0001437749-23-013582.txt : 20230510 0001437749-23-013582.hdr.sgml : 20230510 20230510160546 ACCESSION NUMBER: 0001437749-23-013582 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 48 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230510 DATE AS OF CHANGE: 20230510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Moleculin Biotech, Inc. CENTRAL INDEX KEY: 0001659617 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 474671999 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-37758 FILM NUMBER: 23906301 BUSINESS ADDRESS: STREET 1: 5300 MEMORIAL DRIVE STREET 2: SUITE 950 CITY: HOUSTON STATE: TX ZIP: 77007 BUSINESS PHONE: 713-300-5160 MAIL ADDRESS: STREET 1: 5300 MEMORIAL DRIVE STREET 2: SUITE 950 CITY: HOUSTON STATE: TX ZIP: 77007 10-Q 1 mbrx20230331_10q.htm FORM 10-Q mbrx20230331_10q.htm
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 Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended March 31, 2023

or

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

For the transition period from                  to                 

Commission File Number: 001-37758

 

moleculinnewlogoresized.jpg

MOLECULIN BIOTECH, INC.

(Exact name of registrant as specified in its charter)

Delaware

 

2834

 

47-4671997

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(IRS Employer

Identification Number)

 

5300 Memorial Drive, Suite 950

 

Houston, TX

77007

(Address of principal executive offices)

(Zip Code)

 

713-300-5160

(Registrant’s telephone number, including area code)

 

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

 

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

 

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

 

Large accelerated filer ☐

 

Smaller reporting company

Non-accelerated filer

Emerging growth company  

Accelerated filer ☐

  

 

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

 

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

 

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

Title of each class

Trading Symbol (s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

MBRX

The NASDAQ Stock Market LLC

 

The registrant had 29,675,510 shares of common stock outstanding at May 1, 2023.

 

 

 
 

Moleculin Biotech, Inc.

Form 10-Q

Table of Contents

 

   

Page

 

PART I – FINANCIAL INFORMATION

3

     

Item 1.

Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022

3

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2023 and 2022

4

 

Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2023 and 2022

5

 

Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2023 and 2022

6

 

Notes to Condensed Consolidated Financial Statements

7

     

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

12

     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

18

     

Item 4.

Controls and Procedures

18

     
 

PART II – OTHER INFORMATION

18

     

Item 1.

Legal Proceedings

18

     

Item 1A.

Risk Factors

18

     

Item 2.

Unregistered sales of Equity Securities and Uses of Proceeds

18

     

Item 3.

Defaults Upon Senior Securities

18

     

Item 4.

Mine Safety Disclosures

18

     

Item 5.

Other Information

18

     

Item 6.

Exhibits

19

     
 

Signatures

20

 

 

 

PART 1 FINANCIAL INFORMATION

 

Item 1. Financial Statements

Moleculin Biotech, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share data)

(Unaudited)

 

 

  

March 31,

  

December 31,

 
  

2023

  

2022

 

Assets

        

Current assets:

        

Cash and cash equivalents

 $37,265  $43,145 

Prepaid expenses and other current assets

  2,024   2,451 

Total current assets

  39,289   45,596 

Furniture and equipment, net

  244   275 

Intangible assets

  11,148   11,148 

Operating lease right-of-use asset

  381   403 

Total assets

 $51,062  $57,422 
         

Liabilities and Stockholders’ Equity

        

Current liabilities:

        

Accounts payable

 $1,939  $2,095 

Accrued expenses and other current liabilities

  3,093   2,724 

Total current liabilities

  5,032   4,819 

Operating lease liability - long-term, net of current portion

  308   335 

Warrant liability - long-term

  38   77 

Total liabilities

  5,378   5,231 

Commitments and contingencies (Note 6)

          

Stockholders' equity

        

Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding

      

Common stock, $0.001 par value; 100,000,000 shares authorized; 29,600,323 and 28,627,827 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

  30   29 

Additional paid-in capital

  155,396   153,985 

Accumulated other comprehensive income

  8   12 

Accumulated deficit

  (109,750)  (101,835)

Total stockholders’ equity

  45,684   52,191 

Total liabilities and stockholders’ equity

 $51,062  $57,422 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

 

  

Three Months Ended March 31,

 
  

2023

  

2022

 

Revenues

 $  $ 
         

Operating expenses:

        

Research and development

  5,687   4,620 

General and administrative

  2,637   2,422 

Depreciation and amortization

  30   32 

Total operating expenses

  8,354   7,074 

Loss from operations

  (8,354)  (7,074)

Other income:

        

Gain from change in fair value of warrant liability

  39   160 

Other income, net

  8   5 

Interest income, net

  392   42 

Net loss

 $(7,915) $(6,867)
         

Net loss per common share - basic and diluted

 $(0.28) $(0.24)

Weighted average common shares outstanding, basic and diluted

  28,749,974   28,578,338 
         

Net Loss

 $(7,915) $(6,867)

Other comprehensive loss:

        

Foreign currency translation

  (4)  12 

Comprehensive loss

 $(7,919) $(6,855)

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

  

  

Three Months Ended March 31,

 
  

2023

  

2022

 

Cash flows from operating activities:

        

Net loss

 $(7,915) $(6,867)

Adjustments to reconcile net loss to net cash used in operating activities:

        

Depreciation and amortization

  30   32 

Stock-based compensation

  499   527 

License rights expense settled in stock

  772    

Change in fair value of warrant liability

  (39)  (160)

Operating lease, net

  110   90 

Changes in operating assets and liabilities:

        

Prepaid expenses and other current assets

  427   438 

Accounts payable

  (156)  860 

Accrued expenses and other current liabilities

  255   275 

Net cash used in operating activities

  (6,017)  (4,805)

Cash flows from investing activities:

        

Purchase of fixed assets

     (6)

Net cash used in investing activities

     (6)

Cash flows from financing activities:

        

Proceeds from sale of common stock, net of issuance costs

  141    

Net cash provided by financing activities

  141    

Effect of exchange rate changes on cash and cash equivalents

  (4)  12 

Net decrease in cash and cash equivalents

  (5,880)  (4,799)

Cash and cash equivalents, - beginning of period

  43,145   70,903 

Cash and cash equivalents, - end of period

 $37,265  $66,104 
         

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except for shares)

(Unaudited)

 

   

Three Months Ended March 31, 2023

 
      Common Stock                               Accumulated          
   

Shares

   

Par Value Amount

   

Additional Paid-In Capital

   

Accumulated Deficit

   

Other Comprehensive Income (Loss)

   

Total Stockholders' Equity

 

Balance, December 31, 2022

    28,627,827     $ 29     $ 153,985     $ (101,835 )   $ 12     $ 52,191  

Issuance of common stock with equity purchase agreement

    150,381             141                   141  

Common stock issued for license rights

    822,115       1       771                   772  

Stock-based compensation

                499                   499  

Net loss

                      (7,915 )           (7,915 )

Cumulative translation adjustment

                            (4 )     (4 )

Balance, March 31, 2023

    29,600,323     $ 30     $ 155,396     $ (109,750 )   $ 8     $ 45,684  

 

   

Three Months Ended March 31, 2022

 
      Common Stock                               Accumulated          
   

Shares

   

Par Value Amount

   

Additional Paid-In Capital

   

Accumulated Deficit

   

Other Comprehensive Income (Loss)

   

Total Stockholders' Equity

 

Balance, December 31, 2021

    28,578,338     $ 29     $ 151,733     $ (72,810 )   $ 41     $ 78,993  

Stock-based compensation

                527                   527  

Net loss

                      (6,867 )           (6,867 )

Cumulative translation adjustment

                            12       12  

Balance, March 31, 2022

    28,578,338     $ 29     $ 152,260     $ (79,677 )   $ 53     $ 72,665  

 

See accompanying notes to condensed consolidated financial statements.

 

 

Moleculin Biotech, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

 

1. Nature of Business

 

The terms "MBI" or "the Company", "we", "our", and "us" are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015, with clinical programs for hard-to-treat cancers and viruses. The Company has three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from The University of Texas System on behalf of the MD Anderson Cancer Center (MD Anderson) in Houston, Texas. The Company has two wholly owned subsidiaries, Moleculin Australia Pty. Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe. The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials. The physician-sponsored trials utilize primarily external funds, such as grant funds, which are not presented in these financial statements. The Company does not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, the Company does not have a sales organization. The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.

 

2. Basis of presentation, principles of consolidation, and significant accounting policies and liquidity 

 

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of  December 31, 2022 and for the year then ended, including the notes thereto contained in the Form 10-K filed with the SEC on March 22, 2023.

 

Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S.

 

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the significant accounting policies during the three months ended March 31, 2023.

 

Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. 

 

Liquidity and Financial Condition - The Company is an early stage company and has not generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the three months ended March 31, 2023 and 2022, the Company incurred net losses of $7.9 million and $6.9 million, respectively, and had net cash flows used in operating activities o$6.0 million and $4.8 million, respectively. At March 31, 2023, the Company had an accumulated deficit o$109.8 million and cash and cash equivalents of $37.3 million. The Company expects its cash on hand as of March 31, 2023 will be sufficient to fund the Company's operations beyond the near term. Such projections are subject to changes in the Company’s internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity. The Company does not expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the development of its core technologies to the point of generating revenue, most likely via out-licensing, and continues to invest in research and development for additional applications of the Company's core technologies and potentially increase its pipeline of drug candidates. If the Company needs to raise additional capital in order to continue to execute its business plan, there is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital could adversely impact the Company's ability to achieve its intended business objectives and meet its financial obligations as they become due and payable. In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended March 31, 2023 and 2022, the Company has expensed approximately $0.5 million and $0.1 million, respectively, in related general and administrative fees and expenses.

 

7

 

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. 

 

Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

 

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

 

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

 

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.

 

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 3.

 

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2023 and December 31, 2022 (table in thousands): 

 

Description

 

Fair Value

  

Level 1

  

Level 2

  

Level 3

 

Fair value of warrant liability as of March 31, 2023:

 $38  $  $  $38 

Fair value of warrant liability as of December 31, 2022:

 $77  $  $  $77 

 

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. 

 

Three Months Ended March 31, 2023

 

Warrant Liability Long-Term

 

Balance, December 31, 2022

 $77 

Change in fair value - net

  (39)

Balance, March 31, 2023

 $38 

 

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the three months ended March 31, 2023 and 2022, approximatel6.2 million and 4.8 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect. 

 

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 7 - Subsequent Events. 

 

Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 

 

8

 

3. Warrants

 

Liability Classified Warrants

 

The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Only the volatility of the Company's own stock is used in the Black-Scholes option pricing model. 

 

The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows:

 

   

March 31, 2023

   

December 31, 2022

 

Risk-free interest rate

 

4.0% to 4.9%

   

4.2% to 4.8%

 

Volatility

 

58.4% to 67.6%

   

63.1% to 76.3%

 

Expected life (years)

 

0.1 to 2.4

   

0.1 to 2.6

 

Dividend yield

 

—%

   

—%

 

 

A summary of the Company's liability classified warrant activity during the three months ended March 31, 2023 and related information follows: 

 

   

Number of Shares

   

Range of Warrant Exercise

   

Weighted Average

   

Weighted Average Remaining Contractual

 
   

Under Warrant

   

Price per Share

   

Exercise Price

   

Life (Years)

 

Balance at January 1, 2023

    2,656,296     $ 6.30     $ 16.80     $ 9.49       1.7  

Expired warrants

    (21,450 )   $ 16.80     $ 16.80     $ 16.80        

Balance at March 31, 2023

    2,634,846     $ 6.30     $ 16.80     $ 9.43       1.4  

Exercisable at March 31, 2023

    2,634,846     $ 6.30     $ 16.80     $ 9.43       1.4  

 

For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2023, see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.

 

Equity Classified Warrants

 

At March 31, 2023, the Company had 646,501 equity classified warrants outstanding and 404,434 warrants were exercisable. At  December 31, 2022, the Company had 646,501 equity classified warrants outstanding and 400,859 warrants were exercisable.

 

The Company recorded stock compensation expense for the non-employee consulting agreements of $46,000 and $83,000 for the three months ended  March 31, 2023 and 2022, respectively. At  March 31, 2023, there was $391,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

 

9

 

4. Equity 

 

Lincoln Park Equity Line

 

During the three months ended March 31, 2023, pursuant to the 2021 Lincoln Park purchase agreement, the Company issued to Lincoln Park 150,381 shares of common stock for gross proceeds of $0.1 million and in  April 2023, the Company issued an additional 75,187 shares of common stock, resulting in gross proceeds of $0.1 million. The 2021 Lincoln Park Agreement, which has $19.8 million available, terminates in June 2024.

 

Other Components of Equity

 

In March 2023, the Company and WPD agreed to terminate the WPD Agreement. Pursuant to the termination, the Company agreed to pay WPD (or its designees) $700,000 in cash and shares of its common stock valued at $800,000. In  March 2023, the Company issued 822,115 shares of common stock to WPD (or its designee) to satisfy this commitment. See Note 6 - Commitments and Contingencies.

 

Stock-Based Compensation and Outstanding Awards

 

The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants. As of March 31, 2023, there wer752,296 shares remaining to be issued under the 2015 Stock Plan. 

 

Stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively, is as follows (table in thousands): 

 

   

Three Months Ended March 31,

 
   

2023

   

2022

 

General and administrative

  $ 369     $ 361  

Research and development

    130       166  

Total stock-based compensation expense

  $ 499     $ 527  

 

 

5. Income Taxes  

 

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

 

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2023 as a result of the losses recorded during the three months ended March 31, 2023 and the additional losses expected for the remainder of 2023 and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As a result, as of March 31, 2023 and  December 31, 2022 the Company maintained a full valuation allowance for all deferred tax assets.

 

The Company recorded no income tax provision for the three months ended March 31, 2023 and 2022, respectively. The effective tax rate for the three months ended March 31, 2023 and 2022 is nil. The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section 162(m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

 

10

 
 

6. Commitments and Contingencies

 

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2023.

 

Lease Obligations Payable

 

The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2023 and 2022, respectively (table in thousands):

 

  

Three Months Ended March 31,

 
  

2023

  

2022

 

Lease cost:

        

Operating lease cost

 $33  $29 

Variable lease cost

  7   7 

Total

 $40  $36 

 

In June 2022, the Company extended the lab lease until September 30, 2027, with no further right or option to renew. The Company recorded approximately $12,000 and $10,000 in sublease income from a related party for the three months ended March 31, 2023 and 2022, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases was $38,000 and $35,000 for the three months ended  March 31, 2023 and 2022, respectively.

 

Licenses 

 

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson were $64,000 and $76,000 for the three months ended March 31, 2023 and 2022, respectively.

 

HPI - The Company has two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI) with total expenses of $59,000 for each of the three months ended March 31, 2023 and 2022

 

Sponsored Research Agreements - The Company has a sponsored research agreement with MD Anderson expiring December 31, 2024. In April 2023, the Company entered into an amendment to the Sponsored Research Agreement with MD Anderson for total payment of $0.7 million to support the continuation of the project. In addition, the Company also has Sponsored Research Agreements with other universities, one in the US and one in Europe. The expenses recognized under the agreements were $155,000 and $187,000 for the three months ended March 31, 2023 and 2022, respectively.

 

License Terminations 

 

Since February 2019, the Company was party to a sublicense agreement with WPD Pharmaceuticals (WPD), pursuant to which it sublicensed to WPD certain intellectual property rights, including rights to Annamycin, its WP1122 portfolio, and its WP1066 portfolio (as amended, the “WPD Agreement”). WPD is affiliated with Dr. Waldemar Priebe, the Company's founder. In March 2023, the Company and WPD agreed to terminate the WPD Agreement and agreed to pay WPD (or its designee) $700,000 in cash and shares of its common stock valued at $800,000. In  March 2023, the Company issued 822,115 shares of common stock to WPD's designee to satisfy this commitment. With the termination of the WPD Agreement, the Company now has acquired the rights in certain territories previously sub-licensed to WPD to all of its licensed intellectual property, other than the rights related to non-human animals. Additionally, the Company acquired the in-process research and development that WPD has created during the term of the agreement.

 

In February 2022, the Company and Exploration Invest Pte Ltd. (Exploration) entered into a license termination agreement pursuant to which the Company agreed to pay Exploration $400,000 to terminate certain License Agreements and extend confidentiality requirements until the 10-year anniversary of the license termination agreement. Total expenses, reflected in research and development expenses, related to the Company's license terminations were $1.5 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively.

 

7. Subsequent Events

 

In addition to the subsequent events discussed elsewhere in these notes, see below for a discussion of subsequent events occurring after March 31, 2023.

 

On May 5, 2023, the Company received a letter from NASDAQ notifying the Company that for the last 30 consecutive business days the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). The deficiency letter does not result in the immediate delisting of the Company's common stock from the Nasdaq Capital Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until  November 1, 2023, to regain compliance with the Bid Price Rule. If, at any time before November 1, 2023, the bid price for the Company's common stock closes at $1.00 or more for a minimum of 10 consecutive business days, the Nasdaq Staff will provide written notification to the Company that it complies with the Bid Price Rule, unless the Staff exercises its discretion to extend this 10 day period pursuant to Nasdaq Listing Rule 5810(c)(3)(G). If the Company is not in compliance with the Bid Price Rule by November 1, 2023, the Company  may be afforded a second 180 calendar day period to regain compliance. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except for the minimum bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency, which  may include, if necessary, implementing a reverse stock split. If the Company does not regain compliance with the Bid Price Rule by November 1, 2023, and is not eligible for an additional compliance period at that time, the Nasdaq Staff will provide written notification to the Company that its common stock  may be delisted. The Company would then be entitled to appeal the Nasdaq Staff’s determination to a NASDAQ Listing Qualifications Panel and request a hearing. There can be no assurance that, if the Company does appeal a delisting determination by the Nasdaq Staff to the NASDAQ Listing Qualifications Panel, that such appeal would be successful. The Company intends to monitor the closing bid price of its common stock and  may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which could include effecting a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the Bid Price Rule.

 

11

 
 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements.

 

Forward-looking statements include, but are not limited to, statements about:

 

  Our ability to continue our relationship with MD Anderson, including, but not limited to, our ability to maintain current licenses and license future intellectual property resulting from our sponsored research agreements with MD Anderson;
  The success or the lack thereof, including the ability to recruit subjects on a timely basis, for a variety of reasons, of our clinical trials through all phases of clinical development;
  Our ability to satisfy any requirements imposed by the US Food & Drug Administration (FDA) (or its foreign equivalents) as a condition of our clinical trials proceeding or beginning as planned;
 

World-wide events including the war in Ukraine, the COVID-19 pandemic, and the general supply chain shortages effects on our clinical trials, clinical drug candidate supplies, preclinical activities and our ability to raise future financing;

 

Our ability to obtain additional funding to commence or continue our clinical trials, fund operations and develop our product candidates;

 

The need to obtain and retain regulatory approval of our drug candidates, both in the United States and in Europe, and in countries deemed necessary for future trials;

 

Our ability to complete our clinical trials in a timely fashion and within our expected budget and resources;

  Our ability to source our drug products at reasonable prices;
 

Compliance with obligations under intellectual property licenses with third parties;

 

Any delays in regulatory review and approval of drug candidates in clinical development;

  Potential efficacy of our drug candidates;
 

Our ability to commercialize our drug candidates;

 

Market acceptance of our drug candidates;

 

Competition from existing therapies or new therapies that may emerge;

 

Potential product liability claims;

 

Our dependency on third-party manufacturers to successfully, and timely, supply or manufacture our drug candidates for our preclinical work and our clinical trials;

 

Our ability to establish or maintain collaborations, licensing or other arrangements;

 

Our ability and third parties’ abilities to protect intellectual property rights;

 

Our ability to adequately support future growth; and

 

Our ability to attract and retain key personnel to manage our business effectively.

 

We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

 

Our Business

 

We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses. We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial (subject to publishing final Clinical Study Report), based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas. Three of our six drug candidates have shown human activity in clinical trials and are currently in Phase 1b/2 or Phase 2 clinical trials. Since our inception, our drugs have completed, are currently in, or have received approval to proceed in eleven clinical trials.

 

Our Core Technologies

 

Our core technologies consist of the following:

 

a) Annamycin or L-Annamycin is a “next generation” anthracycline designed to be different than currently approved anthracyclines, which are limited in utility because of cardiotoxicity risks and their susceptibility to multidrug resistance mechanisms. Annamycin was designed to avoid multidrug resistance and has shown no cardiotoxicity1 in subjects treated in clinical trials to date. Furthermore, we have demonstrated safe dosing beyond the dose limitations imposed by regulatory authorities upon currently prescribed anthracyclines due to their inherent cardiotoxicity;

 

b) our WP1066 Portfolio, which includes WP1066 and WP1220, two of several Immune/Transcription Modulators in the portfolio designed to inhibit p-STAT3 (phosphorylated signal transducer and activator of transcription 3) among other transcription factors associated with tumor activity, while also stimulating a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs); and

 

c) our WP1122 Portfolio, which contains compounds (including WP1122, WP1096, and WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG), which we believe may provide an opportunity to cut off the fuel supply of tumors by taking advantage of their high level of dependence on glucose in comparison to healthy cells, as well as viruses that depend upon glycolysis and glycosylation to infect and replicate.

 

1 In discussions of “no cardiotoxicity” of Annamycin, management’s beliefs are based on an expert’s opinion based their review of certain clinical trial subject data including LVEF, ECHO strain analyses, and cardiac biomarkers – troponin’s I & T

 

Our Focus 

 

We are focused on internally funded development of:

 

1) Annamycin for the treatment of Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases or STS lung mets)

 

2) Annamycin in combination with Cytarabine (also known as Ara-C, the combination with Annamycin of which is referred to as AnnAraC) for the treatment of Relapsed or Refractory Acute Myeloid Leukemia (R/R AML or AML).

 

3) A better formulation for delivery of WP1066 to further support current and possibly future externally funded oncology clinical trials. 

 

We have also recently established a Recommended Phase 2 Dose (RP2D) for WP1122 to potentially enable future externally funded oncology and virology trials. Beyond this, we support development of our core technologies through several externally funded clinical trials with the potential for others in the near-term.

 

Our Clinical Trials

 

In the US and Europe, we or independent investigators have approval to begin, are currently conducting or have completed eleven internally or externally funded clinical trials for four of our drug candidates – Annamycin, WP1066, WP1220, and WP1122 since inception. All clinical trials are or were in the Phase 1 or 2 stage. During 2021, we had four active clinical trials evaluating either Annamycin or WP1066 in the US and Europe. This increased to six active or recently completed trials in 2022 involving Annamycin, WP1066, and WP1122. In 2021 and 2022, there were five “right-to-try” (or their foreign equivalent) uses of Annamycin and WP1066. Three of the six clinical trials active in 2022 are internally funded trials of Annamycin and one is an internally funded Phase 1 clinical trial for WP1122 establishing an RP2D.

 

Moving into 2023, we are actively recruiting in three clinical trials in a Phase 1b or Phase 2 stage and have recently concluded one trial. These three currently active clinical trials are open label so we expect to be able to periodically announce human activity that is being demonstrated in these trials during 2023. In February 2023, the externally funded Phase 1 clinical trial with WP1066 for the treatment of pediatric brain tumors concluded. We expect up to three externally funded Phase 1b/2 clinical trials for WP1066 in the treatment of GBM and other brain tumors in 2023.

 

During 2022, we or independent investigators filed applications, began recruiting or are currently recruiting for six internally or externally funded clinical trials in the US and Europe.

 

  Annamycin - A clinical trial application (CTA) in Poland for a Phase 1b/2 trial of Annamycin in combination with Cytarabine or AnnAraC for the treatment of AML (MB-106) was allowed in 2022. This trial was later approved to expand into Italy in 2022 and dosing subjects began there in March 2023. With preclinical data in mice demonstrating a 68% improvement in activity in AML with AnnAraC over Annamycin alone and having concluded our single agent trials of Annamycin in AML showing 80% activity in the highest dosing cohort we are now focusing our efforts in AML exclusively on this combination trial.
  Annamycin - We are currently recruiting a Phase 2 clinical trial using Annamycin for the treatment of STS lung mets (MB-107). This multicenter trial is being conducted in the US, with the Phase 2 portion expected to recruit 25 subjects.
  Annamycin - An investigator sponsored trial (externally funded) was initiated in Poland in 2022 to study an alternative dosing regimen for Annamycin in the treatment of STS lung mets. This trial began administering drug to subjects in late 2022. 
  WP1066 - In 2022, an investigational new drug (IND) application we filed in the US for a Phase 1 clinical trial studying WP1066 for treating glioblastoma multiforme (GBM) in adults went into effect. Consistent with our strategy of leveraging external funding for many of our clinical trials, we intend to capitalize on external funding opportunities for investigator-initiated clinical trials in adult cancer patients in 2023. We supplied drug product to an externally funded pediatric brain tumor trial with WP1066 up to its conclusion in February 2023.
  WP1122 - Our Phase 1a clinical trial of WP1122 in the United Kingdom for the treatment of COVID-19 (MB-301) began recruiting in 2022, and we completed the trial in late 2022, establishing an RP2D. We are in the process of completing this trial - locking the database and finalizing a clinical study report (CSR). This RP2D will possibly aid in future externally funded trials for the treatment of certain viruses and cancers as we look for investigator led studies.
  WP1122 - In 2022, we filed an IND with the FDA that then went into effect, allowing us to proceed with a clinical trial using WP1122 for the treatment of GBM. This may lead to an investigator-initiated trial (IIT) in oncology. Additionally, an investigator independently filed a CTA in Brazil in 2022 to study WP1122 for the treatment of moderate to severe COVID-19. Based on current COVID-19 epidemiology, we do not expect this externally funded trial to be conducted.

 

Additionally, we are in discussions with research institutions in the US, Asia, and South America regarding possible externally funded trials or programs involving WP1066 and WP1122.

 

 

Recent Business Developments 

 

Below are recent business developments.

 

Annamycin 

 

MB-106 Annamycin in Combination with Cytarabine for the Treatment of AML

 

On May 2, 2023, we announced successful completion of the first cohort in our Phase 1b portion of our Phase 1b/2 clinical trial using Annamycin in combination with Cytarabine for the treatment of AML (MB-106). In this cohort three subjects were treated, all of whom are believed to be relapsed from multiple prior therapies. Annamycin was dosed at 190 mg/m2, along with Cytarabine at 2.0 g/m2/day for 5 days (total dose of 10g/m2), consistent with the familiar 7+3 regimen. We, at the recommendation of the safety review committee, deemed the first cohort dose as safe and opened the second cohort with the Annamycin dose being increased to 230 mg/m2.

 

The median of prior therapies for these three subjects were 5 (2 to 7). One of the subjects, who was 78 years of age at the time of the study initiation with 2 prior multi-year therapies, was preliminary recorded as a complete response or CR per the protocol and it was confirmed that the CR was durable after four weeks. The other two subjects were shown to have disease progression. Subjects have already been identified as potential candidates for the second cohort which is now recruiting.

 

MB-107 Annamycin Monotherapy for the Treatment of STS Lung Mets

 

In our MB-107 clinical trial treating STS lung mets with Annamycin as monotherapy, thirteen subjects have been recruited to date for this Phase 2 trial and treated at the confirmed Recommended Phase 2 Dose (RP2D) of 330 mg/m2. Two subjects left the study due to infusion related reactions to the initial dose of the study drug. Ten subjects have received two cycles and had their end of cycle 2 scan. One subject has received their initial dose and has not received cycle 2 scans. To date, six or 60% have exhibited stable disease (SD) after receiving two cycles. Three are continuing with the study drug. One such subject has received six cycles after their end of cycle 4 scan exhibited stable disease. For the three subjects with SD not continuing with the study drug, they are being followed for progression free survival and, for all subjects, overall survival is being monitored. This data is preliminary and subject to change.

 

Other Trial and Publications

 

The Phase 1b/2 investigator sponsored trial (externally funded) was initiated in Poland in 2022 to study an alternative dosing regimen for Annamycin in the treatment of STS lung mets. This trial has enrolled and treated two subjects with two cycles in the first cohort of the Phase 1b portion of the study. There will be three subjects per cohort with the first cohort treating subjects with 35 mg/m2 of Annamycin per week (3 weeks on and 1 week off per cycle). After two cycles the subjects will receive their end of cycle 2 scan. At the end of two cycles both subjects treated to date demonstrated progressive disease. This is early in where Annamycin is being dosed weekly. Preclinical data demonstrated a benefit to weekly dosing of Annamycin versus traditional chemotherapy dosing of every three weeks.

 

We announced in April the presentation of positive pharmacokinetics and tissue-organ distribution data demonstrating high antitumor activity of Annamycin in preclinical cancer models, which sponsored research data was presented at the American Association for Cancer Research (AACR) Annual Meeting 2023. In this research, Annamycin demonstrated increased penetration and accumulation in the liver, which correlated with high antitumor activity in HEPA 1-6 hepatocellular carcinoma and CT26 colon cancer liver metastasis models. This poster was presented at the AACR Annual Meeting 2023, which took place April 14-19, 2023, at the Orange County Convention Center in Orlando, FL. The poster titled, Exploration of Annamycin Organotropism to Target Primary and Metastatic Liver Cancers was presented by Rafal Zielinski, Ph.D., Department of Experimental Therapeutics, Division of Cancer Medicine, The University of Texas MD Anderson Cancer Center as part of the Experimental and Molecular Therapeutic Session: “Novel Antitumor Agents, PI3K/AKT Inhibitors, Proteasome Inhibitors, and Topoisomerases.” The poster outlined results from the analysis of the pharmacokinetics of two formulations of Annamycin, liposome formulated drug product (L-ANN) and free Annamycin (ANN), in the liver in comparison with doxorubicin (DOX) and to determine its tumoricidal potential in a hepatocellular carcinoma (HCC) model in situ and in experimental models of liver metastasis.

 

 

WP1066

 

We continue discussions with two US academic institutions and another foreign academic institution for externally funded trials for the use of WP1066 for the treatment of glioblastomas and/or pediatric brain tumors. We expect to finalize agreements in the second quarter with at least one of these institutions and begin trials in the second half of 2023.

 

WP1122

 

With the data generated from the MB-301 clinical trial setting an RP2D for WP1122 and additional sponsored research, we continue to explore avenues of external funding for further development of this portfolio.

 

Corporate

 

Licensing

 

WPD Licensing Agreement

 

Since February 2019, we were party to a sublicense agreement with WPD Pharmaceuticals (WPD), pursuant to which we sublicensed to WPD certain intellectual property rights, including rights to Annamycin, its WP1122 portfolio, and its WP1066 portfolio (as amended, the “WPD Agreement”). WPD is affiliated with Dr. Waldemar Priebe, our founder. In March 2023, we and WPD agreed to terminate the WPD Agreement. Pursuant to the termination, we agreed to pay WPD (or its designee) $700,000 in cash and shares of our common stock valued at $800,000. In March 2023, we issued 822,115 shares of common stock to WPD's designee to satisfy this commitment. With the termination of the WPD Agreement, we now have acquired the rights in certain territories previously sub-licensed to WPD to all of our licensed intellectual property, other than the rights related to non-human animals. Additionally, we acquired the in-process research and development that WPD has created during the term of the agreement. As part of this Agreement, WPD assigned their rights and duties to us for the Phase 1b/2 investigator sponsored trial (externally funded) initiated in Poland in 2022 to study an alternative dosing regimen for Annamycin in the treatment of STS lung mets. The approximate value of the grant supporting this investigator sponsored trial is $1.5 million. 

 

 

Results of Operations

 

The following table sets forth, for the periods indicated, data derived from our statement of operations (table in thousands) and such changes in the periods are discussed below in approximate amounts:

 

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

   

Three Months Ended March 31,

 
   

2023

   

2022

 

Revenues

  $     $  
                 

Operating expenses:

               

Research and development

    5,687       4,620  

General and administrative

    2,637       2,422  

Depreciation and amortization

    30       32  

Total operating expenses

    8,354       7,074  

Loss from operations

    (8,354 )     (7,074 )

Other income:

               

Gain from change in fair value of warrant liability

    39       160  

Other income, net

    8       5  

Interest income, net

    392       42  

Net loss

  $ (7,915 )   $ (6,867 )

  

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

 

Research and Development Expense. Research and development (R&D) expense was $5.7 million and $4.6 million for the three months ended March 31, 2023 and 2022, respectively. The increase of $1.1 million is mainly related to the WPD sublicense termination. 

 

General and Administrative Expense. General and administrative expense was $2.6 million and $2.4 million for the three months ended March 31, 2023 and 2022, respectively. The increase of $0.2 million is mainly related to an increase in regulatory and legal services, and consulting & advisory fees.

 

Gain from Change in Fair Value of Warrant Liability. We recorded a net gain of $0.04 million in the first quarter of 2023 as compared to a net gain of $0.2 million in the first quarter of 2022, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with our stock offerings. We are required to revalue our liability-classified warrants at the time of each warrant exercise, if applicable, and at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of the warrant in the period in which the change occurred. We calculated the fair value of the warrants outstanding using the Black-Scholes model. A gain results principally from a decline in our share price during the period and a loss results principally from an increase in our share price.

 

Interest income, net. Interest income, net increased by approximately $0.4 million for the comparable quarterly periods due to rising interest rates during the past year.

 

 

Liquidity and Capital Resources

 

The following table sets forth our primary sources and uses of cash for the period indicated (table in thousands): 

 

   

Three Months Ended March 31,

 
   

2023

   

2022

 

Net cash used in operating activities

  $ (6,017 )   $ (4,805 )

Net cash used in investing activities

          (6 )

Net cash provided by financing activities

    141        

Effect of exchange rate changes on cash and cash equivalents

    (4 )     12  

Net decrease in cash and cash equivalents

  $ (5,880 )   $ (4,799 )

 

As of March 31, 2023, there was $0.3 million of cash on hand in a bank account in Australia and we know of no related limitations impacting our liquidity in Australia.

 

Cash used in operating activities

 

Cash used in operations was $6.0 million for the three months ended March 31, 2023. This $1.2 million increase over the prior year period of $4.8 million was primarily due to payments for increased clinical trial activity, costs related to the WPD sublicense termination, and increased consulting, legal, and advisory fees. These are all a reflection of the ongoing clinical and pre-clinical activity and the associated increase in general and administrative support for our three core drug technologies.

 

Cash provided by financing activities

 

During the three months ended March 31, 2023, utilizing the Lincoln Park Equity Line, we issued 150,381 shares of common stock (including commitment shares), at an average price of $0.94 per share, resulting in gross proceeds of $0.1 million. Subsequent to March 31, 2023, we issued to Lincoln Park an additional 75,187 shares of common stock, (including commitment shares), at an average price of $0.93 per share, resulting in gross proceeds of $0.1 million. 

 

We believe that our existing cash and cash equivalents as of March 31, 2023 will be sufficient to meet our projected operating requirements, which include a potential increase over our current R&D rate of expenditures, beyond the second quarter of 2024. Such projections are subject to changes in our internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity and potential legal costs. We anticipate incurring operating losses for the next several years as we support the preclinical and clinical activities necessary to prepare our drug candidates for successful out licensing, including our efforts to expand our technologies. These factors raise uncertainties about our ability to fund operations in future years. If we need to raise additional capital in order to continue to execute our business plan, there is no assurance that additional financing will be available when needed or that we will be able to obtain financing on terms acceptable to us. A failure to raise sufficient capital could adversely impact our ability to achieve our intended business objectives and meet our financial obligations as they become due and payable.

 

In March 2022, we received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are our officers or directors) and entities, and materials related to the development of and statements regarding our drug candidate for the treatment of COVID-19. We have received, and expect to continue to receive, periodic further requests from the SEC staff with respect to this matter. We are not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that we have made, we believe in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to us states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended March 31, 2023 and 2022, we have expended approximately $0.5 million and $0.1 million, respectively, in related legal fees and expenses. 

 

Critical Accounting Policies and Significant Judgments and Estimates

 

There have been no material changes to our critical accounting policies and use of estimates from those disclosed in our Form 10-K for the year ended December 31, 2022. For a discussion of our critical accounting policies and use of estimates, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Estimates in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

 

Not applicable as we are a smaller reporting company.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures designed to ensure that material information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that material information is accumulated and communicated to our management, including our Chief Executive Officer (CEO), who is our principal executive officer, and Chief Financial Officer (CFO), who is our principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosures. Our CEO and CFO have evaluated these disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q and have determined that such disclosure controls and procedures were effective as of March 31, 2023.

 

Changes in Internal Control Over Financial Reporting

 

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15-d-15(f) under the Exchange Act) during the three months ended March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

For information regarding factors that could affect our results of operations, financial condition and liquidity, refer to the section entitled “Risk Factors” in Part I, Item 1A in our annual report on Form 10-K for the year ended December 31, 2022. Except as updated below, there have been no material changes from the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2022.

 

If we fail to satisfy all applicable continued listing requirements of the Nasdaq Capital Market, including the $1.00 minimum closing bid price requirement, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.

 

Our common stock is currently listed on the Nasdaq Capital Market under the symbol “MBRX.” In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum bid price, and certain corporate governance requirements. There can be no assurances that we will be able to comply with the applicable listing standards.

 

On May 5, 2023, we received a notice from Nasdaq that we were not in compliance with Nasdaq’s Listing Rule 5550(a)(2), as the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days. We have 180 days, or until November 1, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the minimum bid price of our common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period. While we may be able to qualify for additional time to attempt to regain compliance, there can be no assurance that we will qualify for additional time to regain compliance, or that we will regain compliance with or without such additional time. If we do not regain compliance within the allotted compliance period(s), including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that our shares of common stock will be subject to delisting.

 

In the event that our common stock is delisted from Nasdaq and is not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 

 

In March 2023, the Company and WPD agreed to terminate the WPD Agreement. Pursuant to the termination, the Company agreed to pay WPD (or its designees) $700,000 in cash and shares of our common stock valued at $800,000. On March 22, 2023, the Company issued 822,115 shares of common stock to WPD (or its designee) to satisfy this commitment. The foregoing securities were issued pursuant to Section 4(a)(2) of the Securities Act.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURE

 

Not applicable.

 

ITEM 5. OTHER INFORMATION. 

 

None.

 

 

ITEM 6. EXHIBITS

 

Exhibit No.

 

Description

     

31.1*

 

Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

     

31.2*

 

Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

     

32.1*

 

Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     

32.2*

 

Certification of Principal Accounting and Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     

101.INS*

 

Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 

     

101.SCH*

 

Inline XBRL Taxonomy Extension Schema Document

     

101.CAL*

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document

     

101.DEF*

 

Inline XBRL Taxonomy Extension Definition Linkbase Document

     

101.LAB*

 

Inline XBRL Taxonomy Extension Label Linkbase Document

     

101.PRE*

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document

     
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

* Filed herewith.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

MOLECULIN BIOTECH, INC.

     

Date: May 10, 2023

By:

/s/ Walter V. Klemp

   

Walter V. Klemp,

   

Chief Executive Officer and Chairman

(Principal Executive Officer)

     
Date: May 10, 2023

By:

/s/ Jonathan P. Foster

   

Jonathan P. Foster,

   

Executive Vice President & Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

20
EX-31.1 2 ex_468529.htm EXHIBIT 31.1 ex_468529.htm

 

Exhibit 31.1

 

OFFICER’S CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Walter V. Klemp, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Moleculin Biotech, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

May 10, 2023

 

By: /s/ Walter V. Klemp

Walter V. Klemp

Chief Executive Officer

(Principal Executive Officer)

 

 
EX-31.2 3 ex_468530.htm EXHIBIT 31.2 ex_468530.htm

 

Exhibit 31.2

 

OFFICER’S CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jonathan P. Foster, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Moleculin Biotech, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

May 10, 2023

 

By: /s/ Jonathan P. Foster

Jonathan P. Foster

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

 

 
EX-32.1 4 ex_468531.htm EXHIBIT 32.1 ex_468531.htm

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 of Moleculin Biotech, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Walter V. Klemp, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m or 78o(d)); and

 

 

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: May 10, 2023

  

By: /s/ Walter V. Klemp

Walter V. Klemp

Chief Executive Officer

(Principal Executive Officer)

  

A signed original of this written statement required by Section 906 has been provided to Moleculin Biotech, Inc. and will be retained by Moleculin Biotech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 
EX-32.2 5 ex_468532.htm EXHIBIT 32.2 ex_468532.htm

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 of Moleculin Biotech, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan P. Foster, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m or 78o(d)); and

 

 

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: May 10, 2023

  

By: /s/ Jonathan P. Foster

Jonathan P. Foster

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

   

A signed original of this written statement required by Section 906 has been provided to Moleculin Biotech, Inc. and will be retained by Moleculin Biotech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 
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Entity Address, City or Town us-gaap_EffectiveIncomeTaxRateContinuingOperations Effective Income Tax Rate Reconciliation, Percent Entity Address, Postal Zip Code Net loss per common share - basic and diluted (in dollars per share) Entity Address, State or Province Statement of Cash Flows [Abstract] Entity Common Stock, Shares Outstanding Statement of Stockholders' Equity [Abstract] Income Statement [Abstract] Trading Symbol Nature of Operations [Text Block] mbrx_PaymentsForResearchAndDevelopmentAgreement Payments For Research And Development Agreement Represents payments for research and development agreement. Local Phone Number Transaction [Domain] us-gaap_TableTextBlock Notes Tables Transaction Type [Axis] Related Party, Type [Axis] Operating lease, net The amount of noncash expense for operating lease, net. Related Party, Type [Domain] Warrants Disclosure [Text Block] The entire disclosure for warrants. Schedule of Warrants or Rights, Assumptions Used [Table Text Block] The tabular disclosure for assumptions used for warrants or rights. Common stock issued for license rights The amount of stock issued during the period for license rights. Common stock issued for license rights (in shares) The number of shares of stock issued during the period for license rights. Warrants, assumptions Cash flows from financing activities: Issuance of common stock with equity purchase agreement (in shares) Stock Issued During Period, Shares, New Issues (in shares) Lincoln Park Transaction [Member] Represents the Lincoln park transaction. Schedule of Warrant Activity [Table Text Block] The tabular disclosure for warrant activity. mbrx_NumberOfCoreDrugTechnologies Number of Core Drug Technologies The number of core drug technologies. 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Document And Entity Information - shares
3 Months Ended
Mar. 31, 2023
May 01, 2023
Document Information [Line Items]    
Entity Central Index Key 0001659617  
Entity Registrant Name Moleculin Biotech, Inc.  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2023  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2023  
Document Transition Report false  
Entity File Number 001-37758  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 47-4671997  
Entity Address, Address Line One 5300 Memorial Drive, Suite 950  
Entity Address, City or Town Houston  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 77007  
City Area Code 713  
Local Phone Number 300-5160  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Small Business true  
Entity Filer Category Non-accelerated Filer  
Entity Emerging Growth Company false  
Entity Shell Company false  
Title of 12(b) Security Common Stock, par value $0.001 per share  
Trading Symbol MBRX  
Security Exchange Name NASDAQ  
Entity Common Stock, Shares Outstanding   29,675,510
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 37,265 $ 43,145
Prepaid expenses and other current assets 2,024 2,451
Total current assets 39,289 45,596
Furniture and equipment, net 244 275
Intangible assets 11,148 11,148
Operating lease right-of-use asset 381 403
Total assets 51,062 57,422
Current liabilities:    
Accounts payable 1,939 2,095
Accrued expenses and other current liabilities 3,093 2,724
Total current liabilities 5,032 4,819
Operating lease liability - long-term, net of current portion 308 335
Warrant liability - long-term 38 77
Total liabilities 5,378 5,231
Commitments and contingencies (Note 6)
Stockholders' equity    
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding 0 0
Common stock, $0.001 par value; 100,000,000 shares authorized; 29,600,323 and 28,627,827 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 30 29
Additional paid-in capital 155,396 153,985
Accumulated other comprehensive income 8 12
Accumulated deficit (109,750) (101,835)
Total stockholders’ equity 45,684 52,191
Total liabilities and stockholders’ equity $ 51,062 $ 57,422
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Mar. 31, 2023
Dec. 31, 2022
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized (in shares) 5,000,000 5,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par or stated value per share ( (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 100,000,000 100,000,000
Common stock, shares issued (in shares) 29,600,323 28,627,827
Common stock, shares outstanding (in shares) 29,600,323 28,627,827
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Revenues $ 0 $ 0
Operating expenses:    
Research and development 5,687 4,620
General and administrative 2,637 2,422
Depreciation and amortization 30 32
Total operating expenses 8,354 7,074
Loss from operations (8,354) (7,074)
Other income:    
Gain from change in fair value of warrant liability 39 160
Other income, net 8 5
Interest income, net 392 42
Net loss $ (7,915) $ (6,867)
Net loss per common share - basic and diluted (in dollars per share) $ (0.28) $ (0.24)
Weighted average common shares outstanding, basic and diluted (in shares) 28,749,974 28,578,338
Net loss $ (7,915) $ (6,867)
Other comprehensive loss:    
Foreign currency translation (4) 12
Comprehensive loss $ (7,919) $ (6,855)
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Cash flows from operating activities:    
Net loss $ (7,915) $ (6,867)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 30 32
Stock-based compensation 499 527
License rights expense settled in stock 772 0
Change in fair value of warrant liability (39) (160)
Operating lease, net 110 90
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets 427 438
Accounts payable (156) 860
Accrued expenses and other current liabilities 255 275
Net cash used in operating activities (6,017) (4,805)
Cash flows from investing activities:    
Purchase of fixed assets 0 (6)
Net cash used in investing activities 0 (6)
Cash flows from financing activities:    
Proceeds from sale of common stock, net of issuance costs 141 0
Net cash provided by financing activities 141 0
Effect of exchange rate changes on cash and cash equivalents (4) 12
Net decrease in cash and cash equivalents (5,880) (4,799)
Cash and cash equivalents, - beginning of period 43,145 70,903
Cash and cash equivalents, - end of period $ 37,265 $ 66,104
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Consolidated Statement of Stockholders Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Balance (in shares) at Dec. 31, 2021 28,578,338        
Balance at Dec. 31, 2021 $ 29 $ 151,733 $ (72,810) $ 41 $ 78,993
Stock-based compensation 0 527 0 0 527
Net loss 0 0 (6,867) 0 (6,867)
Foreign currency translation $ 0 0 0 12 12
Balance (in shares) at Mar. 31, 2022 28,578,338        
Balance at Mar. 31, 2022 $ 29 152,260 (79,677) 53 72,665
Balance (in shares) at Dec. 31, 2022 28,627,827        
Balance at Dec. 31, 2022 $ 29 153,985 (101,835) 12 52,191
Issuance of common stock with equity purchase agreement (in shares) 150,381        
Issuance of common stock with equity purchase agreement $ 0 141 0 0 141
Common stock issued for license rights (in shares) 822,115        
Common stock issued for license rights $ 1 771 0 0 772
Stock-based compensation 0 499 0 0 499
Net loss 0 0 (7,915) 0 (7,915)
Foreign currency translation $ 0 0 0 (4) (4)
Balance (in shares) at Mar. 31, 2023 29,600,323        
Balance at Mar. 31, 2023 $ 30 $ 155,396 $ (109,750) $ 8 $ 45,684
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.23.1
Note 1 - Nature of Business
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Nature of Operations [Text Block]

1. Nature of Business

 

The terms "MBI" or "the Company", "we", "our", and "us" are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015, with clinical programs for hard-to-treat cancers and viruses. The Company has three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from The University of Texas System on behalf of the MD Anderson Cancer Center (MD Anderson) in Houston, Texas. The Company has two wholly owned subsidiaries, Moleculin Australia Pty. Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe. The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials. The physician-sponsored trials utilize primarily external funds, such as grant funds, which are not presented in these financial statements. The Company does not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, the Company does not have a sales organization. The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.23.1
Note 2 - Basis of Presentation, Principles of Consolidation, Significant Accounting Policies and Liquidity
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

2. Basis of presentation, principles of consolidation, and significant accounting policies and liquidity 

 

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of  December 31, 2022 and for the year then ended, including the notes thereto contained in the Form 10-K filed with the SEC on March 22, 2023.

 

Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S.

 

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the significant accounting policies during the three months ended March 31, 2023.

 

Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. 

 

Liquidity and Financial Condition - The Company is an early stage company and has not generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the three months ended March 31, 2023 and 2022, the Company incurred net losses of $7.9 million and $6.9 million, respectively, and had net cash flows used in operating activities o$6.0 million and $4.8 million, respectively. At March 31, 2023, the Company had an accumulated deficit o$109.8 million and cash and cash equivalents of $37.3 million. The Company expects its cash on hand as of March 31, 2023 will be sufficient to fund the Company's operations beyond the near term. Such projections are subject to changes in the Company’s internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity. The Company does not expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the development of its core technologies to the point of generating revenue, most likely via out-licensing, and continues to invest in research and development for additional applications of the Company's core technologies and potentially increase its pipeline of drug candidates. If the Company needs to raise additional capital in order to continue to execute its business plan, there is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital could adversely impact the Company's ability to achieve its intended business objectives and meet its financial obligations as they become due and payable. In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended March 31, 2023 and 2022, the Company has expensed approximately $0.5 million and $0.1 million, respectively, in related general and administrative fees and expenses.

 

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. 

 

Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

 

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

 

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

 

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.

 

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 3.

 

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2023 and December 31, 2022 (table in thousands): 

 

Description

 

Fair Value

  

Level 1

  

Level 2

  

Level 3

 

Fair value of warrant liability as of March 31, 2023:

 $38  $  $  $38 

Fair value of warrant liability as of December 31, 2022:

 $77  $  $  $77 

 

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. 

 

Three Months Ended March 31, 2023

 

Warrant Liability Long-Term

 

Balance, December 31, 2022

 $77 

Change in fair value - net

  (39)

Balance, March 31, 2023

 $38 

 

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the three months ended March 31, 2023 and 2022, approximately 6.2 million and 4.8 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect. 

 

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 7 - Subsequent Events. 

 

Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 

 

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.23.1
Note 3 - Warrants
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Warrants Disclosure [Text Block]

3. Warrants

 

Liability Classified Warrants

 

The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Only the volatility of the Company's own stock is used in the Black-Scholes option pricing model. 

 

The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows:

 

   

March 31, 2023

   

December 31, 2022

 

Risk-free interest rate

 

4.0% to 4.9%

   

4.2% to 4.8%

 

Volatility

 

58.4% to 67.6%

   

63.1% to 76.3%

 

Expected life (years)

 

0.1 to 2.4

   

0.1 to 2.6

 

Dividend yield

 

—%

   

—%

 

 

A summary of the Company's liability classified warrant activity during the three months ended March 31, 2023 and related information follows: 

 

   

Number of Shares

   

Range of Warrant Exercise

   

Weighted Average

   

Weighted Average Remaining Contractual

 
   

Under Warrant

   

Price per Share

   

Exercise Price

   

Life (Years)

 

Balance at January 1, 2023

    2,656,296     $ 6.30     $ 16.80     $ 9.49       1.7  

Expired warrants

    (21,450 )   $ 16.80     $ 16.80     $ 16.80        

Balance at March 31, 2023

    2,634,846     $ 6.30     $ 16.80     $ 9.43       1.4  

Exercisable at March 31, 2023

    2,634,846     $ 6.30     $ 16.80     $ 9.43       1.4  

 

For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2023, see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.

 

Equity Classified Warrants

 

At March 31, 2023, the Company had 646,501 equity classified warrants outstanding and 404,434 warrants were exercisable. At  December 31, 2022, the Company had 646,501 equity classified warrants outstanding and 400,859 warrants were exercisable.

 

The Company recorded stock compensation expense for the non-employee consulting agreements of $46,000 and $83,000 for the three months ended  March 31, 2023 and 2022, respectively. At  March 31, 2023, there was $391,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

 

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.23.1
Note 4 - Equity
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Equity [Text Block]

4. Equity 

 

Lincoln Park Equity Line

 

During the three months ended March 31, 2023, pursuant to the 2021 Lincoln Park purchase agreement, the Company issued to Lincoln Park 150,381 shares of common stock for gross proceeds of $0.1 million and in  April 2023, the Company issued an additional 75,187 shares of common stock, resulting in gross proceeds of $0.1 million. The 2021 Lincoln Park Agreement, which has $19.8 million available, terminates in June 2024.

 

Other Components of Equity

 

In March 2023, the Company and WPD agreed to terminate the WPD Agreement. Pursuant to the termination, the Company agreed to pay WPD (or its designees) $700,000 in cash and shares of its common stock valued at $800,000. In  March 2023, the Company issued 822,115 shares of common stock to WPD (or its designee) to satisfy this commitment. See Note 6 - Commitments and Contingencies.

 

Stock-Based Compensation and Outstanding Awards

 

The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants. As of March 31, 2023, there were 752,296 shares remaining to be issued under the 2015 Stock Plan. 

 

Stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively, is as follows (table in thousands): 

 

   

Three Months Ended March 31,

 
   

2023

   

2022

 

General and administrative

  $ 369     $ 361  

Research and development

    130       166  

Total stock-based compensation expense

  $ 499     $ 527  

 

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.23.1
Note 5 - Income Taxes
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

5. Income Taxes  

 

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

 

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2023 as a result of the losses recorded during the three months ended March 31, 2023 and the additional losses expected for the remainder of 2023 and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As a result, as of March 31, 2023 and  December 31, 2022 the Company maintained a full valuation allowance for all deferred tax assets.

 

The Company recorded no income tax provision for the three months ended March 31, 2023 and 2022, respectively. The effective tax rate for the three months ended March 31, 2023 and 2022 is nil. The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section 162(m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.

 

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.23.1
Note 6 - Commitments and Contingencies
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

6. Commitments and Contingencies

 

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2023.

 

Lease Obligations Payable

 

The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2023 and 2022, respectively (table in thousands):

 

  

Three Months Ended March 31,

 
  

2023

  

2022

 

Lease cost:

        

Operating lease cost

 $33  $29 

Variable lease cost

  7   7 

Total

 $40  $36 

 

In June 2022, the Company extended the lab lease until September 30, 2027, with no further right or option to renew. The Company recorded approximately $12,000 and $10,000 in sublease income from a related party for the three months ended March 31, 2023 and 2022, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases was $38,000 and $35,000 for the three months ended  March 31, 2023 and 2022, respectively.

 

Licenses 

 

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson were $64,000 and $76,000 for the three months ended March 31, 2023 and 2022, respectively.

 

HPI - The Company has two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI) with total expenses of $59,000 for each of the three months ended March 31, 2023 and 2022

 

Sponsored Research Agreements - The Company has a sponsored research agreement with MD Anderson expiring December 31, 2024. In April 2023, the Company entered into an amendment to the Sponsored Research Agreement with MD Anderson for total payment of $0.7 million to support the continuation of the project. In addition, the Company also has Sponsored Research Agreements with other universities, one in the US and one in Europe. The expenses recognized under the agreements were $155,000 and $187,000 for the three months ended March 31, 2023 and 2022, respectively.

 

License Terminations 

 

Since February 2019, the Company was party to a sublicense agreement with WPD Pharmaceuticals (WPD), pursuant to which it sublicensed to WPD certain intellectual property rights, including rights to Annamycin, its WP1122 portfolio, and its WP1066 portfolio (as amended, the “WPD Agreement”). WPD is affiliated with Dr. Waldemar Priebe, the Company's founder. In March 2023, the Company and WPD agreed to terminate the WPD Agreement and agreed to pay WPD (or its designee) $700,000 in cash and shares of its common stock valued at $800,000. In  March 2023, the Company issued 822,115 shares of common stock to WPD's designee to satisfy this commitment. With the termination of the WPD Agreement, the Company now has acquired the rights in certain territories previously sub-licensed to WPD to all of its licensed intellectual property, other than the rights related to non-human animals. Additionally, the Company acquired the in-process research and development that WPD has created during the term of the agreement.

 

In February 2022, the Company and Exploration Invest Pte Ltd. (Exploration) entered into a license termination agreement pursuant to which the Company agreed to pay Exploration $400,000 to terminate certain License Agreements and extend confidentiality requirements until the 10-year anniversary of the license termination agreement. Total expenses, reflected in research and development expenses, related to the Company's license terminations were $1.5 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.23.1
Note 7 - Subsequent Events
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Subsequent Events [Text Block]

7. Subsequent Events

 

In addition to the subsequent events discussed elsewhere in these notes, see below for a discussion of subsequent events occurring after March 31, 2023.

 

On May 5, 2023, the Company received a letter from NASDAQ notifying the Company that for the last 30 consecutive business days the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). The deficiency letter does not result in the immediate delisting of the Company's common stock from the Nasdaq Capital Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until  November 1, 2023, to regain compliance with the Bid Price Rule. If, at any time before November 1, 2023, the bid price for the Company's common stock closes at $1.00 or more for a minimum of 10 consecutive business days, the Nasdaq Staff will provide written notification to the Company that it complies with the Bid Price Rule, unless the Staff exercises its discretion to extend this 10 day period pursuant to Nasdaq Listing Rule 5810(c)(3)(G). If the Company is not in compliance with the Bid Price Rule by November 1, 2023, the Company  may be afforded a second 180 calendar day period to regain compliance. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except for the minimum bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency, which  may include, if necessary, implementing a reverse stock split. If the Company does not regain compliance with the Bid Price Rule by November 1, 2023, and is not eligible for an additional compliance period at that time, the Nasdaq Staff will provide written notification to the Company that its common stock  may be delisted. The Company would then be entitled to appeal the Nasdaq Staff’s determination to a NASDAQ Listing Qualifications Panel and request a hearing. There can be no assurance that, if the Company does appeal a delisting determination by the Nasdaq Staff to the NASDAQ Listing Qualifications Panel, that such appeal would be successful. The Company intends to monitor the closing bid price of its common stock and  may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which could include effecting a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the Bid Price Rule.

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.23.1
Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of  December 31, 2022 and for the year then ended, including the notes thereto contained in the Form 10-K filed with the SEC on March 22, 2023.

 

Consolidation, Policy [Policy Text Block]

Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S.

 

Significant Accounting Policies [Policy Text Block]

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the significant accounting policies during the three months ended March 31, 2023.

 

Use of Estimates, Policy [Policy Text Block]

Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. 

 

Liquidity and Financial Condition [Policy Text Block]

Liquidity and Financial Condition - The Company is an early stage company and has not generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the three months ended March 31, 2023 and 2022, the Company incurred net losses of $7.9 million and $6.9 million, respectively, and had net cash flows used in operating activities o$6.0 million and $4.8 million, respectively. At March 31, 2023, the Company had an accumulated deficit o$109.8 million and cash and cash equivalents of $37.3 million. The Company expects its cash on hand as of March 31, 2023 will be sufficient to fund the Company's operations beyond the near term. Such projections are subject to changes in the Company’s internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity. The Company does not expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the development of its core technologies to the point of generating revenue, most likely via out-licensing, and continues to invest in research and development for additional applications of the Company's core technologies and potentially increase its pipeline of drug candidates. If the Company needs to raise additional capital in order to continue to execute its business plan, there is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital could adversely impact the Company's ability to achieve its intended business objectives and meet its financial obligations as they become due and payable. In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended March 31, 2023 and 2022, the Company has expensed approximately $0.5 million and $0.1 million, respectively, in related general and administrative fees and expenses.

 

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. 

 

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

 

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

 

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

 

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.

 

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 3.

 

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2023 and December 31, 2022 (table in thousands): 

 

Description

 

Fair Value

  

Level 1

  

Level 2

  

Level 3

 

Fair value of warrant liability as of March 31, 2023:

 $38  $  $  $38 

Fair value of warrant liability as of December 31, 2022:

 $77  $  $  $77 

 

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. 

 

Three Months Ended March 31, 2023

 

Warrant Liability Long-Term

 

Balance, December 31, 2022

 $77 

Change in fair value - net

  (39)

Balance, March 31, 2023

 $38 

 

Earnings Per Share, Policy [Policy Text Block]

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the three months ended March 31, 2023 and 2022, approximately 6.2 million and 4.8 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect. 

 

Subsequent Events, Policy [Policy Text Block]

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 7 - Subsequent Events. 

 

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 

 

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.23.1
Note 2 - Basis of Presentation, Principles of Consolidation, Significant Accounting Policies and Liquidity (Tables)
3 Months Ended
Mar. 31, 2023
Notes Tables  
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

Description

 

Fair Value

  

Level 1

  

Level 2

  

Level 3

 

Fair value of warrant liability as of March 31, 2023:

 $38  $  $  $38 

Fair value of warrant liability as of December 31, 2022:

 $77  $  $  $77 

Three Months Ended March 31, 2023

 

Warrant Liability Long-Term

 

Balance, December 31, 2022

 $77 

Change in fair value - net

  (39)

Balance, March 31, 2023

 $38 
XML 27 R16.htm IDEA: XBRL DOCUMENT v3.23.1
Note 3 - Warrants (Tables)
3 Months Ended
Mar. 31, 2023
Notes Tables  
Schedule of Warrants or Rights, Assumptions Used [Table Text Block]
   

March 31, 2023

   

December 31, 2022

 

Risk-free interest rate

 

4.0% to 4.9%

   

4.2% to 4.8%

 

Volatility

 

58.4% to 67.6%

   

63.1% to 76.3%

 

Expected life (years)

 

0.1 to 2.4

   

0.1 to 2.6

 

Dividend yield

 

—%

   

—%

 
Schedule of Warrant Activity [Table Text Block]
   

Number of Shares

   

Range of Warrant Exercise

   

Weighted Average

   

Weighted Average Remaining Contractual

 
   

Under Warrant

   

Price per Share

   

Exercise Price

   

Life (Years)

 

Balance at January 1, 2023

    2,656,296     $ 6.30     $ 16.80     $ 9.49       1.7  

Expired warrants

    (21,450 )   $ 16.80     $ 16.80     $ 16.80        

Balance at March 31, 2023

    2,634,846     $ 6.30     $ 16.80     $ 9.43       1.4  

Exercisable at March 31, 2023

    2,634,846     $ 6.30     $ 16.80     $ 9.43       1.4  
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.23.1
Note 4 - Equity (Tables)
3 Months Ended
Mar. 31, 2023
Notes Tables  
Share-based Payment Arrangement, Expensed, Amount [Table Text Block]
   

Three Months Ended March 31,

 
   

2023

   

2022

 

General and administrative

  $ 369     $ 361  

Research and development

    130       166  

Total stock-based compensation expense

  $ 499     $ 527  
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.23.1
Note 6 - Commitments and Contingencies (Tables)
3 Months Ended
Mar. 31, 2023
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended March 31,

 
  

2023

  

2022

 

Lease cost:

        

Operating lease cost

 $33  $29 

Variable lease cost

  7   7 

Total

 $40  $36 
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.23.1
Note 1 - Nature of Business (Details Textual)
Mar. 31, 2023
Number of Core Drug Technologies 3
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.23.1
Note 2 - Basis of Presentation, Principles of Consolidation, Significant Accounting Policies and Liquidity (Details Textual)
$ in Thousands, shares in Millions
3 Months Ended
Mar. 31, 2023
USD ($)
shares
Mar. 31, 2022
USD ($)
shares
Dec. 31, 2022
USD ($)
Number of Operating Segments 1    
Net Income (Loss) Attributable to Parent $ (7,915) $ (6,867)  
Net Cash Provided by (Used in) Operating Activities (6,017) $ (4,805)  
Retained Earnings (Accumulated Deficit) (109,750)   $ (101,835)
Cash and Cash Equivalents, at Carrying Value $ 37,265   $ 43,145
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares 6.2 4.8  
General and Administrative Expense [Member]      
Legal Fees $ 500 $ 100  
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.23.1
Note 2 - Basis of Presentation, Principles of Consolidation, Significant Accounting Policies and Liquidity - Schedule of Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Warrant Liability Long Term [Member]    
Balance $ 77  
Change in fair value - net (39)  
Balance 38  
Fair Value, Recurring [Member] | Warrant Liability [Member]    
Fair value of warrant liability 38 $ 77
Fair Value, Recurring [Member] | Warrant Liability [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair value of warrant liability 0 0
Fair Value, Recurring [Member] | Warrant Liability [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair value of warrant liability 0 0
Fair Value, Recurring [Member] | Warrant Liability [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair value of warrant liability $ 38 $ 77
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.23.1
Note 3 - Warrants (Details Textual) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Share-Based Payment Arrangement, Expense $ 499,000 $ 527,000  
Equity Classified Warrants [Member]      
Class of Warrant or Right, Outstanding (in shares) 646,501   646,501
Class of Warrant or Right, Vested and Exercisable (in shares) 404,434   400,859
Share-Based Payment Arrangement, Expense $ 46,000 $ 83,000  
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 391,000    
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.23.1
Note 3 - Warrants - Assumptions Used (Details)
Mar. 31, 2023
Dec. 31, 2022
Minimum [Member] | Measurement Input, Risk Free Interest Rate [Member]    
Warrants, assumptions 0.040 0.042
Minimum [Member] | Measurement Input, Price Volatility [Member]    
Warrants, assumptions 0.584 0.631
Minimum [Member] | Measurement Input, Expected Term [Member]    
Warrants, assumptions 0.1 0.1
Maximum [Member] | Measurement Input, Risk Free Interest Rate [Member]    
Warrants, assumptions 0.049 0.048
Maximum [Member] | Measurement Input, Price Volatility [Member]    
Warrants, assumptions 0.676 0.763
Maximum [Member] | Measurement Input, Expected Term [Member]    
Warrants, assumptions 2.4 2.6
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.23.1
Note 3 - Warrants - Warrant Activity (Details) - Liability Classified Warrants [Member] - $ / shares
3 Months Ended 12 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Balance (in shares) 2,656,296  
Balance, weighted average remaining contractual life (Year) 1 year 4 months 24 days 1 year 8 months 12 days
Expired warrants (in shares) (21,450)  
Expired warrants (in dollars per share) $ 16.80  
Balance (in shares) 2,634,846 2,656,296
Exercisable (in shares) 2,634,846  
Exercisable, weighted average remaining contractual life (Year) 1 year 4 months 24 days  
Minimum [Member]    
Balance, warrant exercise price (in dollars per share) $ 6.30  
Balance, warrant exercise price (in dollars per share) 6.30 $ 6.30
Exercisable, warrant exercise price (in dollars per share) 6.30  
Maximum [Member]    
Balance, warrant exercise price (in dollars per share) 16.80  
Balance, warrant exercise price (in dollars per share) 16.80 16.80
Exercisable, warrant exercise price (in dollars per share) 16.80  
Weighted Average [Member]    
Balance, warrant exercise price (in dollars per share) 9.49  
Expired warrants (in dollars per share) 16.80  
Balance, warrant exercise price (in dollars per share) 9.43 $ 9.49
Exercisable, warrant exercise price (in dollars per share) $ 9.43  
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.23.1
Note 4 - Equity (Details Textual) - USD ($)
1 Months Ended 3 Months Ended
Apr. 30, 2023
Mar. 31, 2023
Mar. 31, 2023
Mar. 31, 2022
Proceeds from Issuance of Common Stock     $ 141,000 $ 0
Stock Issued During Period, Value, New Issues     $ 141,000  
The 2015 Stock Plan [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)   752,296 752,296  
WPD Pharmaceuticals [Member] | License Termination [Member]        
Stock Issued During Period, Shares, New Issues (in shares)   822,115 822,115  
Payment, Related to Termination Clause     $ 700,000  
Stock Issued During Period, Value, New Issues   $ 800,000 $ 800,000  
Lincoln Park Transaction [Member]        
Stock Issued During Period, Shares, New Issues (in shares)     150,381  
Proceeds from Issuance of Common Stock     $ 100,000  
Purchase Agreement, Common Stock, Available Amount   $ 19,800,000 $ 19,800,000  
Lincoln Park Transaction [Member] | Subsequent Event [Member]        
Stock Issued During Period, Shares, New Issues (in shares) 75,187      
Proceeds from Issuance of Common Stock $ 100,000      
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$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Share-Based Payment Arrangement, Expense $ 499 $ 527
General and Administrative Expense [Member]    
Share-Based Payment Arrangement, Expense 369 361
Research and Development Expense [Member]    
Share-Based Payment Arrangement, Expense $ 130 $ 166
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Note 5 - Income Taxes (Details Textual) - USD ($)
Pure in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Income Tax Expense (Benefit) $ 0 $ 0
Effective Income Tax Rate Reconciliation, Percent 0.00% 0.00%
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Note 6 - Commitments and Contingencies (Details Textual) - USD ($)
1 Months Ended 3 Months Ended
Apr. 30, 2023
Mar. 31, 2023
Feb. 28, 2022
Mar. 31, 2023
Mar. 31, 2022
Sublease Income       $ 12,000 $ 10,000
Operating Lease, Payments       38,000 35,000
License Agreements Expense       64,000 76,000
Research and Development Expense       5,687,000 4,620,000
Stock Issued During Period, Value, New Issues       141,000  
MD Anderson [Member] | Sponsored Research [Member]          
Research and Development Expense       155,000 187,000
MD Anderson [Member] | Subsequent Event [Member]          
Payments For Research And Development Agreement $ 700,000        
WPD Pharmaceuticals [Member] | License Termination [Member]          
Payments for Termination of Commitment   $ 700,000      
Stock Issued During Period, Value, New Issues   $ 800,000   $ 800,000  
Stock Issued During Period, Shares, New Issues (in shares)   822,115   822,115  
Exploration Invest Pte Ltd. (Exploration) [Member]          
Payments for Termination of Commitment     $ 400,000    
License Terminations Expense       $ 1,500,000 400,000
Houston Pharmaceuticals, Inc [Member]          
Related Party Transaction, Amounts of Transaction       $ 59,000 $ 59,000
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Note 6 - Commitments and Contingencies - Lease Cost (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Operating lease cost $ 33 $ 29
Variable lease cost 7 7
Total $ 40 $ 36
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Note 7 - Subsequent Events (Details Textual) - Subsequent Event [Member]
May 05, 2023
$ / shares
NASDAQ Compliance, Minimum Closing Bid Price Per Share (in dollars per share) $ 1.00
NASDAQ Compliance, Extension Period (Day) 180 days
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0001659617 mbrx:MDAndersonMember mbrx:SponsoredResearchMember 2023-01-01 2023-03-31 0001659617 mbrx:MDAndersonMember mbrx:SponsoredResearchMember 2022-01-01 2022-03-31 0001659617 mbrx:WPDPharmaceuticalsMember mbrx:LicenseTerminationMember 2023-03-01 2023-03-31 0001659617 mbrx:ExplorationInvestPteLtdExplorationMember 2022-02-01 2022-02-28 0001659617 mbrx:ExplorationInvestPteLtdExplorationMember 2023-01-01 2023-03-31 0001659617 mbrx:ExplorationInvestPteLtdExplorationMember 2022-01-01 2022-03-31 0001659617 us-gaap:SubsequentEventMember 2023-05-05 0001659617 us-gaap:SubsequentEventMember 2023-05-05 2023-05-05 shares thunderdome:item iso4217:USD iso4217:USD shares pure utr:Y utr:D 0001659617 Moleculin Biotech, Inc. false --12-31 Q1 2023 0.001 0.001 5000000 5000000 0 0 0 0 0.001 0.001 100000000 100000000 29600323 29600323 28627827 28627827 3 1 0 0 0 59000 10-Q true 2023-03-31 false 001-37758 DE 47-4671997 5300 Memorial Drive, Suite 950 Houston TX 77007 713 300-5160 Yes Yes true Non-accelerated Filer false false Common Stock, par value $0.001 per share MBRX NASDAQ 29675510 37265000 43145000 2024000 2451000 39289000 45596000 244000 275000 11148000 11148000 381000 403000 51062000 57422000 1939000 2095000 3093000 2724000 5032000 4819000 308000 335000 38000 77000 5378000 5231000 0 0 30000 29000 155396000 153985000 8000 12000 -109750000 -101835000 45684000 52191000 51062000 57422000 0 0 5687000 4620000 2637000 2422000 30000 32000 8354000 7074000 -8354000 -7074000 -39000 -160000 8000 5000 392000 42000 -7915000 -6867000 -0.28 -0.24 28749974 28578338 -7915000 -6867000 -4000 12000 -7919000 -6855000 -7915000 -6867000 30000 32000 499000 527000 772000 0 -39000 -160000 110000 90000 -427000 -438000 -156000 860000 255000 275000 -6017000 -4805000 -0 6000 0 -6000 141000 0 141000 0 -4000 12000 -5880000 -4799000 43145000 70903000 37265000 66104000 28627827 29000 153985000 -101835000 12000 52191000 150381 0 141000 0 0 141000 822115 1000 771000 0 0 772000 0 499000 0 0 499000 0 0 -7915000 0 -7915000 0 0 0 -4000 -4000 29600323 30000 155396000 -109750000 8000 45684000 28578338 29000 151733000 -72810000 41000 78993000 0 527000 0 0 527000 0 0 -6867000 0 -6867000 0 0 0 12000 12000 28578338 29000 152260000 -79677000 53000 72665000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><em style="font: inherit;">1.</em> Nature of Business</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The terms "MBI" or "the Company", "we", "our", and "us" are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in <em style="font: inherit;"> July 2015, </em>with clinical programs for hard-to-treat cancers and viruses. The Company has <span style="-sec-ix-hidden:c98008372">three</span> core technologies, each of which have had <em style="font: inherit;">one</em> or more drugs successfully complete a Phase <em style="font: inherit;">1</em> clinical trial, based substantially on discoveries made at and licensed from The University of Texas System on behalf of the MD Anderson Cancer Center (MD Anderson) in Houston, Texas. The Company has <em style="font: inherit;">two</em> wholly owned subsidiaries, Moleculin Australia Pty. Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe. The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials. The physician-sponsored trials utilize primarily external funds, such as grant funds, which are <em style="font: inherit;">not</em> presented in these financial statements. The Company does <em style="font: inherit;">not</em> have manufacturing facilities and all manufacturing activities are contracted out to <em style="font: inherit;">third</em> parties. Additionally, the Company does <em style="font: inherit;">not</em> have a sales organization. The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><em style="font: inherit;">2.</em> Basis of presentation, principles of consolidation, and significant accounting policies and liquidity </b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Basis of Presentation – Condensed Consolidated Financial Information -</b> The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form <em style="font: inherit;">10</em>-Q and Article <em style="font: inherit;">8</em> of Regulation S-<em style="font: inherit;">X.</em> Accordingly, they do <em style="font: inherit;">not</em> include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are <em style="font: inherit;">not</em> necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of <em style="font: inherit;"> December 31, 2022</em> and for the year then ended, including the notes thereto contained in the Form <em style="font: inherit;">10</em>-K filed with the SEC on <em style="font: inherit;"> March 22, 2023.</em></p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p><p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Principles of Consolidation</b> - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in <span style="-sec-ix-hidden:c98008394">one</span> operating segment. All material long-lived assets of the Company reside in the U.S.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Significant Accounting Policies </b>- The Company's significant accounting policies are described in Note <em style="font: inherit;">2,</em> <i>Basis of Presentation, principles of consolidation and significant accounting policies</i>, to the consolidated financial statements included in the Company's Annual Report on Form <em style="font: inherit;">10</em>-K for the year ended <em style="font: inherit;"> December 31, 2022</em>. There have been <em style="font: inherit;">no</em> material changes to the significant accounting policies during the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em>.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Use of Estimates -</b> The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors <em style="font: inherit;"> may </em>affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often <em style="font: inherit;"> may </em>yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process <em style="font: inherit;"> may </em>result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:18pt;"> </p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:18pt;"/> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: justify; text-indent: 36pt; "><b/></p><p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: justify; text-indent: 36pt; "><b>Liquidity and Financial Condition</b> - The Company is an early stage company and has <em style="font: inherit;">not</em> generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em> and <em style="font: inherit;">2022</em>, the Company incurred net losses <span style="background-color:#ffffff;">of </span>$7.9<span style="background-color:#ffffff;"> million </span>and $6.9 million, respectively, and had net cash flows used in operating activities o<span style="background-color:#ffffff;">f </span>$6.0<span style="background-color:#ffffff;"> million a</span>nd $4.8 million, respectively. At <em style="font: inherit;"> March 31, 2023</em>, the Company had an accumulated deficit o<span style="background-color:#ffffff;">f </span>$109.8<span style="background-color:#ffffff;"> million and cash and cash equivalents of </span>$37.3<span style="background-color:#ffffff;"> million. T</span>he Company expects its cash on hand as of <em style="font: inherit;"> March 31, 2023</em> will be sufficient to fund the Company's operations beyond the near term. Such projections are subject to changes in the Company’s internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity. The Company does <em style="font: inherit;">not</em> expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the development of its core technologies to the point of generating revenue, most likely via out-licensing, and continues to invest in research and development for additional applications of the Company's core technologies and potentially increase its pipeline of drug candidates. If the Company needs to raise additional capital in order to continue to execute its business plan, there is <em style="font: inherit;">no</em> assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital could adversely impact the Company's ability to achieve its intended business objectives and meet its financial obligations as they become due and payable. In <em style="font: inherit;"> March 2022, </em>the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (<em style="font: inherit;">none</em> of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-<em style="font: inherit;">19.</em> The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is <em style="font: inherit;">not</em> aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does <em style="font: inherit;">not</em> mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC <em style="font: inherit;"> may </em>take following the conclusion of the investigation. During the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, the Company has expensed approximately<span style="background-color:#ffffff;"> $0.5 million </span>and $0.1 million, respectively, in related general and administrative fees and expenses.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt 0pt 0pt 8pt;"><b style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: justify; text-indent: 36pt;"> </b></p><p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt 0pt 0pt 8pt;"><b style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: justify; text-indent: 36pt;"/></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Cash and Cash Equivalents</b> - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at <em style="font: inherit;">one</em> financial institution in the U.S., which at times, <em style="font: inherit;"> may </em>exceed the Federal Deposit Insurance Corporation’s limit. The Company has <em style="font: inherit;">not</em> experienced any losses from cash balances in excess of the insurance limit. The Company’s management does <em style="font: inherit;">not</em> believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. </p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p><p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Fair Value of Financial Instruments - </b>The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a <em style="font: inherit;">three</em>-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level <em style="font: inherit;">1</em>) and lowest priority to unobservable inputs (Level <em style="font: inherit;">3</em>).</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Level <em style="font: inherit;">1</em> – Unadjusted quoted prices in active markets of identical assets or liabilities.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Level <em style="font: inherit;">2</em> – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Level <em style="font: inherit;">3</em> – Unobservable inputs for the asset or liability.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note <em style="font: inherit;">3.</em></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The following table provides the financial liabilities reported at fair value and measured on a recurring basis at <em style="font: inherit;"> March 31, 2023</em> and <em style="font: inherit;"> December 31, 2022</em> (table in thousands): </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 52%; border-bottom: thin solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;"><b>Description</b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Fair Value</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0); width: 0%; padding: 0px;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 1</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 2</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 3</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Fair value of warrant liability as of March 31, 2023:</p> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">38</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">38</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Fair value of warrant liability as of December 31, 2022:</p> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">77</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">77</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The table below of Level <em style="font: inherit;">3</em> liabilities (table in thousands) begins with the valuation as of the beginning of the <em style="font: inherit;">first</em> quarter and then is adjusted for changes in fair value that occurred during the <em style="font: inherit;">first</em> quarter. The ending balance of the Level <em style="font: inherit;">3</em> financial instrument presented above represents the Company's best estimates and <em style="font: inherit;"> may </em><em style="font: inherit;">not</em> be substantiated by comparison to independent markets and, in many cases, could <em style="font: inherit;">not</em> be realized in immediate settlement of the instruments.<i> </i></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; width: 85%; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;"><b>Three Months Ended March 31, 2023</b></p> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">Warrant Liability Long-Term</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Balance, December 31, 2022</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">77</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Change in fair value - net</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid black;"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid black;">(39</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">)</td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Balance, March 31, 2023</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">38</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p><p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Loss Per Common Share</b> - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, approximatel<span style="background-color:#ffffff;">y 6.2 million and 4.8 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect. </span></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b/></p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Subsequent Events -</b> The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note <em style="font: inherit;">7</em> - Subsequent Events. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"/> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt; "><b/></p><p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt; "><b>Recent Accounting Pronouncements </b>- There are <em style="font: inherit;">no</em> recently issued accounting standards updates that are currently expected to have a material impact on the Company. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"/> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Basis of Presentation – Condensed Consolidated Financial Information -</b> The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form <em style="font: inherit;">10</em>-Q and Article <em style="font: inherit;">8</em> of Regulation S-<em style="font: inherit;">X.</em> Accordingly, they do <em style="font: inherit;">not</em> include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are <em style="font: inherit;">not</em> necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of <em style="font: inherit;"> December 31, 2022</em> and for the year then ended, including the notes thereto contained in the Form <em style="font: inherit;">10</em>-K filed with the SEC on <em style="font: inherit;"> March 22, 2023.</em></p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Principles of Consolidation</b> - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in <span style="-sec-ix-hidden:c98008394">one</span> operating segment. All material long-lived assets of the Company reside in the U.S.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Significant Accounting Policies </b>- The Company's significant accounting policies are described in Note <em style="font: inherit;">2,</em> <i>Basis of Presentation, principles of consolidation and significant accounting policies</i>, to the consolidated financial statements included in the Company's Annual Report on Form <em style="font: inherit;">10</em>-K for the year ended <em style="font: inherit;"> December 31, 2022</em>. There have been <em style="font: inherit;">no</em> material changes to the significant accounting policies during the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em>.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Use of Estimates -</b> The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors <em style="font: inherit;"> may </em>affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often <em style="font: inherit;"> may </em>yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process <em style="font: inherit;"> may </em>result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:18pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: justify; text-indent: 36pt; "><b>Liquidity and Financial Condition</b> - The Company is an early stage company and has <em style="font: inherit;">not</em> generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em> and <em style="font: inherit;">2022</em>, the Company incurred net losses <span style="background-color:#ffffff;">of </span>$7.9<span style="background-color:#ffffff;"> million </span>and $6.9 million, respectively, and had net cash flows used in operating activities o<span style="background-color:#ffffff;">f </span>$6.0<span style="background-color:#ffffff;"> million a</span>nd $4.8 million, respectively. At <em style="font: inherit;"> March 31, 2023</em>, the Company had an accumulated deficit o<span style="background-color:#ffffff;">f </span>$109.8<span style="background-color:#ffffff;"> million and cash and cash equivalents of </span>$37.3<span style="background-color:#ffffff;"> million. T</span>he Company expects its cash on hand as of <em style="font: inherit;"> March 31, 2023</em> will be sufficient to fund the Company's operations beyond the near term. Such projections are subject to changes in the Company’s internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity. The Company does <em style="font: inherit;">not</em> expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the development of its core technologies to the point of generating revenue, most likely via out-licensing, and continues to invest in research and development for additional applications of the Company's core technologies and potentially increase its pipeline of drug candidates. If the Company needs to raise additional capital in order to continue to execute its business plan, there is <em style="font: inherit;">no</em> assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital could adversely impact the Company's ability to achieve its intended business objectives and meet its financial obligations as they become due and payable. In <em style="font: inherit;"> March 2022, </em>the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (<em style="font: inherit;">none</em> of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID-<em style="font: inherit;">19.</em> The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is <em style="font: inherit;">not</em> aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does <em style="font: inherit;">not</em> mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC <em style="font: inherit;"> may </em>take following the conclusion of the investigation. During the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, the Company has expensed approximately<span style="background-color:#ffffff;"> $0.5 million </span>and $0.1 million, respectively, in related general and administrative fees and expenses.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt 0pt 0pt 8pt;"><b style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: justify; text-indent: 36pt;"> </b></p> -7900000 -6900000 -6000000.0 -4800000 -109800000 37300000 500000 100000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Cash and Cash Equivalents</b> - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at <em style="font: inherit;">one</em> financial institution in the U.S., which at times, <em style="font: inherit;"> may </em>exceed the Federal Deposit Insurance Corporation’s limit. The Company has <em style="font: inherit;">not</em> experienced any losses from cash balances in excess of the insurance limit. The Company’s management does <em style="font: inherit;">not</em> believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. </p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Fair Value of Financial Instruments - </b>The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a <em style="font: inherit;">three</em>-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level <em style="font: inherit;">1</em>) and lowest priority to unobservable inputs (Level <em style="font: inherit;">3</em>).</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Level <em style="font: inherit;">1</em> – Unadjusted quoted prices in active markets of identical assets or liabilities.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Level <em style="font: inherit;">2</em> – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Level <em style="font: inherit;">3</em> – Unobservable inputs for the asset or liability.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note <em style="font: inherit;">3.</em></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The following table provides the financial liabilities reported at fair value and measured on a recurring basis at <em style="font: inherit;"> March 31, 2023</em> and <em style="font: inherit;"> December 31, 2022</em> (table in thousands): </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 52%; border-bottom: thin solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;"><b>Description</b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Fair Value</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0); width: 0%; padding: 0px;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 1</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 2</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 3</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Fair value of warrant liability as of March 31, 2023:</p> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">38</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">38</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Fair value of warrant liability as of December 31, 2022:</p> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">77</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">77</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The table below of Level <em style="font: inherit;">3</em> liabilities (table in thousands) begins with the valuation as of the beginning of the <em style="font: inherit;">first</em> quarter and then is adjusted for changes in fair value that occurred during the <em style="font: inherit;">first</em> quarter. The ending balance of the Level <em style="font: inherit;">3</em> financial instrument presented above represents the Company's best estimates and <em style="font: inherit;"> may </em><em style="font: inherit;">not</em> be substantiated by comparison to independent markets and, in many cases, could <em style="font: inherit;">not</em> be realized in immediate settlement of the instruments.<i> </i></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; width: 85%; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;"><b>Three Months Ended March 31, 2023</b></p> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">Warrant Liability Long-Term</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Balance, December 31, 2022</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">77</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Change in fair value - net</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid black;"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid black;">(39</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">)</td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Balance, March 31, 2023</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">38</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 52%; border-bottom: thin solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;"><b>Description</b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Fair Value</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0); width: 0%; padding: 0px;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 1</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 2</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Level 3</em></b></p> </td><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Fair value of warrant liability as of March 31, 2023:</p> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">38</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 3px double black;">38</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Fair value of warrant liability as of December 31, 2022:</p> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">77</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">—</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">77</td><td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; width: 85%; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;"><b>Three Months Ended March 31, 2023</b></p> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">Warrant Liability Long-Term</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Balance, December 31, 2022</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;">77</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Change in fair value - net</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid black;"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid black;">(39</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">)</td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Balance, March 31, 2023</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">38</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> 38000 0 0 38000 77000 0 0 77000 77000 -39000 38000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Loss Per Common Share</b> - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, approximatel<span style="background-color:#ffffff;">y 6.2 million and 4.8 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect. </span></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> 6200000 4800000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Subsequent Events -</b> The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note <em style="font: inherit;">7</em> - Subsequent Events. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt; "><b>Recent Accounting Pronouncements </b>- There are <em style="font: inherit;">no</em> recently issued accounting standards updates that are currently expected to have a material impact on the Company. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"><b><em style="font: inherit;">3.</em> Warrants</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt; background-color: rgba(0, 0, 0, 0); color: rgb(0, 0, 0);"><b>Liability Classified Warrants</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on <em style="font: inherit;">zero</em> coupon U.S. Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Only the volatility of the Company's own stock is used in the Black-Scholes option pricing model. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows:</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tbody> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="1" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 14%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">March 31, 2023</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="1" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 14%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">December 31, 2022</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Risk-free interest rate</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">4.0% to 4.9%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">4.2% to 4.8%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Volatility</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">58.4% to 67.6%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">63.1% to 76.3%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Expected life (years)</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">0.1 to 2.4</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">0.1 to 2.6</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Dividend yield</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; text-align: center;"> <p style="margin-top: 0pt; margin-bottom: 0pt"><em style="font: inherit;">—%</em></p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; text-align: center;"> <p style="margin-top: 0pt; margin-bottom: 0pt"><em style="font: inherit;">—%</em></p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </tbody> </table> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt;">A summary of the Company's liability classified warrant activity during the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em> and related information follows: </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tbody> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Number of Shares</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="6" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 9%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;"><em style="font: inherit;">Range of Warrant Exercise</em></em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Weighted Average</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Weighted Average Remaining Contractual</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Under Warrant</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="6" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 9%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;"><em style="font: inherit;">Price per Share</em></em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Exercise Price</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Life (Years)</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Balance at January 1, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,656,296</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">6.30</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">9.49</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1.7</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; text-indent: 9pt;">Expired warrants</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(21,450</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px;">)</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"><em style="font: inherit;">—</em></td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Balance at March 31, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,634,846</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">6.30</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">9.43</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1.4</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Exercisable at March 31, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,634,846</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">6.30</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">9.43</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1.4</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </tbody> </table> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">For a summary of the changes in fair value associated with the Company's warrant liability for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em>, see Note <em style="font: inherit;">2</em> - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt; "><b>Equity Classified Warrants</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">At <em style="font: inherit;"> March 31, 2023</em>, the Company<span style="background-color:#ffffff;"> had 646,501 eq</span>uity classified warrants outstanding and 404,434 warrants were exercisable. At <em style="font: inherit;"> December 31, 2022</em>, the Company had 646,501 equity classified warrants outstanding and 400,859 warrants were exercisable.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company recorded stock compensation expense for the non-employee consulting agreements o<span style="background-color:#ffffff;">f $46,000</span><span style="background-color:#ffffff;"> a</span>nd $83,000 for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively. At <em style="font: inherit;"> March 31, 2023</em>, there was $391,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tbody> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="1" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 14%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">March 31, 2023</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="1" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 14%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">December 31, 2022</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Risk-free interest rate</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">4.0% to 4.9%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">4.2% to 4.8%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Volatility</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">58.4% to 67.6%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">63.1% to 76.3%</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Expected life (years)</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">0.1 to 2.4</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; text-align: center; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">0.1 to 2.6</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 68%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Dividend yield</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; text-align: center;"> <p style="margin-top: 0pt; margin-bottom: 0pt"><em style="font: inherit;">—%</em></p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; text-align: center;"> <p style="margin-top: 0pt; margin-bottom: 0pt"><em style="font: inherit;">—%</em></p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </tbody> </table> 0.040 0.049 0.042 0.048 0.584 0.676 0.631 0.763 0.1 2.4 0.1 2.6 <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tbody> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Number of Shares</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="6" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 9%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;"><em style="font: inherit;">Range of Warrant Exercise</em></em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Weighted Average</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Weighted Average Remaining Contractual</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Under Warrant</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="6" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 9%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;"><em style="font: inherit;">Price per Share</em></em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Exercise Price</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 1%;"> </td> <td colspan="2" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><em style="font: inherit;">Life (Years)</em></b></p> </td> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Balance at January 1, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,656,296</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">6.30</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">9.49</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1.7</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; text-indent: 9pt;">Expired warrants</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(21,450</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px;">)</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"><em style="font: inherit;">—</em></td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Balance at March 31, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,634,846</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">6.30</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">9.43</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1.4</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; width: 48%;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Exercisable at March 31, 2023</p> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">2,634,846</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">6.30</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 5%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">16.80</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">9.43</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"> </td> <td style="width: 9%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1.4</td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </tbody> </table> 2656296 6.30 16.80 9.49 P1Y8M12D 21450 16.80 16.80 16.80 2634846 6.30 16.80 9.43 P1Y4M24D 2634846 6.30 16.80 9.43 P1Y4M24D 646501 404434 646501 400859 46000 83000 391000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><em style="font: inherit;">4.</em> Equity </b></p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt; "><b>Lincoln Park Equity Line</b></p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt; "> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;">During the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em>, pursuant to the <em style="font: inherit;">2021</em> Lincoln Park purchase agreement, the Company issued to Lincoln Park 150,381 shares of common stock for gross proceeds of $0.1 million and in <em style="font: inherit;"> April 2023, </em>the Company issued an additional 75,187 shares of common stock, resulting in gross proceeds of $0.1 million. The <em style="font: inherit;">2021</em> Lincoln Park Agreement, which has $19.8 million available, terminates in <em style="font: inherit;"> June 2024.</em></p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;"><b>Other Components of Equity</b></p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;">In <em style="font: inherit;"> March 2023, </em>the Company and WPD agreed to terminate the WPD Agreement. Pursuant to the termination, the Company agreed to pay WPD (or its designees) $700,000 in cash and shares of its common stock valued at $800,000. In <em style="font: inherit;"> March 2023, </em>the Company issued 822,115 shares of common stock to WPD (or its designee) to satisfy this commitment. See Note <em style="font: inherit;">6</em> - Commitments and Contingencies.</p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Stock-Based Compensation and Outstanding Awards</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The <em style="font: inherit;">2015</em> Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants. As of <em style="font: inherit;"> March 31, 2023</em>, there wer<span style="background-color:#ffffff;">e 752,296 shar</span>es remaining to be issued under the <em style="font: inherit;">2015</em> Stock Plan. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Stock-based compensation expense for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively, is as follows (table in thousands): </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="6" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;"><em style="font: inherit;">Three Months Ended March 31,</em></em></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2023</em></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2022</em></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">General and administrative</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">369</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">361</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Research and development</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">130</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">166</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Total stock-based compensation expense</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">499</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">527</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> </tr> </tbody> </table> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> 150381 100000 75187 100000 19800000 700000 800000 822115 752296 <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"> <tbody> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="6" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;"><em style="font: inherit;">Three Months Ended March 31,</em></em></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2023</em></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td> <td style="font-family: Times New Roman; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2022</em></b></p> </td> <td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">General and administrative</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">369</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">361</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Research and development</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">130</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> <td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">166</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td> </tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"> <td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Total stock-based compensation expense</p> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">499</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">527</td> <td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> </tr> </tbody> </table> 369000 361000 130000 166000 499000 527000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><em style="font: inherit;">5.</em> Income Taxes  </b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company does <em style="font: inherit;">not</em> expect to pay any significant federal, state, or foreign income taxes in <em style="font: inherit;">2023</em> as a result of the losses recorded during the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023</em> and the additional losses expected for the remainder of <em style="font: inherit;">2023</em> and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than <em style="font: inherit;">not”</em> that some component or all of the benefits of deferred tax assets will <em style="font: inherit;">not</em> be realized. As a result, as of <em style="font: inherit;"> March 31, 2023</em> and <em style="font: inherit;"> December 31, 2022</em> the Company maintained a full valuation allowance for all deferred tax assets.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The Company recorded no income tax provision for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively. The effective tax rate for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em> is <span style="-sec-ix-hidden:c98008580"><span style="-sec-ix-hidden:c98008581">nil</span>.</span> The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section <em style="font: inherit;">162</em>(m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where <em style="font: inherit;">no</em> tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> 0 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><em style="font: inherit;">6.</em> Commitments and Contingencies</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of <em style="font: inherit;"> March 31, 2023</em>.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Lease Obligations Payable</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">The following summarizes quantitative information about the Company's operating leases for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively (table in thousands):</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="6" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;"><em style="font: inherit;">Three Months Ended March 31,</em></em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2023</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2022</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; width: 70%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Lease cost:</p> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Operating lease cost</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">33</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">29</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Variable lease cost</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">7</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">7</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Total</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">40</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">36</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">In <em style="font: inherit;"> June 2022, </em>the Company extended the lab lease until <em style="font: inherit;"> September 30, 2027, </em>with <em style="font: inherit;">no</em> further right or option to renew. The Company recorded approximately<span style="background-color:#ffffff;"> $12,000 and $10,000 i</span>n sublease income from a related party for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases w<span style="background-color:#ffffff;">as $38,000 a</span>nd $35,000 for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><b>Licenses </b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><i><b>MD Anderson - </b></i>Total expenses related to the Company's license agreements with MD Anderson were<span style="background-color:#ffffff;"> $64,000 and $76,000 f</span>or the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><i><b>HPI - </b></i>The Company has <em style="font: inherit;">two</em> agreements with a related party, Houston Pharmaceuticals, Inc. (HPI) with total expenses of <span style="background-color:#ffffff;">$59,000 for </span>each of the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><i><b>Sponsored Research Agreements - </b></i>The Company has a sponsored research agreement with MD Anderson expiring <em style="font: inherit;"> December 31, 2024. </em>In <em style="font: inherit;"> April 2023, </em>the Company entered into an amendment to the Sponsored Research Agreement with MD Anderson for total payment of $0.7 million to support the continuation of the project. In addition, the Company also has Sponsored Research Agreements with other universities, <em style="font: inherit;">one</em> in the US and <em style="font: inherit;">one</em> in Europe. The expenses recognized under the agreements<span style="background-color:#ffffff;"> were $155,000 a</span>nd $187,000 for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"><i><b>License Terminations </b></i></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt; text-indent: 36pt;">Since <em style="font: inherit;"> February 2019, </em>the Company was party to a sublicense agreement with WPD Pharmaceuticals (WPD), pursuant to which it sublicensed to WPD certain intellectual property rights, including rights to Annamycin, its <em style="font: inherit;">WP1122</em> portfolio, and its <em style="font: inherit;">WP1066</em> portfolio (as amended, the “WPD Agreement”). WPD is affiliated with Dr. Waldemar Priebe, the Company's founder. In <em style="font: inherit;"> March 2023, </em>the Company and WPD agreed to terminate the WPD Agreement and agreed to pay WPD (or its designee) $700,000 in cash and shares of its common stock valued at $800,000. In <em style="font: inherit;"> March 2023, </em>the Company issued 822,115 shares of common stock to WPD's designee to satisfy this commitment. With the termination of the WPD Agreement, the Company now has acquired the rights in certain territories previously sub-licensed to WPD to all of its licensed intellectual property, other than the rights related to non-human animals. Additionally, the Company acquired the in-process research and development that WPD has created during the term of the agreement.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">In <em style="font: inherit;"> February 2022, </em>the Company and Exploration Invest Pte Ltd. (Exploration) entered into a license termination agreement pursuant to which the Company agreed to pay Exploration $400,000 to terminate certain License Agreements and extend confidentiality requirements until the <em style="font: inherit;">10</em>-year anniversary of the license termination agreement. Total expenses, reflected in research and development expenses, related to the Company's license terminations were $1.5 million and $0.4 million for the <em style="font: inherit;">three</em> months ended <em style="font: inherit;"> March 31, 2023 </em>and <em style="font: inherit;">2022</em>, respectively.</p> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: Times New Roman; text-indent: 0px;"><tbody><tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="6" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;"><em style="font: inherit;">Three Months Ended March 31,</em></em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2023</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td colspan="2" style="text-align: center; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:center;margin:0pt;"><b><em style="font: inherit;">2022</em></b></p> </td><td style="font-family: Times New Roman; font-size: 10pt; padding-bottom: 1px;"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; width: 70%;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Lease cost:</p> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td><td style="font-family: Times New Roman; font-size: 10pt;"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Operating lease cost</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">33</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0">29</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(204, 238, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> <p style="margin-top: 0pt; margin-bottom: 0pt">Variable lease cost</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">7</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td><td style="width: 1%; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);"> </td><td style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;; font-size: 10pt; padding: 0px; margin: 0px; border-bottom: 1px solid rgb(0, 0, 0);">7</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding: 0; margin: 0"> </td></tr> <tr style="background-color: rgb(255, 255, 255); vertical-align: bottom"><td style="font-family: Times New Roman; font-size: 10pt;"> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; margin-top: 0pt; margin-bottom: 0pt;">Total</p> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">40</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt;"> </td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td><td style="width: 12%; text-align: right; font-family: Times New Roman; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">36</td><td style="width: 1%; font-family: Times New Roman; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td></tr> </tbody></table> 33000 29000 7000 7000 40000 36000 12000 10000 38000 35000 64000 76000 59000 700000 155000 187000 700000 800000 822115 400000 1500000 400000 <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><em style="font: inherit;">7.</em> Subsequent Events</b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">In addition to the subsequent events discussed elsewhere in these notes, see below for a discussion of subsequent events occurring after <em style="font: inherit;"> March 31, 2023</em>.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: justify; text-indent: 36pt;">On<span style="background-color:#ffffff;"> <em style="font: inherit;"> May 5, 2023, </em>the Company received a letter from NASDAQ notifying the Company that for the last <em style="font: inherit;">30</em> consecutive business days the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule <em style="font: inherit;">5550</em>(a)(<em style="font: inherit;">2</em>) (the "Bid Price Rule"). The deficiency letter does <em style="font: inherit;">not</em> result in the immediate delisting of the Company's common stock from the Nasdaq Capital Market. In accordance with Nasdaq Listing Rule <em style="font: inherit;">5810</em>(c)(<em style="font: inherit;">3</em>)(A), the Company has been provided an initial period of 180 calendar days, or until <em style="font: inherit;"> November 1, 2023, </em>to regain compliance with the Bid Price Rule. If, at any time before <em style="font: inherit;"> November 1, 2023, </em>the bid price for the Company's common stock closes at $1.00 or more for a minimum of <em style="font: inherit;">10</em> consecutive business days, the Nasdaq Staff will provide written notification to the Company that it complies with the Bid Price Rule, unless the Staff exercises its discretion to extend this <em style="font: inherit;">10</em> day period pursuant to Nasdaq Listing Rule <em style="font: inherit;">5810</em>(c)(<em style="font: inherit;">3</em>)(G). If the Company is <em style="font: inherit;">not</em> in compliance with the Bid Price Rule by <em style="font: inherit;"> November 1, 2023, </em>the Company <em style="font: inherit;"> may </em>be afforded a <em style="font: inherit;">second</em> <em style="font: inherit;">180</em> calendar day period to regain compliance. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except for the minimum bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency, which <em style="font: inherit;"> may </em>include, if necessary, implementing a reverse stock split. If the Company does <em style="font: inherit;">not</em> regain compliance with the Bid Price Rule by <em style="font: inherit;"> November 1, 2023, </em>and </span>is <em style="font: inherit;">not</em> eligible for an additional compliance period at that time, the Nasdaq Staff will provide written notification to the Company that its common stock <em style="font: inherit;"> may </em>be delisted. The Company would then be entitled to appeal the Nasdaq Staff’s determination to a NASDAQ Listing Qualifications Panel and request a hearing. There can be <em style="font: inherit;">no</em> assurance that, if the Company does appeal a delisting determination by the Nasdaq Staff to the NASDAQ Listing Qualifications Panel, that such appeal would be successful. The Company intends to monitor the closing bid price of its common stock and <em style="font: inherit;"> may</em><i>,</i> if appropriate, consider available options to regain compliance with the Bid Price Rule, which could include effecting a reverse stock split. However, there can be <em style="font: inherit;">no</em> assurance that the Company will be able to regain compliance with the Bid Price Rule.</p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt 0pt 0pt 15pt;text-indent:36pt;"> </p> 1.00 P180D 1.00 EXCEL 43 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( +6 JE8'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " "U@*I6H'BJO>X K @ $0 &1O8U!R;W!S+V-O&ULS9+! M:L,P#(9?9?B>R'%H#R;-I:.G#@8K;.QF;+4UBQ-C:R1]^SE>FS*V!]C1TN]/ MGT"-]E(/ 9_#X#&0Q?@PN:Z/4OL-.Q-Y"1#U&9V*94KTJ7D<@E.4GN$$7ND/ M=4(0G*_!(2FC2,$,+/Q"9&UCM-0!%0WABC=ZP?O/T&68T8 =.NPI0E56P-IY MHK],70-WP PC#"Y^%] LQ%S]$YL[P*[)*=HE-8YC.=8YEW:HX.UI_Y+7+6P? 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