | | |
| | | 2020 | | | 2019 | | ||||||
Operating expenses: | | | | | | | | | | | | | |
Research and development | | | | $ | 284,459 | | | | | $ | 226,309 | | |
General and administrative | | | | | 442,145 | | | | | | 230,556 | | |
Total operating expenses | | | | | 726,604 | | | | | | 456,865 | | |
Operating loss | | | | | (726,604) | | | | | | (456,865) | | |
Other income (expense): | | | | | | | | | | | | | |
Change in fair value of derivative liabilities | | | | | (1,208,000) | | | | | | 4,000 | | |
Change in fair value of warrant liability | | | | | (14,852) | | | | | | 2,584 | | |
Interest expense | | | | | (394,573) | | | | | | (156,965) | | |
Interest income | | | | | 136 | | | | | | 34 | | |
Total other income (expense) | | | | | (1,617,289) | | | | | | (150,347) | | |
Loss before income taxes | | | | | (2,343,893) | | | | | | (607,212) | | |
Income tax expense (benefit) | | | | | — | | | | | | — | | |
Net loss | | | | $ | (2,343,893) | | | | | $ | (607,212) | | |
Basic and diluted loss per common share | | | | $ | (0.31) | | | | | $ | (0.08) | | |
Weighted average number of common shares outstanding, basic and diluted | | | | | 7,643,500 | | | | | | 7,643,500 | | |
| | | Common Stock | | | Additional Paid-In Capital | | | Subscription Receivable | | | Accumulated Deficit | | | Total Stockholders’ Equity (Deficit) | | |||||||||||||||||||||
| | | Shares | | | Amount | | ||||||||||||||||||||||||||||||
Balance, December 31, 2018 | | | | | 7,643,500 | | | | | $ | 764 | | | | | $ | 17,845 | | | | | $ | (11,800) | | | | | $ | (510,777) | | | | | $ | (503,968) | | |
Interest on subscription receivable | | | | | — | | | | | | — | | | | | | 472 | | | | | | (472) | | | | | | — | | | | | | — | | |
Share-based compensation expense | | | | | — | | | | | | — | | | | | | 1,397 | | | | | | — | | | | | | — | | | | | | 1,397 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (607,212) | | | | | | (607,212) | | |
Balance, December 31, 2019 | | | | | 7,643,500 | | | | | $ | 764 | | | | | $ | 19,714 | | | | | $ | (12,272) | | | | | $ | (1,117,989) | | | | | $ | (1,109,783) | | |
Interest on subscription receivable | | | | | — | | | | | | — | | | | | | 491 | | | | | | (491) | | | | | | — | | | | | | — | | |
Share-based compensation expense | | | | | — | | | | | | — | | | | | | 45,444 | | | | | | — | | | | | | — | | | | | | 45,444 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,343,893) | | | | | | (2,343,893) | | |
Balance, December 31, 2020 | | | | | 7,643,500 | | | | | $ | 764 | | | | | $ | 65,649 | | | | | $ | 12,763 | | | | | $ | (3,461,882) | | | | | $ | (3,408,232) | | |
| | | 2020 | | | 2019 | | ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss | | | | $ | (2,343,893) | | | | | $ | (607,212) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Share-based compensation expense | | | | | 45,444 | | | | | | 1,397 | | |
Change in fair market value of derivative liabilities | | | | | 1,208,000 | | | | | | (4,000) | | |
Change in fair market value of warrant liability | | | | | 14,852 | | | | | | (2,584) | | |
Non-cash interest expense | | | | | 272,864 | | | | | | 108,595 | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Prepaid expenses and other current assets | | | | | (3,199) | | | | | | 1,667 | | |
Accounts payable and accrued expenses | | | | | 191,253 | | | | | | (54,741) | | |
Accrued interest on convertible promissory notes | | | | | 121,709 | | | | | | 48,370 | | |
Net cash used in operating activities | | | | | (492,971) | | | | | | (508,508) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from convertible promissory notes | | | | | 1,190,000 | | | | | | 500,000 | | |
Payments of deferred offering costs | | | | | (73,484) | | | | | | — | | |
Net cash provided by financing activities | | | | | 1,116,516 | | | | | | 500,000 | | |
Net change in cash and cash equivalents | | | | | 623,545 | | | | | | (8,508) | | |
Cash and cash equivalents, beginning of year | | | | | 204,471 | | | | | | 212,979 | | |
Cash and cash equivalents, end of year | | | | $ | 828,016 | | | | | $ | 204,471 | | |
Supplemental disclosure of cash flow | | | | | | | | | | | | | |
Cash paid during the year for | | | | | | | | | | | | | |
Interest | | | | $ | — | | | | | $ | — | | |
Income taxes | | | | $ | — | | | | | $ | — | | |
Supplemental disclosure of non-cash investing and financing activities | | | | | | | | | | | | | |
Accrued interest on subscriptions receivable | | | | $ | (491) | | | | | $ | (472) | | |
Debt discounts associated with derivative liabilities of convertible promissory notes | | | | $ | 304,000 | | | | | $ | 117,000 | | |
Deferred offering costs included in accounts payable and accrued expenses | | | | $ | 150,669 | | | | | $ | — | | |
| | | Fair value measurements as of December 31, 2019, using: | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | $ | — | | | | | $ | — | | | | | $ | 239,000 | | | | | $ | 239,000 | | |
Warrant liability | | | | | — | | | | | | — | | | | | | 14,524 | | | | | | 14,524 | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 253,524 | | | | | $ | 253,524 | | |
| | | Fair value measurements as of December 31, 2020, using: | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | $ | — | | | | | $ | — | | | | | | 1,751,000 | | | | | | 1,751,000 | | |
Warrant liability | | | | | — | | | | | | — | | | | | | 29,376 | | | | | | 29,376 | | �� |
| | | | $ | — | | | | | $ | — | | | | | $ | 1,780,376 | | | | | | 1,780,376 | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Professional fees | | | | $ | 193,281 | | | | | $ | 1,650 | | |
Consulting fees | | | | | 80,013 | | | | | | — | | |
Research and development billings | | | | | 51,806 | | | | | | — | | |
State filing and other fees | | | | | 1,778 | | | | | | 607 | | |
Accrued license payments | | | | | 42,300 | | | | | | 25,000 | | |
| | | | $ | 369,178 | | | | | $ | 27,257 | | |
Milestone Event | | | Amount | | |||
Enrollment of first patient in a phase II clinical trial of a therapeutic product or process | | | | $ | 100,000 | | |
Enrollment of first patient in a phase III clinical trial of a therapeutic product or process | | | | $ | 200,000 | | |
First commercial sale of a therapeutic product or process | | | | $ | 1,000,000 | | |
Filing of an application for regulatory approval of a clinical diagnostic product or process | | | | $ | 100,000 | | |
First regulatory approval of a clinical diagnostic product or process | | | | $ | 150,000 | | |
Note Identifier | | | Issue Date | | | Principal Amount | | | Accrued Interest at December 31, 2020 | | | Accrued Interest at December 31, 2019 | | |||||||||
Note One | | | May 2, 2018 | | | | $ | 500,000 | | | | | $ | 80,137 | | | | | $ | 50,055 | | |
Note Two | | | June 26, 2018 | | | | $ | 50,000 | | | | | $ | 7,562 | | | | | $ | 4,553 | | |
Note Three | | | March 2, 2019 | | | | $ | 100,000 | | | | | $ | 10,767 | | | | | $ | 4,751 | | |
Note Four | | | March 5, 2019 | | | | $ | 50,000 | | | | | $ | 5,466 | | | | | $ | 2,458 | | |
Note Five | | | March 8, 2019 | | | | $ | 50,000 | | | | | $ | 5,384 | | | | | $ | 2,375 | | |
Note Six | | | March 15, 2019 | | | | $ | 50,000 | | | | | $ | 5,326 | | | | | $ | 2,318 | | |
Note Seven | | | March 20, 2019 | | | | $ | 50,000 | | | | | $ | 5,293 | | | | | $ | 2,285 | | |
Note Identifier | | | Issue Date | | | Principal Amount | | | Accrued Interest at December 31, 2020 | | | Accrued Interest at December 31, 2019 | | |||||||||
Note Eight | | | November 7, 2019 | | | | $ | 100,000 | | | | | $ | 6,723 | | | | | $ | 723 | | |
Note Nine | | | November 7, 2019 | | | | $ | 100,000 | | | | | $ | 6,460 | | | | | $ | 460 | | |
Note Ten | | | February 17, 2020 | | | | $ | 1,000,000 | | | | | $ | 50,984 | | | | | | — | | |
Note Eleven | | | April 3, 2020 | | | | $ | 40,000 | | | | | $ | 1,790 | | | | | | — | | |
Note Twelve | | | May 8, 2020 | | | | $ | 50,000 | | | | | $ | 1,951 | | | | | | — | | |
Note Thirteen | | | May 8, 2020 | | | | $ | 50,000 | | | | | $ | 1,951 | | | | | | — | | |
Note Fourteen | | | May 15, 2020 | | | | $ | 50,000 | | | | | $ | 1,893 | | | | | | — | | |
| | | 2020 | | | 2019 | | ||||||
Principal amount of convertible promissory notes | | | | $ | 2,240,000 | | | | | $ | 1,050,000 | | |
Less unamortized debt issuance costs | | | | | (8,002) | | | | | | (18,540) | | |
Less unamortized debt discounts | | | | | (145,323) | | | | | | (103,650) | | |
Convertible promissory notes, net | | | | $ | 2,086,675 | | | | | $ | 927,810 | | |
| | | Warrant Liability | | |||
Fair value at December 31, 2018 | | | | $ | 17,108 | | |
Change in fair value | | | | | (2,584) | | |
Fair value at December 31, 2019 | | | | | 14,524 | | |
Change in fair value | | | | | 14,852 | | |
Fair value at December 31, 2020 | | | | $ | 29,376 | | |
| | | As of December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Fair value per share of Company’s common stock | | | | $ | 2.37 | | | | | $ | 0.06 | | |
Dividend yield | | | | | 0.0% | | | | | | 0.0% | | |
Expected volatility | | | | | 84.0% | | | | | | 79.0% | | |
Risk Free interest rate | | | | | 0.3% | | | | | | 1.7% | | |
Expected life (years) | | | | | 4.67 | | | | | | 4.73 | | |
Fair value of warrants | | | | $ | 29,376 | | | | | $ | 14,524 | | |
| | | Number of shares | | | Weighted average exercise price per share | | | Weighted average remaining contractual term (years) | | |||||||||
Outstanding at December 31, 2019 | | | | | — | | | | | | — | | | | | | — | | |
Granted | | | | | 2,895,500 | | | | | $ | 0.15 | | | | | | 6.4 | | |
Exercised | | | | | — | | | | | | — | | | | | | — | | |
Forfeited | | | | | — | | | | | | — | | | | | | — | | |
Outstanding at December 31, 2020 | | | | | 2,895,500 | | | | | $ | 0.15 | | | | | | 6.4 | | |
| | | Years Ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Numerator | | | | | | | | | | | | | |
Net loss | | | | $ | (2,343,893) | | | | | $ | (607,212) | | |
Denominator | | | | | | | | | | | | | |
Weighted-average common shares outstanding, basic and diluted | | | | | 7,643,500 | | | | | | 7,643,500 | | |
Net loss per share attributable to common stockholders, basic and diluted | | | | $ | (0.31) | | | | | $ | (0.08) | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Shares issuable on conversion of Promissory Notes | | | | | 1,712,456 | | | | | | 777,763 | | |
Shares issuable on exercise of Warrants | | | | | 20,427 | | | | | | 19,099 | | |
Shares issuable on exercise of vested Options | | | | | 583,333 | | | | | | — | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Federal income tax benefit at statutory rate | | | | | 21.0% | | | | | | 21.0% | | |
State and local tax, net of federal benefit | | | | | 1.9% | | | | | | 4.9% | | |
Permanent differences | | | | | (14.8)% | | | | | | (4.8)% | | |
Change in valuation allowance | | | | | (7.5)% | | | | | | (21.1)% | | |
Effective Income Tax rate | | | | | 0.0% | | | | | | 0.0% | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Net operating loss carryforwards | | | | $ | 421,000 | | | | | $ | 243,000 | | |
Capitalized research and development costs, start-up costs and amortization | | | | | 14,000 | | | | | | 17,000 | | |
Total deferred tax assets | | | | | 435,000 | | | | | | 260,000 | | |
Less valuation allowance | | | | | (435,000) | | | | | | (260,000) | | |
Net deferred taxes | | | | $ | — | | | | | $ | — | | |
| | | Amount Paid or to Be Paid | | |||
SEC registration fee | | | | $ | 3,308 | | |
FINRA filing fee | | | | | 4,250 | | |
listing fee | | | | | * | | |
Printing and mailing | | | | | * | | |
Legal fees and expenses | | | | | * | | |
Accounting fees and expenses | | | | | * | | |
Transfer agent and registrar fees and expenses | | | | | * | | |
Miscellaneous | | | | | * | | |
Total | | | | | * | | |
| | | Amount Paid or to Be Paid | | |||
SEC registration fee | | | | $ | 808 | | |
FINRA filing fee | | | | | 3,249 | | |
Printing and mailing | | | | | 52,000 | | |
Legal fees and expenses | | | | | 225,000 | | |
Accounting fees and expenses | | | | | 40,000 | | |
Miscellaneous | | | | | 118,943 | | |
Total | | | | $ | 440,000 | | |
| NAME | | | TITLE | | | DATE | |
| /s/ Robert Michael Dudley Robert Michael Dudley | | | Director and Chief Executive Officer (Principal Executive Officer) | | | | |
| /s/ Thomas A. Fitzgerald Thomas A. Fitzgerald, MBA | | | Director and Chief Financial Officer (Principal Financial and Accounting Officer) | | | | |
| /s/ Philippe P. Calais Philippe P. Calais, PhD | | | Director | | | | |
| /s/ Erik Manting Erik Manting, PhD | | | Director | | | | |
| /s/ Magda Marquet Magda Marquet, PhD | | | Director | | | |