Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | MONOPAR THERAPEUTICS INC. | |
Entity Central Index Key | 0001645469 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 12,590,612 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39070 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 32-0463781 | |
Entity Address Address Line 1 | 1000 Skokie Blvd. | |
Entity Address Address Line 2 | Suite 350 | |
Entity Address City Or Town | Wilmette | |
Entity Address State Or Province | IL | |
Entity Address Postal Zip Code | 60091 | |
City Area Code | 847 | |
Local Phone Number | 388-0349 | |
Security 12b Title | Common Stock, $0.001 par value | |
Trading Symbol | MNPR | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 22,341,564 | $ 16,737,109 |
Other current assets | 106,800 | 62,690 |
Total current assets | 22,448,364 | 16,799,799 |
Other non-current assets | 68,858 | 68,858 |
Total assets | 22,517,222 | 16,868,657 |
Current liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 1,239,937 | 1,176,666 |
Total current liabilities and total liabilities | 1,239,937 | 1,176,666 |
Commitments and contingencies (Note 6) | 0 | 0 |
Stockholders' equity: | ||
Common stock, par value of $0.001 per share, 40,000,000 shares authorized, 12,590,612 and 11,453,465 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively | 12,591 | 11,453 |
Additional paid-in capital | 59,877,631 | 47,873,570 |
Accumulated other comprehensive loss | (5,147) | (7,873) |
Accumulated deficit | (38,607,790) | (32,185,159) |
Total stockholders' equity | 21,277,285 | 15,691,991 |
Total liabilities and stockholders' equity | $ 22,517,222 | $ 16,868,657 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 12,590,612 | 11,453,465 |
Common stock, outstanding | 12,590,612 | 11,453,465 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating expenses: | ||||
Research and development | $ 1,827,322 | $ 1,255,916 | $ 4,510,531 | $ 2,432,826 |
General and administrative | 631,698 | 392,063 | 1,935,599 | 1,815,299 |
Total operating expenses | 2,459,020 | 1,647,979 | 6,446,130 | 4,248,125 |
Loss from operations | (2,459,020) | (1,647,979) | (6,446,130) | (4,248,125) |
Other income: | ||||
Interest income | 577 | 8,541 | 23,499 | 72,000 |
Net loss | (2,458,443) | (1,639,438) | (6,422,631) | (4,176,125) |
Other comprehensive income: | ||||
Foreign currency translation gain | 9 | 1,510 | 2,726 | 926 |
Comprehensive loss | $ (2,458,434) | $ (1,637,928) | $ (6,419,905) | $ (4,175,199) |
Net loss per share: | ||||
Basic and diluted | $ (0.20) | $ (0.15) | $ (0.52) | $ (0.39) |
Weighted average shares outstanding: | ||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 12,582,728 | 11,116,409 | 12,432,318 | 10,792,413 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive loss | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 10,587,632 | ||||
Balance, amount at Dec. 31, 2019 | $ 12,627,856 | $ 10,587 | $ 38,508,825 | $ (10,970) | $ (25,880,586) |
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $16,284, shares | 33,903 | ||||
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $16,284, amount | 526,143 | $ 34 | 526,109 | 0 | 0 |
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, shares | 1,288 | ||||
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, amount | 0 | $ 1 | (1) | 0 | 0 |
Stock-based compensation (non-cash) | 338,497 | 0 | 338,497 | 0 | 0 |
Offering costs | (2,161) | 0 | (2,161) | 0 | 0 |
Net loss | (1,090,877) | 0 | 0 | 0 | (1,090,877) |
Other comprehensive income (Loss), Net of Tax | (4,041) | $ 0 | 0 | (4,041) | 0 |
Balance, shares at Mar. 31, 2020 | 10,622,823 | ||||
Balance, amount at Mar. 31, 2020 | 12,395,417 | $ 10,622 | 39,371,269 | (15,011) | (26,971,463) |
Balance, shares at Dec. 31, 2019 | 10,587,632 | ||||
Balance, amount at Dec. 31, 2019 | 12,627,856 | $ 10,587 | 38,508,825 | (10,970) | (25,880,586) |
Net loss | (4,176,125) | ||||
Balance, shares at Sep. 30, 2020 | 11,452,177 | ||||
Balance, amount at Sep. 30, 2020 | 17,491,612 | $ 11,452 | 47,546,915 | (10,044) | (30,056,711) |
Balance, shares at Mar. 31, 2020 | 10,622,823 | ||||
Balance, amount at Mar. 31, 2020 | 12,395,417 | $ 10,622 | 39,371,269 | (15,011) | (26,971,463) |
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, shares | 1,292 | ||||
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, amount | 0 | $ 1 | (1) | 0 | |
Stock-based compensation (non-cash) | 367,358 | 0 | 367,358 | 0 | 0 |
Offering costs | (116,605) | 0 | (116,605) | ||
Net loss | (1,445,810) | 0 | 0 | 0 | (1,445,810) |
Other comprehensive income (Loss), Net of Tax | 3,457 | $ 0 | 0 | 3,457 | 0 |
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $29,425, shares | 111,858 | ||||
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $29,425, amount | 950,690 | $ 113 | 950,577 | 0 | 0 |
Balance, shares at Jun. 30, 2020 | 10,735,973 | ||||
Balance, amount at Jun. 30, 2020 | 12,154,507 | $ 10,736 | 40,572,598 | (11,554) | (28,417,273) |
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, shares | 1,288 | ||||
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, amount | 0 | $ 1 | (1) | 0 | 0 |
Stock-based compensation (non-cash) | 283,713 | 0 | 283,713 | 0 | 0 |
Offering costs | (7,138) | 0 | (7,138) | ||
Net loss | (1,639,438) | 0 | 0 | 0 | (1,639,438) |
Other comprehensive income (Loss), Net of Tax | 1,510 | $ 0 | 0 | 1,510 | 0 |
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $207,326, shares | 714,916 | ||||
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $207,326, amount | 6,698,458 | $ 715 | 6,697,743 | 0 | 0 |
Balance, shares at Sep. 30, 2020 | 11,452,177 | ||||
Balance, amount at Sep. 30, 2020 | 17,491,612 | $ 11,452 | 47,546,915 | (10,044) | (30,056,711) |
Balance, shares at Dec. 31, 2020 | 11,453,465 | ||||
Balance, amount at Dec. 31, 2020 | 15,691,991 | $ 11,453 | 47,873,570 | (7,873) | (32,185,159) |
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, shares | 3,004 | ||||
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, amount | 0 | $ 3 | (3) | 0 | 0 |
Stock-based compensation (non-cash) | 368,232 | 0 | 368,232 | 0 | 0 |
Net loss | (1,884,019) | 0 | 0 | 0 | (1,884,019) |
Other comprehensive income (Loss), Net of Tax | 2,774 | $ 0 | 0 | 2,774 | 0 |
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $338,153, shares | 1,104,047 | ||||
Issuance of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions and fees of $338,153, amount | 10,925,312 | $ 1,104 | 10,924,208 | 0 | 0 |
Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes, shares | 6,504 | ||||
Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes, amount | (21,500) | $ 7 | (21,507) | 0 | 0 |
Issuance of common stock upon exercise of stock options, shares | 2,913 | ||||
Issuance of common stock upon exercise of stock options, amount | 17,478 | $ 3 | 17,475 | 0 | 0 |
Balance, shares at Mar. 31, 2021 | 12,569,933 | ||||
Balance, amount at Mar. 31, 2021 | 25,100,268 | $ 12,570 | 59,161,975 | (5,099) | (34,069,178) |
Balance, shares at Dec. 31, 2020 | 11,453,465 | ||||
Balance, amount at Dec. 31, 2020 | 15,691,991 | $ 11,453 | 47,873,570 | (7,873) | (32,185,159) |
Net loss | (6,422,631) | ||||
Balance, shares at Sep. 30, 2021 | 12,590,612 | ||||
Balance, amount at Sep. 30, 2021 | 21,277,285 | $ 12,591 | 59,877,631 | (5,147) | (38,607,790) |
Balance, shares at Mar. 31, 2021 | 12,569,933 | ||||
Balance, amount at Mar. 31, 2021 | 25,100,268 | $ 12,570 | 59,161,975 | (5,099) | (34,069,178) |
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, shares | 3,008 | ||||
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, amount | 0 | $ 3 | (3) | 0 | 0 |
Stock-based compensation (non-cash) | 357,593 | 0 | 357,593 | 0 | 0 |
Net loss | (2,080,169) | 0 | 0 | 0 | (2,080,169) |
Other comprehensive income (Loss), Net of Tax | (57) | $ 0 | 0 | (57) | 0 |
Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes, shares | 9,787 | ||||
Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes, amount | (24,003) | $ 10 | (24,013) | 0 | 0 |
Balance, shares at Jun. 30, 2021 | 12,582,728 | ||||
Balance, amount at Jun. 30, 2021 | 23,353,632 | $ 12,583 | 59,495,552 | (5,156) | (36,149,347) |
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, shares | 3,004 | ||||
Issuance of common stock to non-employee directors pursuant to vested restricted stock units, amount | 0 | $ 3 | (3) | 0 | 0 |
Stock-based compensation (non-cash) | 392,065 | 0 | 392,065 | 0 | 0 |
Net loss | (2,458,443) | 0 | 0 | 0 | (2,458,443) |
Other comprehensive income (Loss), Net of Tax | 9 | $ 0 | 0 | 9 | 0 |
Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes, shares | 4,880 | ||||
Issuance of common stock to employees pursuant to vested restricted stock units, net of taxes, amount | (9,978) | $ 5 | (9,983) | 0 | 0 |
Balance, shares at Sep. 30, 2021 | 12,590,612 | ||||
Balance, amount at Sep. 30, 2021 | $ 21,277,285 | $ 12,591 | $ 59,877,631 | $ (5,147) | $ (38,607,790) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net Income (Loss) Attributable to Parent | $ (6,422,631) | $ (4,176,125) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense (non-cash) | 1,117,890 | 989,568 |
Changes in operating assets and liabilities, net | ||
Other current assets | (44,111) | (45,649) |
Accounts payable, accrued expenses and other current liabilities | 63,356 | (189,372) |
Net cash used in operating activities | (5,285,496) | (3,421,578) |
Cash flows from financing activities: | ||
Cash proceeds from the sales of common stock under a Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC, net of commissions, fees and offering costs of $338,153 and $253,035 for the nine months ended September 30, 2021, and 2020, respectively | 10,925,312 | 8,175,290 |
Other offering costs | 0 | (108,430) |
Taxes paid related to net share settlement of vested restricted stock units | (55,481) | 0 |
Cash proceeds from the issuance of stock upon exercise of stock options | 17,478 | 0 |
PPP forgivable bank loan | 0 | 122,400 |
Net cash provided by financing activities | 10,887,309 | 8,189,260 |
Effect of exchange rates | 2,642 | 1,061 |
Net increase (decrease) in cash and cash equivalents | 5,604,455 | 4,768,743 |
Cash and cash equivalents at beginning of period | 16,737,109 | 13,213,929 |
Cash and cash equivalents at end of period | $ 22,341,564 | $ 17,982,672 |
Nature of Business and Liquidit
Nature of Business and Liquidity | 9 Months Ended |
Sep. 30, 2021 | |
Nature of Business and Liquidity | |
Note 1. Nature of Business and Liquidity | Note 1 - Nature of Business and Liquidity Nature of Business Monopar Therapeutics Inc. (“Monopar” or the “Company”) is a clinical-stage biopharmaceutical company focused on developing proprietary therapeutics designed to extend life or improve quality of life for cancer patients. Monopar currently has four compounds in development: 1) Validive ® Liquidity The Company has incurred an accumulated deficit of approximately $38.6 million as of September 30, 2021. To date, the Company has primarily funded its operations with the net proceeds from the Company’s initial public offering of its common stock on Nasdaq, sales of its common stock in the public market under a Capital on Demand TM The coronavirus disease (“COVID-19”) pandemic continues to affect economies and business around the world. In response to COVID-19 and its effects on clinical trials, in 2020 Monopar modified the original adaptive design Phase 3 clinical trial for its lead product candidate, Validive, to be a Phase 2b/3 clinical trial (“VOICE”) to better fit the types of trials which can enroll sufficient required patients in the current environment. This modification allowed the Company to activate the VOICE clinical trial without requiring near-term financing. To complete the VOICE clinical program, including, if required, completing a second Phase 3 confirmatory clinical trial, Monopar will require additional funding in the millions or tens of millions of dollars (depending on if the Company has consummated a collaboration or partnership or neither for Validive), which it is planning to pursue in the next 12 months. Due to many uncertainties, the Company is unable to estimate the pandemic’s financial impact or duration in light of vaccine rollouts and adverse new cases surging from COVID-19 variants at this time, or its potential impact on the Company’s current clinical trials, including COVID-19’s effect on drug candidate manufacturing, shipping, patient recruitment at clinical sites and regulatory agencies around the globe. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Significant Accounting Policies | |
Note 2. Significant Accounting Policies | Note 2 - Significant Accounting Policies Basis of Presentation These condensed consolidated financial statements include the financial results of Monopar Therapeutics Inc., its wholly-owned French subsidiary, Monopar Therapeutics, SARL, and its wholly-owned Australian subsidiary, Monopar Therapeutics Australia Pty Ltd and have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all disclosures required by GAAP for financial reporting. All intercompany accounts have been eliminated. The principal accounting policies applied in the preparation of these condensed consolidated financial statements are set out below and have been consistently applied in all periods presented. The Company has been primarily involved in performing research activities, developing product candidates, and raising capital to support and expand these activities. The accompanying unaudited condensed consolidated financial statements contain all normal, recurring adjustments necessary to present fairly the Company’s condensed consolidated financial position as of September 30, 2021, the Company’s condensed consolidated results of operations and comprehensive loss for the three and nine months ended September 30, 2021, and 2020, and the Company’s condensed consolidated cash flows for the nine months ended September 30, 2021, and 2020. The condensed consolidated results of operations and comprehensive loss and condensed consolidated cash flows for the periods presented are not necessarily indicative of the consolidated results of operations or cash flows which may be reported for the remainder of 2021 or for any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2021. Functional Currency The Company's consolidated functional currency is the U.S. Dollar. The Company's Australian subsidiary and French subsidiary use the Australian Dollar and European Euro, respectively, as their functional currency. At each quarter-end, each foreign subsidiary's balance sheets are translated into U.S. Dollars based upon the quarter-end exchange rate, while their statements of operations and comprehensive loss and statements of cash flows are translated into U.S. Dollars based upon an average exchange rate during the period. Comprehensive Loss Comprehensive loss represents net loss plus any gains or losses not reported in the condensed consolidated statements of operations and comprehensive loss, such as foreign currency translations gains and losses that are typically reflected on the Company’s condensed consolidated statements of stockholders’ equity. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Going Concern Assessment The Company applies Accounting Standards Codification 205-40 (“ASC 205-40”), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less on the date of purchase to be cash equivalents. Cash equivalents as of September 30, 2021, and December 31, 2020, consisted of one money market account. Deferred Offering Costs Deferred offering costs represent legal, auditing, travel and filing fees related to fundraising efforts that have not yet been concluded. There were no deferred offering costs on the Balance Sheets as of September 30, 2021, and December 31, 2020 Prepaid Expenses Prepayments are expenditures for goods or services before the goods are used or the services are received and are charged to operations as the benefits are realized. Prepaid expenses may include payments to development collaborators in excess of actual expenses incurred by the collaborator, measured at the end of each reporting period. Prepayments also include insurance premiums, dues and subscriptions and software costs of $10,000 or more per year that are expensed monthly over the life of the contract, which is typically one year. Prepaid expenses are reflected on the Company’s condensed consolidated balance sheets as other current assets. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company maintains cash and cash equivalents at two reputable financial institutions. As of September 30, 2021, the balance at one financial institution was in excess of the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurable limit. The Company has not experienced any losses on its deposits since inception and management believes the Company is not exposed to significant risks with respect to these financial institutions. Fair Value of Financial Instruments For financial instruments consisting of cash and cash equivalents, accounts payable, accrued expenses, and other current liabilities, the carrying amounts are reasonable estimates of fair value due to their relatively short maturities. The Company adopted ASC 820, Fair Value Measurements and Disclosures, The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources. Unobservable inputs reflect a reporting entity’s pricing an asset or liability developed based on the best information available under the circumstances. The fair value hierarchy consists of the following three levels: Level 1 Level 2 Level 3 Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2 or 3 of the fair value hierarchy during the three and nine months ended September 30, 2021, and 2020. The following table presents the assets and liabilities recorded that are reported at fair value on our condensed consolidated balance sheets on a recurring basis. No values were recorded in Level 2 or Level 3 at September 30, 2021, and December 31, 2020. Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2021 Level 1 Total Assets Cash equivalents (1) $ 21,983,680 $ 21,983,680 Total $ 21,983,680 $ 21,983,680 December 31, 2020 Level 1 Total Assets Cash equivalents (1) $ 16,605,682 $ 16,605,682 Total $ 16,605,682 $ 16,605,682 (1) Cash equivalents represent the fair value of the Company’s investment in a money market account. Net Loss per Share Net loss per share for the three and nine months ended September 30, 2021, and 2020 is calculated by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted net loss per share for the three and nine months ended September 30, 2021, and 2020 is calculated by dividing net loss by the weighted-average shares of the sum of a) weighted average common stock outstanding (12,582,728 and 11,116,409 shares for the three months ended September 30, 2021, and 2020, respectively, and 12,432,318 and 10,792,413 shares for the nine months ended September 30, 2021, and 2020, respectively) and b) potentially dilutive shares of common stock (such as stock options and restricted stock units) outstanding during the period. As of September 30, 2021, and 2020, potentially dilutive securities included stock-based awards to purchase up to 1,761,007 and 1,303,674 shares of the Company’s common stock, respectively. For the three and nine months ended September 30, 2021, and 2020, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive. Research and Development Expenses Research and development (“R&D”) costs are expensed as incurred. Major components of R&D expenses include salaries and benefits paid to the Company’s R&D staff, compensation expenses of G&A personnel performing R&D, fees paid to consultants and to the entities that conduct certain R&D activities on the Company’s behalf and materials and supplies which were used in R&D activities during the reporting period. Clinical Trial Expense The Company accrues and expenses the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations, service providers, and clinical trial sites. The Company estimates the amounts to accrue based upon discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as R&D expenses. Clinical trial site costs related to patient screening and enrollment are accrued as patients are screened/entered into the trial. Collaborative Agreements The Company and its collaborative partners are active participants in collaborative agreements and all parties would be exposed to significant risks and rewards depending on the technical and commercial success of the activities. Contractual payments to the other parties in collaboration agreements and costs incurred by the Company when the Company is deemed to be the principal participant for a given transaction are recognized on a gross basis in R&D expenses. Royalties and license payments are recorded as earned. During the three and nine months ended September 30, 2021, and 2020, no milestones were met, and no royalties were earned, therefore, the Company did not pay or accrue/expense any license or royalty payments. Licensing Agreements The Company has various agreements licensing technology utilized in the development of its product or technology programs. The licenses contain success milestone obligations and royalties on future sales. During the three and nine months ended September 30, 2021, and 2020, no milestones were met, and no royalties were earned, therefore, the Company did not pay or accrue/expense any license or royalty payments under any of its license agreements. Patent Costs The Company expenses costs relating to issued patents and patent applications, including costs relating to legal, renewal and application fees, as a component of general and administrative expenses in its condensed consolidated statements of operations and comprehensive loss. Income Taxes The Company uses an asset and liability approach for accounting for deferred income taxes, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements but have not been reflected in its taxable income. Estimates and judgments are required in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. The Company regularly assesses the likelihood that its deferred income tax assets will be realized from recoverable income taxes or recovered from future taxable income. To the extent that the Company believes any amounts are not “more likely than not” to be realized, the Company records a valuation allowance to reduce the deferred income tax assets. In the event the Company determines that all or part of the net deferred tax assets are not realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. Similarly, if the Company subsequently determines deferred income tax assets that were previously determined to be unrealizable are now realizable, the respective valuation allowance would be reversed, resulting in an adjustment to earnings in the period such determination is made. Internal Revenue Code Sections 382 and 383 (“Sections 382 and 383”) limit the use of net operating loss (“NOL”) carryforwards and R&D credits, after an ownership change. To date, the Company has not conducted a Section 382 or 383 study, however, because the Company will continue to raise significant amounts of equity in the coming years, the Company expects that Sections 382 and 383 will limit the Company’s usage of NOLs and R&D credits in the future. ASC 740, Income Taxes The Company is subject to U.S. Federal, Illinois and California income taxes. In addition, the Company is subject to local tax laws of France and Australia. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company was incorporated on December 16, 2015, and is subject to U.S. Federal, state and local tax examinations by tax authorities for the tax years 2015 through 2020. The Company does not anticipate significant changes to its current uncertain tax positions through September 30, 2021. The Company filed its U.S. Federal and state tax returns for the year ended December 31, 2020, prior to the extended filing deadlines in all jurisdictions. Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based awards, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs. Stock-based compensation expense for awards granted to employees, non-employee directors and consultants are based on the fair value of the underlying instrument calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating the future stock price volatility, forfeiture rates and expected terms. The expected volatility rates are estimated based on the actual volatility of comparable public companies over recent historical periods of the same length as the expected term. The Company selected these companies based on reasonably comparable characteristics, including market capitalization, stage of corporate development and with historical share price information sufficient to meet the expected term (life) of the stock-based awards. The expected term for options granted to date is estimated using the simplified method. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying a cash dividend in the future vesting period and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2021 | |
Capital Stock | |
Note 3. Capital Stock | Note 3 - Capital Stock Holders of the common stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefor. To date no dividends have been declared. Upon dissolution and liquidation of the Company, holders of the common stock are entitled to a ratable share of the net assets of the Company remaining after payments to creditors of the Company. The holders of shares of common stock are entitled to one vote per share for the election of each director nominated to the Board and one vote per share on all other matters submitted to a vote of stockholders. The Company’s amended and restated certificate of incorporation authorizes the Company to issue 40,000,000 shares of common stock with a par value of $0.001 per share. Sales of Common Stock On January 13, 2020, the Company entered into a Capital on Demand™ Sales Agreement with JonesTrading, as sales agent, pursuant to which Monopar could offer and sell (at its discretion), from time to time, through or to JonesTrading shares of Monopar’s common stock, having an aggregate offering price of up to $19.7 million. Pursuant to this agreement, during the nine months ended September 30, 2020, the Company sold 860,677 shares of its common stock at an average gross price per share of $9.79 for net proceeds of $8,175,290, after fees and commissions of $253,036. Also pursuant to this agreement, during the nine months ended September 30, 2021, the Company sold 1,104,047 shares of its common stock at an average gross price per share of $10.20 for net proceeds of $10,925,311 after fees and commissions of $338,153. In aggregate pursuant to this agreement, the Company sold 1,964,724 shares of its common stock at an average gross price per share of $10.02 for net proceeds of $19,100,602, after fees and commissions of $591,188. The maximum aggregate offering price under the agreement has been reached and the Company does not expect further sales under this agreement. As of September 30, 2021, the Company had 12,590,612 shares of common stock issued and outstanding. |
Stock Incentive Plan
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2021 | |
Stock Incentive Plan | |
Note 4. Stock Incentive Plan | Note 4 - Stock Incentive Plan In April 2016, the Company’s Board of Directors and stockholders representing a majority of the Company’s outstanding stock at that time, approved the Monopar Therapeutics Inc. 2016 Stock Incentive Plan, as amended (the “Plan”), allowing the Company to grant up to an aggregate 700,000 shares of stock-based awards in the form of stock options, restricted stock units, stock appreciation rights and other stock-based awards to employees, non-employee directors and consultants. In October 2017, the Company’s Board of Directors voted to increase the stock award pool to 1,600,000 shares of common stock, which subsequently was approved by the Company’s stockholders. In April 2020, the Company’s Board of Directors voted to increase the stock award pool to 3,100,000 (an increase of 1,500,000 shares of common stock), which was approved by the Company’s stockholders in June 2020. In April 2021, the Company’s Board of Directors voted to approve an amendment to the 2016 Stock Incentive Plan to remove certain individual award limits and other provisions related to I.R.C. Section 162(m) and to update the limit on Incentive Stock Options to no more that 100% of the maximum aggregate number of shares which may be granted under the plan, which was approved by the Company’s stockholders in June 2021. During the three months ended September 30, 2021, the Company’s Plan Administrator Committee (with regards to non-officer employees and consultants) and the Company’s Compensation Committee, as ratified by the Board of Directors (in the case of executive officers and non-employee directors), granted to one executive officer and one non-officer employee aggregate stock options for the purchase of 99,000 shares of the Company’s common stock with exercise prices ranging from $4.90 to $5.59 which vest over four years. All stock option grants have a 10-year term. Under the Plan, the per share exercise price for the shares to be issued upon exercise of an option shall be determined by the Plan Administrator, except that the per share exercise price shall be no less than 100% of the fair market value per share on the grant date. Fair market value is the Company’s closing price on Nasdaq. Stock options generally expire after 10 years. Stock option activity under the Plan was as follows: Options Outstanding Number of Shares Subject to Options Weighted-Average Exercise Price Balances at January 1, 2020 1,087,463 $ 2.94 Granted 174,357 14.08 Forfeited (3,243 ) 8.47 Balances at December 31, 2020 1,258,577 4.47 Granted (1) 400,476 6.29 Forfeited (2) (17,906 ) 9.33 Exercised (2,913 ) 6.00 Balances at September 30, 2021 1,638,234 4.86 Unvested options outstanding expected to vest (3) 408,473 7.40 (1) 400,476 options vest as follows: options to purchase 372,704 shares of the Company’s common stock vest 6/48ths on the six-month anniversary of grant date and 1/48th per month thereafter; options to purchase 17,772 shares of the Company’s common stock vest quarterly over one year; and options to purchase 10,000 shares of the Company’s common stock vest monthly over one year. Exercise prices range from $4.90 to $9.67 per share. (2) Forfeited options represent unvested shares and vested, expired shares related to employee terminations. (3) Estimated forfeitures only include known forfeitures to-date as the Company typically accounts for forfeitures as they occur due to a limited history of forfeitures. A summary of options outstanding as of September 30, 2021, is shown below: Exercise Prices Number of Shares Subject to Options Outstanding Weighted-Average Remaining Contractual Term in Years Number of Shares Subject to Options Fully Vested and Exercisable Weighted-Average Remaining Contractual Term in Years $0.001-$5.00 564,920 5.04 555,920 4.96 $5.01-$10.00 916,957 7.95 479,624 7.01 $10.01-$15.00 145,232 8.34 94,509 8.34 $15.01-$20.00 11,125 8.31 8,208 8.32 1,638,234 6.98 1,138,261 6.13 Restricted stock unit activity under the Plan was as follows: Restricted Stock Units Weighted-Average Grant Date Fair Value per Unit Unvested balance at January 1, 2020 — $ — Granted 45,722 12.93 Vested (5,156 ) 12.93 Forfeited (500 ) 12.93 Unvested balance at January 1, 2021 40,066 12.93 Granted 124,374 6.81 Vested (39,824 ) 8.35 Forfeited (1,843 ) 8.06 Unvested Balance at September 30, 2021 122,773 8.29 During the three months ended September 30, 2021, and 2020, the Company recognized $140,501 and $163,807 of employee and non-employee director stock-based compensation expense as general and administrative expenses, respectively, and $241,263 and $102,346 as research and development expenses, respectively. During the nine months ended September 30, 2021, and 2020, the Company recognized $422,360 and $633,462, respectively, of employee and non-employee director stock-based compensation expense as general and administrative expenses and $664,630 and $303,415, respectively, as research and development expenses. The stock-based compensation expense is allocated on a departmental basis, based on the classification of the stock-based award holder. No income tax benefits have been recognized in the condensed consolidated statements of operations and comprehensive loss for stock-based compensation arrangements. The Company recognizes as an expense the fair value of options granted to persons (currently consultants) who are neither employees nor non-employee directors. Stock-based compensation expense for consultants, recorded as research and development expense for the three months ended September 30, 2021, and 2020, was $10,300 and $17,560, respectively, and for the nine months ended September 30, 2021, and 2020, was $30,900 and $52,691, respectively. The fair value of options granted from inception to September 30, 2021, was based on the Black-Scholes option-pricing model assuming the following factors: 4.7 to 6.2 years expected term, 55% to 85% volatility, 0.4% to 2.9% risk free interest rate and zero dividends. The expected term for options granted to-date was estimated using the simplified method. Stock option grants and fair values under the Plan was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Stock options granted 99,000 7,000 400,476 174,357 Weighted-average grant date fair value per share $ 3.96 $ 3.87 $ 4.48 $ 7.78 Fair value of shares vested $ 280,883 $ 315,516 $ 838,901 $ 908,129 At September 30, 2021, the aggregate intrinsic value of outstanding vested stock options was approximately $2.7 million (unvested stock options had zero intrinsic value), and the weighted-average exercise price in aggregate was $4.86 which includes $3.88 for fully vested stock options and $7.40 for stock options expected to vest. At September 30, 2021, unamortized unvested balance of stock-based compensation was $2.9 million, to be amortized over 2.7 years. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions | |
Note 5. Related Party Transactions | Note 5 - Related Party Transactions As of September 30, 2021, Tactic Pharma, LLC (“Tactic Pharma”), the Company’s initial investor, beneficially owned 34.0% of Monopar’s common stock and during the three and nine months ended September 30, 2021, there were no transactions between Tactic Pharma and Monopar. None of the related parties discussed in this paragraph received compensation other than market-rate salary, market-rate stock-based compensation and benefits and performance-based bonus or in the case of non-employee directors, market-rate Board fees and market-rate stock-based compensation. The Company considers the following individuals as related parties: Three of the Company’s board members were also Managing Members of Tactic Pharma as of September 30, 2021. Chandler D. Robinson is the Company’s Co-Founder, Chief Executive Officer, common stockholder, Managing Member of Tactic Pharma, former Manager of the predecessor LLC, Manager of CDR Pharma, LLC and Board member of Monopar as a C Corporation. Andrew P. Mazar is the Company’s Co-Founder, Executive Vice President of Research and Development, Chief Scientific Officer, common stockholder, Managing Member of Tactic Pharma, former Manager of the predecessor LLC and Board member of Monopar as a C Corporation. Michael Brown is a Managing Member of Tactic Pharma (as of February 1, 2019, with no voting power as it relates to Monopar), a previous managing member of Monopar as an LLC, common stockholder and Board member of Monopar as a C Corporation. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
Note 6. Commitments and Contingencies | Note 6 – Commitments and Contingencies License, Development and Collaboration Agreements Onxeo S.A. In June 2016, the Company executed an option and license agreement with Onxeo S.A. (“Onxeo”), a public French company, which gave Monopar the exclusive option to license (on a world-wide exclusive basis) Validive to pursue treating severe oral mucositis in patients undergoing chemoradiation treatment for head and neck cancers. The pre-negotiated Onxeo license agreement for Validive as part of the option agreement includes clinical, regulatory, developmental and sales milestones that could reach up to $108 million if the Company achieves all milestones, and escalating royalties on net sales from 5% to 10%. On September 8, 2017, the Company exercised the license option, and therefore paid Onxeo the $1 million fee under the option and license agreement. Under the agreement, the Company is required to pay royalties to Onxeo on a product-by-product and country-by-country basis until the later of (1) the date when a given product is no longer within the scope of a patent claim in the country of sale or manufacture, (2) the expiry of any extended exclusivity period in the relevant country (such as orphan drug exclusivity, pediatric exclusivity, new chemical entity exclusivity, or other exclusivity granted beyond the expiry of the relevant patent), or (3) a specific time period after the first commercial sale of the product in such country. In most countries, including the U.S., the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country, not taking into consideration any potential patent term adjustment that may be filed in the future or any regulatory extensions that may be obtained. The royalty termination provision pursuant to (3) described above is shorter than 20 years and is the least likely cause of termination of royalty payments. The Onxeo license agreement does not have a pre-determined term, but expires on a product-by-product and country-by-country basis; that is, the agreement expires with respect to a given product in a given country whenever the Company’s royalty payment obligations with respect to such product have expired. The agreement may also be terminated early for cause if either the Company or Onxeo materially breach the agreement, or if either the Company or Onxeo become insolvent. The Company may also choose to terminate the agreement, either in its entirety or as to a certain product and a certain country, by providing Onxeo with advance notice. The Company is internally developing Validive and has activated clinical sites and begun patient dosing for its VOICE clinical trial, which, if successful, may allow the Company to apply for marketing approval within the next several years. The Company will need to raise significant funds or enter into a collaboration partnership to support the further development, including potential commercialization of Validive. As of September 30, 2021, the Company had not reached any of the pre-specified milestones and has not been required to pay Onxeo any funds under this license agreement other than the $1 million one-time license fee. Grupo Español de Investigación en Sarcomas (“GEIS”) In June 2019, the Company executed a clinical collaboration agreement with GEIS for the development of camsirubicin in patients with advanced soft tissue sarcoma (“ASTS”). Following completion of the Phase 1b clinical trial in the U.S. that Monopar initiated in the third quarter of 2021 with the first patient dosed in October 2021, the Company continues to expect that GEIS will sponsor and lead a multi-country, randomized, open-label Phase 2 clinical trial to evaluate camsirubicin head-to-head against doxorubicin, the current first-line treatment for ASTS. The Company will provide study drug and supplemental financial support for the clinical trial estimated to average approximately $2 million to $3 million per year. During the three and nine months ended September 30, 2021, in preparation for the Phase 1b clinical trial, the Company incurred $0.3 million and $1.0 million, respectively, in expenses including clinical material manufacturing-related costs and database management expenses. During the three and nine months ended September 30, 2020, the Company incurred $0.4 million and $0.6 million, respectively, in expenses under the GEIS agreement and other clinical-related expenses including clinical material manufacturing-related costs and database management expenses. The Company can terminate the agreement by providing GEIS with advance notice, and without affecting the Company’s rights and ownership to any related intellectual property or clinical data. XOMA Ltd. The intellectual property rights contributed by Tactic Pharma to the Company included the non-exclusive license agreement with XOMA Ltd. for the humanization technology used in the development of MNPR-101. Pursuant to such license agreement, the Company is obligated to pay XOMA Ltd. clinical, regulatory and sales milestones for MNPR-101 that could reach up to $14.925 million if the Company achieves all milestones. The agreement does not require the payment of sales royalties. There can be no assurance that the Company will reach any milestones under the XOMA agreement. As of September 30, 2021, the Company had not reached any milestones and has not been required to pay XOMA Ltd. any funds under this license agreement. Operating Leases The Company is currently leasing office space for its executive headquarters at 1000 Skokie Blvd., in the Village of Wilmette, Illinois for $4,487 per month on a month-to-month basis. During the three months ended September 30, 2021, and 2020, the Company recognized operating lease expenses of $13,466 and $13,462, respectively. During the nine months ended September 30, 2021, and 2020, the Company recognized operating lease expenses of $41,499 and $41,565, respectively. Legal Contingencies The Company may be subject to claims and assessments from time to time in the ordinary course of business. No claims have been asserted to date. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claims nor been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of future claims against these indemnification obligations. In accordance with its second amended and restated certificate of incorporation, amended and restated bylaws and the indemnification agreements entered into with each officer and non-employee director, the Company has indemnification obligations to its officers and non-employee directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacities. There have been no indemnification claims to date. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Significant Accounting Policies | |
Basis of Presentation | These condensed consolidated financial statements include the financial results of Monopar Therapeutics Inc., its wholly-owned French subsidiary, Monopar Therapeutics, SARL, and its wholly-owned Australian subsidiary, Monopar Therapeutics Australia Pty Ltd and have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all disclosures required by GAAP for financial reporting. All intercompany accounts have been eliminated. The principal accounting policies applied in the preparation of these condensed consolidated financial statements are set out below and have been consistently applied in all periods presented. The Company has been primarily involved in performing research activities, developing product candidates, and raising capital to support and expand these activities. The accompanying unaudited condensed consolidated financial statements contain all normal, recurring adjustments necessary to present fairly the Company’s condensed consolidated financial position as of September 30, 2021, the Company’s condensed consolidated results of operations and comprehensive loss for the three and nine months ended September 30, 2021, and 2020, and the Company’s condensed consolidated cash flows for the nine months ended September 30, 2021, and 2020. The condensed consolidated results of operations and comprehensive loss and condensed consolidated cash flows for the periods presented are not necessarily indicative of the consolidated results of operations or cash flows which may be reported for the remainder of 2021 or for any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2021. |
Functional Currency | The Company's consolidated functional currency is the U.S. Dollar. The Company's Australian subsidiary and French subsidiary use the Australian Dollar and European Euro, respectively, as their functional currency. At each quarter-end, each foreign subsidiary's balance sheets are translated into U.S. Dollars based upon the quarter-end exchange rate, while their statements of operations and comprehensive loss and statements of cash flows are translated into U.S. Dollars based upon an average exchange rate during the period. |
Comprehensive Loss | Comprehensive loss represents net loss plus any gains or losses not reported in the condensed consolidated statements of operations and comprehensive loss, such as foreign currency translations gains and losses that are typically reflected on the Company’s condensed consolidated statements of stockholders’ equity. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Going Concern Assessment | The Company applies Accounting Standards Codification 205-40 (“ASC 205-40”), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Cash Equivalents | The Company considers all highly liquid investments purchased with a maturity of 90 days or less on the date of purchase to be cash equivalents. Cash equivalents as of September 30, 2021, and December 31, 2020, consisted of one money market account. |
Deferred Offering Costs | Deferred offering costs represent legal, auditing, travel and filing fees related to fundraising efforts that have not yet been concluded. There were no deferred offering costs on the Balance Sheets as of September 30, 2021, and December 31, 2020 |
Prepaid Expenses | Prepayments are expenditures for goods or services before the goods are used or the services are received and are charged to operations as the benefits are realized. Prepaid expenses may include payments to development collaborators in excess of actual expenses incurred by the collaborator, measured at the end of each reporting period. Prepayments also include insurance premiums, dues and subscriptions and software costs of $10,000 or more per year that are expensed monthly over the life of the contract, which is typically one year. Prepaid expenses are reflected on the Company’s condensed consolidated balance sheets as other current assets. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company maintains cash and cash equivalents at two reputable financial institutions. As of September 30, 2021, the balance at one financial institution was in excess of the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurable limit. The Company has not experienced any losses on its deposits since inception and management believes the Company is not exposed to significant risks with respect to these financial institutions. |
Fair Value of Financial Instruments | For financial instruments consisting of cash and cash equivalents, accounts payable, accrued expenses, and other current liabilities, the carrying amounts are reasonable estimates of fair value due to their relatively short maturities. The Company adopted ASC 820, Fair Value Measurements and Disclosures, The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources. Unobservable inputs reflect a reporting entity’s pricing an asset or liability developed based on the best information available under the circumstances. The fair value hierarchy consists of the following three levels: Level 1 Level 2 Level 3 Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2 or 3 of the fair value hierarchy during the three and nine months ended September 30, 2021, and 2020. The following table presents the assets and liabilities recorded that are reported at fair value on our condensed consolidated balance sheets on a recurring basis. No values were recorded in Level 2 or Level 3 at September 30, 2021, and December 31, 2020. Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2021 Level 1 Total Assets Cash equivalents (1) $ 21,983,680 $ 21,983,680 Total $ 21,983,680 $ 21,983,680 December 31, 2020 Level 1 Total Assets Cash equivalents (1) $ 16,605,682 $ 16,605,682 Total $ 16,605,682 $ 16,605,682 (1) Cash equivalents represent the fair value of the Company’s investment in a money market account. |
Net Loss per Share | Net loss per share for the three and nine months ended September 30, 2021, and 2020 is calculated by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted net loss per share for the three and nine months ended September 30, 2021, and 2020 is calculated by dividing net loss by the weighted-average shares of the sum of a) weighted average common stock outstanding (12,582,728 and 11,116,409 shares for the three months ended September 30, 2021, and 2020, respectively, and 12,432,318 and 10,792,413 shares for the nine months ended September 30, 2021, and 2020, respectively) and b) potentially dilutive shares of common stock (such as stock options and restricted stock units) outstanding during the period. As of September 30, 2021, and 2020, potentially dilutive securities included stock-based awards to purchase up to 1,761,007 and 1,303,674 shares of the Company’s common stock, respectively. For the three and nine months ended September 30, 2021, and 2020, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive. |
Research and Development Expenses | Research and development (“R&D”) costs are expensed as incurred. Major components of R&D expenses include salaries and benefits paid to the Company’s R&D staff, compensation expenses of G&A personnel performing R&D, fees paid to consultants and to the entities that conduct certain R&D activities on the Company’s behalf and materials and supplies which were used in R&D activities during the reporting period. |
Clinical Trial Expense | The Company accrues and expenses the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations, service providers, and clinical trial sites. The Company estimates the amounts to accrue based upon discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as R&D expenses. Clinical trial site costs related to patient screening and enrollment are accrued as patients are screened/entered into the trial. |
Collaborative Arrangements | The Company and its collaborative partners are active participants in collaborative agreements and all parties would be exposed to significant risks and rewards depending on the technical and commercial success of the activities. Contractual payments to the other parties in collaboration agreements and costs incurred by the Company when the Company is deemed to be the principal participant for a given transaction are recognized on a gross basis in R&D expenses. Royalties and license payments are recorded as earned. During the three and nine months ended September 30, 2021, and 2020, no milestones were met, and no royalties were earned, therefore, the Company did not pay or accrue/expense any license or royalty payments. |
Licensing Agreements | The Company has various agreements licensing technology utilized in the development of its product or technology programs. The licenses contain success milestone obligations and royalties on future sales. During the three and nine months ended September 30, 2021, and 2020, no milestones were met, and no royalties were earned, therefore, the Company did not pay or accrue/expense any license or royalty payments under any of its license agreements. |
Patent Costs | The Company expenses costs relating to issued patents and patent applications, including costs relating to legal, renewal and application fees, as a component of general and administrative expenses in its condensed consolidated statements of operations and comprehensive loss. |
Income Taxes | The Company uses an asset and liability approach for accounting for deferred income taxes, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements but have not been reflected in its taxable income. Estimates and judgments are required in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. The Company regularly assesses the likelihood that its deferred income tax assets will be realized from recoverable income taxes or recovered from future taxable income. To the extent that the Company believes any amounts are not “more likely than not” to be realized, the Company records a valuation allowance to reduce the deferred income tax assets. In the event the Company determines that all or part of the net deferred tax assets are not realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. Similarly, if the Company subsequently determines deferred income tax assets that were previously determined to be unrealizable are now realizable, the respective valuation allowance would be reversed, resulting in an adjustment to earnings in the period such determination is made. Internal Revenue Code Sections 382 and 383 (“Sections 382 and 383”) limit the use of net operating loss (“NOL”) carryforwards and R&D credits, after an ownership change. To date, the Company has not conducted a Section 382 or 383 study, however, because the Company will continue to raise significant amounts of equity in the coming years, the Company expects that Sections 382 and 383 will limit the Company’s usage of NOLs and R&D credits in the future. ASC 740, Income Taxes The Company is subject to U.S. Federal, Illinois and California income taxes. In addition, the Company is subject to local tax laws of France and Australia. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company was incorporated on December 16, 2015, and is subject to U.S. Federal, state and local tax examinations by tax authorities for the tax years 2015 through 2020. The Company does not anticipate significant changes to its current uncertain tax positions through September 30, 2021. The Company filed its U.S. Federal and state tax returns for the year ended December 31, 2020, prior to the extended filing deadlines in all jurisdictions. |
Stock-Based Compensation | The Company accounts for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based awards, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs. Stock-based compensation expense for awards granted to employees, non-employee directors and consultants are based on the fair value of the underlying instrument calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating the future stock price volatility, forfeiture rates and expected terms. The expected volatility rates are estimated based on the actual volatility of comparable public companies over recent historical periods of the same length as the expected term. The Company selected these companies based on reasonably comparable characteristics, including market capitalization, stage of corporate development and with historical share price information sufficient to meet the expected term (life) of the stock-based awards. The expected term for options granted to date is estimated using the simplified method. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying a cash dividend in the future vesting period and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Significant Accounting Policies | |
Assets and liabilities measured at fair value on a recurring basis | September 30, 2021 Level 1 Total Assets Cash equivalents (1) $ 21,983,680 $ 21,983,680 Total $ 21,983,680 $ 21,983,680 December 31, 2020 Level 1 Total Assets Cash equivalents (1) $ 16,605,682 $ 16,605,682 Total $ 16,605,682 $ 16,605,682 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stock Incentive Plan | |
Stock option activity | Options Outstanding Number of Shares Subject to Options Weighted-Average Exercise Price Balances at January 1, 2020 1,087,463 $ 2.94 Granted 174,357 14.08 Forfeited (3,243 ) 8.47 Balances at December 31, 2020 1,258,577 4.47 Granted (1) 400,476 6.29 Forfeited (2) (17,906 ) 9.33 Exercised (2,913 ) 6.00 Balances at September 30, 2021 1,638,234 4.86 Unvested options outstanding expected to vest (3) 408,473 7.40 |
Options outstanding | Exercise Prices Number of Shares Subject to Options Outstanding Weighted-Average Remaining Contractual Term in Years Number of Shares Subject to Options Fully Vested and Exercisable Weighted-Average Remaining Contractual Term in Years $0.001-$5.00 564,920 5.04 555,920 4.96 $5.01-$10.00 916,957 7.95 479,624 7.01 $10.01-$15.00 145,232 8.34 94,509 8.34 $15.01-$20.00 11,125 8.31 8,208 8.32 1,638,234 6.98 1,138,261 6.13 |
Restricted stock unit activity | Restricted Stock Units Weighted-Average Grant Date Fair Value per Unit Unvested balance at January 1, 2020 — $ — Granted 45,722 12.93 Vested (5,156 ) 12.93 Forfeited (500 ) 12.93 Unvested balance at January 1, 2021 40,066 12.93 Granted 124,374 6.81 Vested (39,824 ) 8.35 Forfeited (1,843 ) 8.06 Unvested Balance at September 30, 2021 122,773 8.29 |
Schedule of stock option grants and fair values | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Stock options granted 99,000 7,000 400,476 174,357 Weighted-average grant date fair value per share $ 3.96 $ 3.87 $ 4.48 $ 7.78 Fair value of shares vested $ 280,883 $ 315,516 $ 838,901 $ 908,129 |
Nature of Business and Liquid_2
Nature of Business and Liquidity (Details Narrative) $ in Millions | Sep. 30, 2021USD ($) |
Nature of Business and Liquidity | |
Accumulated deficit | $ (38.6) |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash equivalents | $ 21,983,680 | $ 16,605,682 |
Total | 21,983,680 | 16,605,682 |
Level 1 | ||
Assets | ||
Cash equivalents | 21,983,680 | 16,605,682 |
Total | $ 21,983,680 | $ 16,605,682 |
Significant Accounting Polici_5
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Significant Accounting Policies | ||||
Insurance premiums, dues, subscription, and software cost paid in advance | $ 10,000 | $ 10,000 | ||
FDIC insurable limit | $ 250,000 | $ 250,000 | ||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 12,582,728 | 11,116,409 | 12,432,318 | 10,792,413 |
Potentially dilutive securities | 1,761,007 | 1,303,674 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | 9 Months Ended | 21 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Fees and commissions | $ 591,188 | |||
Proceeds from sale of stock | $ 19,100,602 | |||
Average gross price per share | $ 10.02 | |||
Sale of common stock shares | 1,964,724 | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, authorized | 40,000,000 | 40,000,000 | 40,000,000 | |
Common stock, issued | 12,590,612 | 12,590,612 | 11,453,465 | |
Common stock, outstanding | 12,590,612 | 12,590,612 | 11,453,465 | |
Common stock aggregate offering price description | up to $19.7 million | |||
Sales Agreement | ||||
Fees and commissions | $ 338,153 | $ 253,036 | ||
Proceeds from sale of stock | $ 10,925,311 | $ 8,175,290 | ||
Average gross price per share | $ 10.20 | $ 9.79 | ||
Sale of common stock shares | 1,104,047 | 860,677 |
Stock Incentive Plan (Details)
Stock Incentive Plan (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Stock Incentive Plan | ||
Stock options outstanding, beginning | 1,258,577 | 1,087,463 |
Stock options, granted | 400,476 | 174,357 |
Stock options, forfeited | (17,906) | (3,243) |
Stock options, exercised | (2,913) | |
Stock options outstanding, ending | 1,638,234 | 1,258,577 |
Unvested options outstanding expected to vest | 408,473 | |
Weighted average exercise price outstanding, beginning | $ 4.47 | $ 2.94 |
Weighted average exercise price, granted | 6.29 | 14.08 |
Weighted average exercise price, forfeited | 9.33 | 8.47 |
Weighted average exercise price, exercised | 6 | |
Weighted average exercise price outstanding, ending | 4.86 | $ 4.47 |
Weighted-Average Exercise Price unvested options outstanding expected to vest | $ 7.40 |
Stock Incentive Plan (Details 1
Stock Incentive Plan (Details 1) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of shares fully vested and exercisable | 1,138,261 |
Number of Shares Subject to Options Outstanding | 1,638,234 |
Options outstanding Contractual Term in Years | 6 years 11 months 23 days |
Options fully vested and exercisable Contractual Term in Years | 6 years 1 month 17 days |
Option 3 | |
Number of shares fully vested and exercisable | 94,509 |
Number of Shares Subject to Options Outstanding | 145,232 |
Options outstanding Contractual Term in Years | 8 years 4 months 2 days |
Options fully vested and exercisable Contractual Term in Years | 8 years 4 months 2 days |
Option 3 | Maximum Member | |
Exercise price | $ / shares | $ 15 |
Option 3 | Minimum Member | |
Exercise price | $ / shares | $ 10.01 |
Option 4 | |
Number of shares fully vested and exercisable | 8,208 |
Number of Shares Subject to Options Outstanding | 11,125 |
Options outstanding Contractual Term in Years | 8 years 3 months 21 days |
Options fully vested and exercisable Contractual Term in Years | 8 years 3 months 25 days |
Option 4 | Maximum Member | |
Exercise price | $ / shares | $ 20 |
Option 4 | Minimum Member | |
Exercise price | $ / shares | $ 15.01 |
Option 2 | |
Number of shares fully vested and exercisable | 479,624 |
Number of Shares Subject to Options Outstanding | 916,957 |
Options outstanding Contractual Term in Years | 7 years 11 months 12 days |
Options fully vested and exercisable Contractual Term in Years | 7 years 3 days |
Option 2 | Maximum Member | |
Exercise price | $ / shares | $ 10 |
Option 2 | Minimum Member | |
Exercise price | $ / shares | $ 5.01 |
Option 1 | |
Number of shares fully vested and exercisable | 555,920 |
Number of Shares Subject to Options Outstanding | 564,920 |
Options outstanding Contractual Term in Years | 5 years 14 days |
Options fully vested and exercisable Contractual Term in Years | 4 years 11 months 15 days |
Option 1 | Maximum Member | |
Exercise price | $ / shares | $ 5 |
Option 1 | Minimum Member | |
Exercise price | $ / shares | $ 0.001 |
Stock Incentive Plan (Details 2
Stock Incentive Plan (Details 2) - Restricted Stock Units - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Unvested restricted stock units outstanding, beginning | 40,066 | 0 |
Unvested restricted stock units, granted | 124,374 | 45,722 |
Unvested restricted stock units, vested | 39,824 | 5,156 |
Unvested restricted stock units, forfeited | 1,843 | 500 |
Unvested restricted stock units outstanding, ending | 122,773 | 40,066 |
Weighted-average grant date fair value per unit, granted | $ 6.81 | $ 12.93 |
Weighted-average grant date fair value per unit, vested | 8.35 | 12.93 |
Weighted-average grant date fair value per unit, forfeited | 8.06 | 12.93 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 8.29 | $ 12.93 |
Stock Incentive Plan (Details 3
Stock Incentive Plan (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Incentive Plan | ||||
Stock options granted | 99,000 | 7,000 | 400,476 | 174,357 |
Weighted-average grant date fair value per share | $ 3.96 | $ 3.87 | $ 4.48 | $ 7.78 |
Fair value of shares vested | $ 280,883 | $ 315,516 | $ 838,901 | $ 908,129 |
Stock Incentive Plan (Details N
Stock Incentive Plan (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 66 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Jun. 30, 2020 | Apr. 30, 2016 | |
Unvested stock options intrinsic value | $ 0 | ||||||
Stock options outstanding | $ 2,700,000 | $ 2,700,000 | $ 2,700,000 | ||||
Weighted-average exercise price | $ 4.86 | $ 4.86 | $ 4.86 | ||||
Unamortized unvested balance of stock base compensation | $ 2,900,000 | $ 2,900,000 | $ 2,900,000 | ||||
Unamortized unvested balance of stock base compensation, period | 2 years 8 months 12 days | ||||||
Weighted average exercise price of unvested expected to vest share | $ 7.40 | $ 7.40 | $ 7.40 | ||||
Description of exercise price | Exercise prices range from $4.90 to $9.67 per share. | ||||||
Weighted average vested exercise price | $ 3.88 | $ 3.88 | $ 3.88 | ||||
Stock Option Granted | 99,000 | 400,476 | |||||
Stock-based compensation expense for non-employees | $ 10,300 | $ 17,560 | $ 30,900 | $ 52,691 | |||
Employee and non-employee director stock-based compensation expense | 1,117,890 | 989,568 | |||||
General and Administrative Expenses | |||||||
Employee and non-employee director stock-based compensation expense | 140,501 | 163,807 | 422,360 | 633,462 | |||
Research and Development Expenses | |||||||
Employee and non-employee director stock-based compensation expense | $ 241,263 | $ 102,346 | $ 664,630 | $ 303,415 | |||
Maximum Member | |||||||
Risk free interest rate | 2.90% | ||||||
Expected term | 6 years 2 months 12 days | ||||||
Volatility | 85.00% | ||||||
Minimum Member | |||||||
Risk free interest rate | 0.40% | ||||||
Expected term | 4 years 8 months 12 days | ||||||
Volatility | 55.00% | ||||||
Stock award pool [Member] | |||||||
Share based compensation arrangement by share based payment award number of additional shares authorized | 1,500,000 | ||||||
2016 Stock Incentive Plan | |||||||
Share based compensation arrangement by share based payment award number of shares authorized | 700,000 | ||||||
Stock option grants term period | 10 years | ||||||
Aggregate stock option purchase of shares | 99,000 | ||||||
2016 Stock Incentive Plan | Maximum Member | |||||||
Exercise price | $ 5.59 | $ 5.59 | $ 5.59 | ||||
2016 Stock Incentive Plan | Minimum Member | |||||||
Exercise price | $ 4.90 | $ 4.90 | $ 4.90 | ||||
April 2020 | Board of Directors | |||||||
Share based compensation arrangement by share based payment award number of shares authorized | 3,100,000 | 3,100,000 | 3,100,000 | ||||
October 2017 | Board of Directors | |||||||
Share based compensation arrangement by share based payment award number of shares authorized | 1,600,000 | 1,600,000 | 1,600,000 | ||||
Vested 6/48ths on 6 month anniversary of grant date and 1/48th per month thereafter | |||||||
Option to purchase shares | 372,704 | ||||||
Vested quarterly over one year | |||||||
Option to purchase shares | 17,772 | ||||||
Vested monthly over one year | |||||||
Option to purchase shares | 10,000 | ||||||
Options [Member] | |||||||
Stock Option Granted | 400,476 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 9 Months Ended |
Sep. 30, 2021 | |
Tactic Pharma LLC | |
Beneficial ownership | 34.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating lease expense | $ 13,466 | $ 13,462 | $ 41,499 | $ 41,565 |
Description of study drug and supplemental financial support | The Company will provide study drug and supplemental financial support for the clinical trial estimated to average approximately $2 million to $3 million per year. | |||
Operating lease monthly payment | $ 4,487 | |||
XOMA Ltd | ||||
Option and license agreement description | that could reach up to $14.925 million if the Company achieves all milestones | |||
GEIS | ||||
Clinical-related expenses | $ 300,000 | $ 400,000 | $ 1,000,000 | $ 600,000 |
Onxeo S.A | ||||
Option and license agreement description | the option agreement includes clinical, regulatory, developmental and sales milestones that could reach up to $108 million if the Company achieves all milestones, and escalating royalties on net sales from 5% to 10%. | |||
Option and license agreement fee | $ 1,000,000 |