QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(
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(Registrant’s telephone number)
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(Former name, former address and former fiscal year, if changed since last report)
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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller Reporting Company
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Emerging growth company
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Page
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Part I — Financial Information
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Item 1.
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Financial Statements (Unaudited):
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3 |
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4 |
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5 |
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6 |
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7
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Item 2.
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15
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Item 3.
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26
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Item 4.
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26
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Part II — Other Information
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26 |
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Item 1.
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26
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Item 1A.
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26
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Item 2.
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27 | ||
Item 3.
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27
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Item 4.
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27 | ||
Item 5.
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27
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Item 6.
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27
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28 |
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29
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PART 1.
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FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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March 31, 2022
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December 31, 2021
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|||||||
ASSETS
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(unaudited)
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|||||||
Current assets:
|
||||||||
Cash and cash equivalents
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$
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$
|
|
||||
Prepaid expenses and other
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||||||
Total current assets
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||||||
Property and equipment, net
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||||||
Operating lease right-to-use asset
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Total assets
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$
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$
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$
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$
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||||
Accrued expenses
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||||||
Operating lease obligation-short term
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||||||
Total current liabilities
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||||||
Noncurrent liability:
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Operating lease obligation-long term
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Total liabilities:
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$
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$
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||||
STOCKHOLDERS’ EQUITY
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||||||||
Common stock, $
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||||||
Additional paid-in capital
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||||||
Accumulated deficit
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(
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)
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(
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)
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||||
Total stockholders’ equity
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||||||
Total liabilities and stockholders’ equity
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$
|
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$
|
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Three Months Ended March 31,
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||||||||
2022
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2021
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|||||||
Operating expenses:
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||||||||
Research and development expenses
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$
|
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$
|
|
||||
General and administrative expenses
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|
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||||||
Total operating expenses
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||||||
Loss from operations
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(
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)
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(
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)
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||||
Other income
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||||||||
Interest income
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||||||
Net loss and comprehensive loss
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$
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(
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)
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$
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(
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)
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Per share information:
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||||||||
Net loss per share, basic
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$
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(
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)
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$
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(
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)
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Net loss per share, diluted
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$
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(
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)
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$
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(
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)
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Weighted average common shares outstanding, basic
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||||||
Weighted average common shares outstanding, diluted
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Common Stock
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Additional | |||||||||||||||||||
Shares
Issued
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Amount
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Paid-in
Capital
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Accumulated
Deficit
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Total Equity
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||||||||||||||||
Balance - December 31, 2020
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$
|
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$
|
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$
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(
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)
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$
|
|
||||||||||
Stock-based compensation expense
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–
|
|
|
|
|
|||||||||||||||
Issuance of common stock from 401K match
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|
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|||||||||||||||
Net loss
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–
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|
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(
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)
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(
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)
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|||||||||||||
Balance - March 31, 2021
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$
|
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$
|
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$
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(
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)
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$
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Common Stock
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Additional | |||||||||||||||||||
Shares
Issued
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Amount
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Paid-in
Capital
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Accumulated
Deficit
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Total Equity
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||||||||||||||||
Balance - December 31, 2021
|
|
$
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$
|
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$
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(
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)
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$
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||||||||||
Stock-based compensation expense
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–
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|||||||||||||||
Issuance of common stock from exercise of stock options |
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Net loss
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–
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(
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)
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(
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)
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|||||||||||||
Balance - March 31, 2022
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$
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$
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$
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(
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)
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$
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Three Months Ended March 31,
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||||||||
2022
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2021
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|||||||
Cash flows from operating activities:
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||||||||
Net loss
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$
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(
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)
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$
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(
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
Stock-based compensation expense
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||||||
Stock-based 401K company common match
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Depreciation expense
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Operating lease expense
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Changes in assets and liabilities:
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||||||||
Prepaid expenses and other assets
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(
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)
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(
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)
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||||
Accounts payable
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(
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)
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|||||
Accrued expenses
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(
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)
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|||||
Operating lease liabilities
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(
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)
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(
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)
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||||
Net cash used in operating activities
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(
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)
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(
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)
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||||
Cash flows from financing activities:
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||||||||
Proceeds from exercise of stock options
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||||||||
Net cash provided by financing activities
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|||||||
Net decrease in cash and cash equivalents
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(
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)
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(
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)
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||||
Cash and cash equivalents at beginning of period
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||||||
Cash and cash equivalents at end of period
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$
|
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$
|
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(A) |
Unaudited interim financial statements:
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(B) |
Use of estimates:
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(C) |
Significant risks and uncertainties:
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(D) |
Cash equivalents and concentration of cash balance:
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(E) |
Research and development:
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(F) |
Patent costs:
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(G) |
Stock-based compensation:
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(H) |
Net loss per common share:
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As of March 31,
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||||||||
2022
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2021
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|||||||
Stock options to purchase Common Stock
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||||||
Warrants to purchase Common Stock
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Total
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Fair Value Measurements at Reporting Date Using
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||||||||||||||||
Total
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Quoted Prices in
Active Markets
(Level 1)
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Quoted Prices in
Inactive Markets
(Level 2)
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Significant
Unobservable Inputs
(Level 3)
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|||||||||||||
As of March 31, 2022: (unaudited)
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Cash and cash equivalents
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$
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$
|
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$
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$
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||||||||
As of December
31, 2021:
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||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
As of March 31,
|
||||||||
2022
|
2021
|
|||||||
Cash paid for operating lease liabilities
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$
|
|
$
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|
||||
Right-of use assets recorded in exchange for lease obligations
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$
|
|
$
|
|
Year ended December 31,
|
||||
2022 (remaining nine months)
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$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
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|||
2026 and after
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|
|||
Total future minimum lease payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
$
|
|
As of
March 31, 2022
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As of
December 31, 2021
|
|||||||
Accrued research and development
|
$
|
|
$
|
|
||||
Accrued professional fees
|
|
|
||||||
Accrued compensation
|
|
|
||||||
Accrued rent | ||||||||
Total
|
$
|
|
$
|
|
Three Months Ended March 31, |
||||||||
2022
|
2021
|
|||||||
(unaudited) |
||||||||
Stock-Based Compensation | ||||||||
Research and development
|
$ |
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$ |
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||||
General and administrative
|
|
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||||||
Total
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$ |
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$ |
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Three Months Ended March 31,
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||||||||
2022
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2021
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|||||||
Weighted Average
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Weighted Average
|
|||||||
(unaudited)
|
||||||||
Volatility
|
|
%
|
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%
|
||||
Risk-Free Interest Rate
|
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%
|
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%
|
||||
Expected Term in Years
|
|
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||||||
Dividend Rate | % |
% |
||||||
Fair Value of Option on Grant Date
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$
|
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$
|
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Number
of Shares
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Weighted
Average
Exercise Price
|
Weighted Average
Remaining
Contractual
Life in Years
|
Aggregate
Intrinsic Value
|
|||||||||||||
Options outstanding at December 31, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited
|
(
|
)
|
|
|||||||||||||
Expired
|
|
|
||||||||||||||
Options outstanding at March 31, 2022
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$
|
|
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$
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||||||||||
Vested and expected to vest at March 31, 2022
|
|
$
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|
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$
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||||||||||
Exercisable at March 31, 2022
|
|
$
|
|
|
$
|
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ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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● |
the Company’s ability to protect its intellectual property rights;
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● |
the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans
for future equity financings;
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● |
the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its product candidates, and
the risks that raising such additional capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or product candidates;
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● |
the Company’s limited operating history in the Company’s current line of business, which makes it difficult to evaluate the Company’s prospects, the
Company’s business plan or the likelihood of the Company’s successful implementation of such business plan;
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● |
the timing for the Company or its partners to initiate the planned clinical trials for PDS0101, PDS0103, PDS0203 and other Versamune and
Infectimune based products and the future success of such trials;
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● |
the successful implementation of the Company’s research and development programs and collaborations, including any collaboration studies concerning
PDS0101, PDS0203 and other Versamune and Infectimune based products and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the
Company’s product candidates;
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● |
the success, timing and cost of the Company’s ongoing clinical trials and
anticipated clinical trials for the Company’s current product candidates, including statements regarding the timing of initiation, pace of enrollment and completion of the trials (including our ability to fully fund our disclosed clinical
trials, which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data reported in an abstract, and receipt of interim results (including, without limitation, any preclinical
results or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;
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● |
expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of our product candidates;
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● |
any Company statements about its understanding of product candidates mechanisms of action and interpretation of preclinical and early clinical results
from its clinical development programs and any collaboration studies; the acceptance by the market of the Company’s product candidates, if approved; the timing of and the Company’s ability to obtain and maintain U.S. Food and Drug
Administration or other regulatory authority approval of, or other action with respect to, the Company’s product candidates; and
|
● |
other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances
or other disruptions to normal business operations arising from or related to COVID-19 and those listed under Part II, Item 1A. Risk Factors.
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● |
the timing and costs of our planned clinical trials;
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● |
the timing and costs of our planned preclinical studies of our Versamune® platform;
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● |
the outcome, timing and costs of seeking regulatory approvals;
|
● |
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;
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● |
the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and
enforcement of any patents or patent applications or other intellectual property rights; and
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● |
the extent to which we license or acquire other products and technologies.
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Three Months Ended
March 31,
|
Increase
|
|||||||||||||||
2022
|
2021
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$ Amount
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%
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|||||||||||||
(in thousands)
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development expenses
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$
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5,161
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$
|
1,413
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$
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3,738
|
265
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%
|
||||||||
General and administrative expenses
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3,318
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1,636
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1,682
|
103
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%
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|||||||||||
Total operating expenses
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8,479
|
3,049
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5,430
|
178
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%
|
|||||||||||
Loss from operations
|
(8,479
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)
|
(3,049
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)
|
5,430
|
178
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%
|
|||||||||
Interest income, net
|
6
|
1
|
5
|
500
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%
|
|||||||||||
Net loss and comprehensive loss
|
$
|
(8,473
|
)
|
$
|
(3,048
|
)
|
$
|
5,425
|
178
|
%
|
Three Months Ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Net cash used in operating activities
|
$
|
(6,369
|
)
|
$
|
(3,802
|
)
|
||
Net cash provided by financing activities
|
7
|
–
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(6,362
|
)
|
$
|
(3,802
|
)
|
● |
the initiation, progress, timing, costs and results of our planned clinical trials;
|
● |
the effects of health epidemics, pandemics, or outbreaks of infectious diseases, including the recent COVID-19 pandemic, on our business operations,
financial condition, results of operations and cash flows;
|
● |
the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, the European Medicines
Agency, or EMA, and other comparable foreign regulatory authorities;
|
● |
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
|
● |
the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us now or in the
future;
|
● |
the effect of competing technological and market developments;
|
● |
the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our products on our own; and
|
● |
the initiation, progress, timing and results of our commercialization of our product candidates, if approved, for commercial sale.
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ITEM 3: |
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
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ITEM 4: |
CONTROLS AND PROCEDURES
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PART II. |
OTHER INFORMATION
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ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
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ITEM 6. |
EXHIBITS
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Exhibit
Number
|
Exhibit Description
|
|
Third Amended and Restated Bylaws of PDS Biotechnology Corporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K
filed on March 15, 2022, and incorporated by reference herein).
|
||
10.1+
|
PDS Biotechnology Corporation Change of Control Severance Plan effective as of March 14, 2022 (filed as Exhibit 10.21 to the
Company’s Annual Report on Form 10-K filed on March 31, 2022, and incorporated herein by reference).
|
|
10.2**+
|
Amended and Restated Executive Employment Agreement by and between Frank K. Bedu-Addo and PDS Biotechnology Corporation, effective as
of March 14, 2022 (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on March 31, 2022, and incorporated herein by reference).
|
|
10.3**+
|
Executive Employment Agreement by and between Gregory Conn, Ph.D. and PDS Biotechnology Corporation, effective as of March 14, 2022
(filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed on March 31, 2022, and incorporated herein by reference).
|
|
10.4**+
|
Executive Employment Agreement by and between Matthew Hill and PDS Biotechnology Corporation, effective as of March 14, 2022 (filed
as Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed on March 31, 2022, and incorporated herein by reference).
|
|
10.5**+
|
Executive Employment Agreement by and between Lauren V. Wood, M.D. and PDS Biotechnology Corporation, effective as of March 14, 2022
(filed as Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed on March 31, 2022, and incorporated herein by reference).
|
|
31.1*
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
32.2*
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
* |
Filed herewith (unless otherwise noted as being furnished herewith)
|
+ |
Indicates management contract or compensatory plan.
|
** |
Certain portions of the Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
|
PDS Biotechnology Corporation
|
|||
May 11, 2022
|
By:
|
/s/ Frank Bedu-Addo
|
|
Frank Bedu-Addo
|
|||
President and Chief Executive Officer
(Principal Executive Officer)
|
|||
May 11, 2022
|
By:
|
/s/ Matthew Hill
|
|
Matthew Hill
|
|||
Chief Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|