0001558370-22-003427 | 10-Q | XBRL Viewer

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Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 35,161,800	$ 10,150,500
Accounts receivable	5,800
Prepaid expenses and other current assets	750,500	588,800
Total current assets	35,918,100	10,739,300
Property and equipment, net	2,578,800	2,066,000
Other assets	31,200	24,400
Intangible assets, net	41,800
Goodwill	386,000
Total Assets	38,955,900	12,829,700
Current Liabilities:
Accounts payable	927,700	665,200
Accrued expenses and other current liabilities	517,100	334,200
Interest payable		200
Loan payable		105,600
Note payable		362,400
Total current liabilities	1,444,800	1,467,600
Total Liabilities	1,444,800	1,467,600
Commitments and contingencies
Stockholders' Equity:
Common stock, $0.001 par value: 300,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 15,477,518 shares and 7,332,999 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	9,300	1,200
Additional paid-in capital	94,083,200	52,988,700
Accumulated deficit	(56,581,400)	(41,627,800)
Total Stockholders' Equity	37,511,100	11,362,100
Total Liabilities and Stockholders' Equity	$ 38,955,900	$ 12,829,700

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	300,000,000	300,000,000
Common stock, issued	15,477,518	7,332,999
Common stock, outstanding	15,477,518	7,332,999

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Operating expenses:
Research and development	$ 3,486,700	$ 1,225,700	$ 8,030,400	$ 3,526,100
General and administrative	2,655,600	1,190,000	7,040,700	12,109,200
Total operating expenses	6,142,300	2,415,700	15,071,100	15,635,300
Loss from operations	(6,142,300)	(2,415,700)	(15,071,100)	(15,635,300)
Other income (expense)
Gain on loan extinguishment			105,800
Other income	18,000		18,000
Interest expense	(500)		(6,300)
Total other income (expense)	17,500		117,500
Net loss	$ (6,124,800)	$ (2,415,700)	$ (14,953,600)	$ (15,635,300)
Net loss per share, basic	$ (0.40)	$ (0.48)	$ (1.50)	$ (4.39)
Net loss per share, diluted	$ (0.40)	$ (0.48)	$ (1.50)	$ (4.39)
Weighted average common shares outstanding, basic	15,366,075	4,989,269	10,048,170	3,719,132
Weighted average common shares outstanding, diluted	15,366,075	4,989,269	10,048,170	3,719,132

Condensed Consolidated Statements of Stockholders' Equity - USD ($)	Preferred Stock Series A-1 Preferred Stock	Preferred Stock Series B Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Series B Preferred Stock	Total
Balance at beginning of period at Dec. 31, 2019	$ 9,134,700	$ 1,306,900		$ 13,965,000	$ (22,427,600)		$ 1,979,000
Balance at beginning of period (in shares) at Dec. 31, 2019	21,822,301	9,869,659	2,863,812
Issuance of Series B Preferred Stock		$ 331,700					331,700
Issuance of Series B Preferred Stock		6,521,738
Series B Preferred Stock discount amortization		$ 368,400		(368,400)		$ (368,400)
Warrants underlying Series B Preferred Stock issuance				2,668,300			2,668,300
Stock compensation expense				456,000			456,000
Net loss					(1,852,700)		(1,852,700)
Balance at end of period at Mar. 31, 2020	$ 9,134,700	$ 2,007,000		16,720,900	(24,280,300)		3,582,300
Balance at end of period (in shares) at Mar. 31, 2020	21,822,301	16,391,397	2,863,812
Balance at beginning of period at Dec. 31, 2019	$ 9,134,700	$ 1,306,900		13,965,000	(22,427,600)		1,979,000
Balance at beginning of period (in shares) at Dec. 31, 2019	21,822,301	9,869,659	2,863,812
Common stock issuance net of issuance costs and discount amortization (in shares)						16,391,397
Series B Preferred Stock discount amortization						$ (692,700)
Warrants underlying common stock issuance						5,533,000
Net loss							(15,635,300)
Balance at end of period at Sep. 30, 2020	$ 9,134,700	$ 2,331,300		27,525,500	(38,062,900)		928,600
Balance at end of period (in shares) at Sep. 30, 2020	21,822,301	16,391,397	4,989,269
Balance at beginning of period at Mar. 31, 2020	$ 9,134,700	$ 2,007,000		16,720,900	(24,280,300)		3,582,300
Balance at beginning of period (in shares) at Mar. 31, 2020	21,822,301	16,391,397	2,863,812
Series B Preferred Stock discount amortization		$ 324,300		(324,300)		$ (324,300)
Exercise of warrants				4,900			4,900
Exercise of warrants (in shares)			1,399,921
Common stock issuance to employees and non-employees				9,432,000			9,432,000
Common stock issuance to employees and non-employees			725,536
Stock compensation expense				443,000			443,000
Net loss					(11,366,900)		(11,366,900)
Balance at end of period at Jun. 30, 2020	$ 9,134,700	$ 2,331,300		26,276,500	(35,647,200)		2,095,300
Balance at end of period (in shares) at Jun. 30, 2020	21,822,301	16,391,397	4,989,269
Stock compensation expense				1,249,000			1,249,000
Net loss					(2,415,700)		(2,415,700)
Balance at end of period at Sep. 30, 2020	$ 9,134,700	$ 2,331,300		27,525,500	(38,062,900)		928,600
Balance at end of period (in shares) at Sep. 30, 2020	21,822,301	16,391,397	4,989,269
Balance at beginning of period at Dec. 31, 2020			$ 1,200	52,988,700	(41,627,800)		11,362,100
Balance at beginning of period (in shares) at Dec. 31, 2020			7,332,999
Common stock discount amortization				24,700			24,700
Warrants underlying common stock issuance discount amortization				(24,700)			(24,700)
Stock compensation expense				945,200			945,200
Net loss					(3,854,500)		(3,854,500)
Balance at end of period at Mar. 31, 2021			$ 1,200	53,933,900	(45,482,300)		8,452,800
Balance at end of period (in shares) at Mar. 31, 2021			7,332,999
Balance at beginning of period at Dec. 31, 2020			$ 1,200	52,988,700	(41,627,800)		11,362,100
Balance at beginning of period (in shares) at Dec. 31, 2020			7,332,999
Net loss							(14,953,600)
Balance at end of period at Sep. 30, 2021			$ 9,300	94,083,200	(56,581,400)		37,511,100
Balance at end of period (in shares) at Sep. 30, 2021			15,477,518
Balance at beginning of period at Mar. 31, 2021			$ 1,200	53,933,900	(45,482,300)		8,452,800
Balance at beginning of period (in shares) at Mar. 31, 2021			7,332,999
Common stock discount amortization				24,900			24,900
Warrants underlying common stock issuance discount amortization				(24,900)			(24,900)
Exercise of warrants			$ 100	125,300			125,400
Exercised stock options (in shares)			18,891
Released restricted stock units (in shares)			35,610
Stock compensation expense				1,268,600			1,268,600
Net loss					(4,974,300)		(4,974,300)
Balance at end of period at Jun. 30, 2021			$ 1,300	55,327,800	(50,456,600)		4,872,500
Balance at end of period (in shares) at Jun. 30, 2021			7,387,500
Common stock issuance net of issuance costs and discount amortization			$ 8,000	36,144,400			36,152,400
Common stock issuance net of issuance costs and discount amortization (in shares)			8,000,000
Warrants underlying common stock issuance				1,051,200			1,051,200
Warrants underlying common stock issuance discount amortization				(85,500)			(85,500)
Common shares issued for Insilico Solutions LLC Membership Purchase Agreement				400,000			400,000
Common shares issued for Insilico Solutions LLC Membership Purchase Agreement (in shares)			50,189
Restricted stock units issued for Insilico Solutions LLC Membership Purchase Agreement				140,000			140,000
Restricted stock units issued for Insilico Solutions LLC Membership Purchase Agreement (in shares)			33,177
Released restricted stock units (in shares)			6,652
Stock compensation expense				1,105,300			1,105,300
Net loss					(6,124,800)		(6,124,800)
Balance at end of period at Sep. 30, 2021			$ 9,300	$ 94,083,200	$ (56,581,400)		$ 37,511,100
Balance at end of period (in shares) at Sep. 30, 2021			15,477,518

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net loss	$ (14,953,600)	$ (15,635,300)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation	331,200	118,900
Amortization	2,200
Stock compensation expense	3,319,100	11,580,000
Gain on loan extinguishment	(105,800)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	20,200
Prepaid expenses and other current assets	(168,500)	(149,800)
Accounts payable	216,000	398,300
Accrued expenses and other current liabilities	182,900	130,700
Net cash used for operating activities	(11,156,300)	(3,557,200)
Cash flows from investing activities:
Purchases of property and equipment, net of effects from acquisitions	(797,500)	(1,013,100)
Cash received from acquisition	84,000
Net cash used for investing activities	(713,500)	(1,013,100)
Cash flows from financing activities:
Proceeds from issuance of common stock	40,000,000
Issuance costs	(2,881,900)
Exercise of stock options	125,400
Proceeds from warrant exercise		4,900
Proceeds from loan payable		115,600
Loan repayments	(362,400)	(10,000)
Proceeds from Series B Preferred Stock issuance		3,000,000
Net cash (used in) provided by financing activities	36,881,100	3,110,500
Net change in cash and cash equivalents	25,011,300	(1,459,800)
Cash and cash equivalents:
Beginning of year	10,150,500	1,929,100
End of period	35,161,800	469,300
Supplemental disclosures of non-cash investing and financing activities:
Accruals for property and equipment	46,500	130,200
Cash paid for interest on note payable	6,300
Common stock issuance for acquisition	400,000
Restricted stock units granted for acquisition	140,000
Acquisitions net of cash acquired	$ 456,000
Accruals for deferred initial public offering costs		813,000
Warrants underlying Series B Preferred Stock issuance		$ 2,668,300

ORGANIZATION

9 Months Ended

Sep. 30, 2021

ORGANIZATION

ORGANIZATION

KIROMIC BIOPHARMA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.	ORGANIZATION

Nature of Business

Kiromic BioPharma, Inc. and subsidiaries (the "Company") is a clinical stage fully integrated biotherapeutics company formed under the Texas Business Organizations Code in December 2012. On May 27, 2016, the Company converted from a Texas limited liability company into a Delaware corporation and changed its name from Kiromic LLC to Kiromic Inc. On December 16, 2019, the Company amended and restated its certificate of incorporation charter to re-name the company, Kiromic BioPharma, Inc.

The Company is an artificial intelligence-driven, end-to-end CAR-T and gene therapy company, developing the first multi-indication allogeneic CAR-T cell therapy, that exploits the natural potency of Gamma Delta T-cells to target solid cancers. The Company maintains offices in Houston, Texas. The Company has not generated any revenues to date.

In June 2021, the FDA placed the IND applications on clinical hold and asked the Company to address key components regarding the chemical manufacturing and control components of the applications. Those components included tracing of all reagents used in manufacturing, flow chart of manufacturing processes, and Certificate of Analysis. The Company is still working towards addressing each of the FDA’s comments.

Going Concern— These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue from the commercialization of its product candidates. The Company had negative cash flow from operations of $11,156,300 for the nine months ended September 30, 2021, and an accumulated deficit of $56,581,400 as of September 30, 2021. To date, the Company has relied on equity and debt financing to fund its operations. The Company’s product candidates are still in the early stages of development, and substantial additional financing will be needed by the Company to fund its operations and ongoing research and development efforts prior to the commercialization, if any, of its product candidates. The Company does not have sufficient cash on hand or available liquidity to meet its obligations through the twelve months following the date the condensed consolidated financial statements are issued. This condition raises substantial doubt about the Company’s ability to continue as a going concern.

Given its projected operating requirements and its existing cash and cash equivalents, management’s plans include evaluating different strategies to obtain the required funding of future operations. These plans may include, but are not limited to, additional funding from current or new investors. However, there can be no assurance that the Company will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs or on favorable terms. Therefore, the plans cannot be deemed probable of being implemented. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

NIH Grant—In August 2018, the National Institute of Health ("the NIH"), the primary agency of the US government responsible for biomedical and public health research, awarded a Phase I/II grant to the Company in the amount of $2,235,000 for the development and non-clinical testing of a new anti-arteriosclerosis gene therapy delivered by engineered adeno-associated viral vectors. Phase I of the grant entitled the Company to reimbursement for certain salaries and wages, materials and supplies, facilities and administrative costs, and fixed fees. The Company did not complete Phase I by August 2019, but was granted an extension to complete Phase I by the NIH through August 2021. Starting after Phase 1 completion in 2021, Phase II of the grant covers reimbursements for certain salaries and wages, materials and supplies, facilities and administrative costs, and fixed fees of $1,384,000. The Company applied for

another Phase I extension in August 2021, and the extension was not granted. The Company does not expect to be reimbursed for any of the amounts for Phase II.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information (Accounting Standards Codification ("ASC") 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with GAAP. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented.

All intercompany balances were eliminated upon consolidation.

Use of Estimates—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent 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. Significant estimates include determination of the fair value of common stock and related stock-based compensation, warrants to purchase common stock underlying shares of Series B Preferred Stock and Public Offering common stock, and estimating services incurred by third-party service providers used to recognize research and development expense.

Cash and Cash Equivalents—As of September 30, 2021 and December 31, 2020, cash and cash equivalents consisted entirely of cash on hand and bank deposits. The Company considers all highly liquid instruments with remaining maturities at purchase of 90 days or less to be cash equivalents.

Concentrations of Credit Risk and Other Uncertainties—Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. Substantially all of the Company’s cash and cash equivalents were deposited in accounts at a small number of national financial institutions. Account balances may at times exceed federally-insured limits. The Company has not incurred losses related to these cash and cash equivalents deposited at financial institutions and management believes that the Company is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held.

The Company is subject to certain risks and uncertainties from changes in any of the following areas that the Company believes could have a material adverse effect on future financial position or results of operations: the ability to obtain regulatory approval and market acceptance of, and reimbursement for, the Company’s product candidates; the performance of third-party clinical research organizations and manufacturers; protection of the intellectual property; litigation or claims against the Company based on intellectual property, patent, product, regulatory or other factors; the Company’s ability to attract and retain employees necessary to support commercial success; and changes in the industry or customer requirements including the emergence of competitive products with new capabilities.

Deposit—In connection with one of the Company’s facility leases, a deposit is held by the lessor per the terms of the noncancelable agreement. The deposit has been recorded as a long-term asset on the Company’s condensed consolidated balance sheets.

Deferred Initial Public Offering Costs—In the nine months ended September 30, 2020, the Company began incurring costs in connection with the filing of a Registration Statement on Form S-1/A for an initial public offering, which are deferred in other current assets in accordance with ASC 505-10-25 in the condensed consolidated balance sheet. Initial public offering costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital. As of September 30, 2020, $933,100 of deferred costs related to the initial public offering were classified as other current assets on the condensed consolidated balance sheet.

Property and Equipment—Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets ranging from 1 to 8 years. Major replacements and improvements are

capitalized as leasehold improvements, while general repairs and maintenance are expensed as incurred. Estimated useful lives of leasehold improvements are the shorter of the remaining lease term or the estimated useful economic life of the specific asset.

Estimated useful lives of property and equipment are as follows for the major classes of assets:


Asset Description		Estimated Lives
Laboratory Equipment		3 - 8
Leasehold Improvements		1 - 7
Office Furniture, Fixtures, and Equipment		5
Software		3 - 5

Internal Use Software Development Costs—The Company capitalizes certain costs incurred to develop internal use software. All costs incurred that relate to planning and post-implementation phases of development are expensed as incurred. Costs incurred in the development and implementation phases are capitalized and amortized over the estimated life of the software, generally five years. The Company capitalized software development costs of $180,000 and $10,200 for the nine months ended September 30, 2021 and both the nine months ended September 30, 2020 and year ended December 31, 2020, respectively.

Goodwill— In connection with the Insilico Solutions LLC acquisition, the Company recognized goodwill for the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of the business acquired. The Company will review goodwill for impairment annually on November 30, and whenever events or circumstances in interim periods indicate that it is more likely than not that an impairment may have occurred. The Company will continue to monitor results in future periods to determine whether any indicators of impairment exist that would cause us to perform an impairment review.

Intangible Assets—In connection with the Insilico Solutions LLC acquisition, the Company recognized the fair value of non-compete contracts, which are classified as intangible assets. The fair value of intangible assets was determined by the income approach. The income approach of valuation is where an evaluation is conducted as to the potential future income is expected from intangible assets. Then a present value calculation is done on the future income flow, to reach the recognized fair value at the date of purchase.

Subsequently, intangible assets will be amortized over their remaining useful life, which is estimated to be 5 years.

Impairment of Long-Lived Assets—The Company reviews its long-lived assets, including property and equipment, for impairment indicators. If indicators are noted, the Company compares the carrying amount of the asset to its estimated undiscounted cash flows. If the carrying amount exceeds its estimated undiscounted cash flows, an impairment loss is recognized to adjust the long-lived asset to fair value. There have been no impairment losses on the Company’s long-lived assets since inception.

Comprehensive Loss—Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. For all periods presented, there was no difference between net loss and comprehensive loss.

Income Taxes—The Company files federal and state income tax returns, utilizing the accrual basis of accounting. Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and consist of taxes currently due and deferred taxes. Certain transactions of the Company may be subject to accounting methods for income tax purposes, which differ from the accounting methods used in preparing these condensed consolidated financial statements in accordance with GAAP. Accordingly, the net income or loss of the Company reported for income tax purposes may differ from the balances reported for those same items in the accompanying condensed consolidated financial statements.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which such temporary differences are expected to be recovered or settled. The Company records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized.

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) the Company determines whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying condensed consolidated statements of operations. No such interest or penalties were recognized during the three months and nine months ended September 30, 2021 and 2020.

Research and Development Expense—The Company expenses research and development costs as incurred. Research and development expenses include personnel and personnel-related costs, costs associated with the Company’s clinical development activities including costs of outside consultants and contractors, the submission and maintenance of regulatory filings, equipment and supplies used in developing products prior to market approval and an allocation of certain overhead costs such as facility and related expenses.

The Company accrues and expenses costs of services provided by contract research organizations in connection with preclinical studies and contract manufacturing organizations engaged to manufacture clinical trial material, costs of licensing technology, and costs of services provided by research organizations and service providers. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred if the technology is not expected to have any alternative future uses other than the specific research and development project for which it was intended. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed rather than when the payment is made.

Proceeds from Grants—During the three and nine months ended September 30, 2021 and 2020, the Company did not recognize any reductions to research and development expense within the condensed consolidated statements of operations pursuant to its grant from the NIH.

Fair Value Measurements—The carrying value of the Company’s cash and cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to their short-term nature.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2—Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data.

Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

There were no changes in the fair value hierarchy levels during the three and nine months ended September 30, 2021 and 2020.

Nonvested Stock Options and Restricted Stock Units—Pursuant to the Company’s 2017 Stock Incentive Plan (the “2017 Plan”) and the Omnibus 2021 Equity Incentive Plan (the “2021 Plan”), the Company has the ability to issue a

variety of share-based payments and incentives to board members, employees, and non-employees through grants of nonvested stock options and restricted stock units.

The vesting conditions for stock options and restricted stock units include annual and monthly vesting. Annual vesting conditions are for four years. Monthly vesting conditions range from 10 to 48 months. When nonvested options are vested, they become exercisable over a 10-year period from grant date.

The vesting conditions for restricted stock units include cliff vesting conditions. Certain restricted stock units vest with a range of 6 to 12 months following the expiration of employee lock-up agreements. Certain restricted stock units vest based on the later of achievement of key milestones or the expiration of employee lock-up agreements. When nonvested restricted stock units are vested, they are released to the grantee within sixty days.

Stock-Based Compensation—The Company records stock compensation expense related to the 2017 Plan and the 2021 Plan in accordance with ASC 718, Compensation—Stock Compensation. The Company measures and recognizes stock compensation expense for all stock-based awards, including stock options, based on estimated fair values recognized using cliff vesting or the straight-line method over the requisite service period. The fair value of stock options is estimated on the grant date using the Black-Scholes option-valuation model (the “Black-Scholes model”). The calculation of stock-based compensation expense requires that the Company make assumptions and judgments about the variables used in the Black-Scholes model, including the fair value of the Company’s common stock, expected term, expected volatility of the underlying common stock, and risk-free interest rate. Forfeitures are accounted for when they occur.

Until the Company’s common stock became publicly traded, the board of directors’ (“the Board”) approach to estimating the fair value of the Company’s common stock includes utilizing methods outlined in the American Institute of Certified Public Accountants’ Practice Aid, Valuation of Privately- Held Company Equity Securities Issued as Compensation.

The Company estimates the grant-date fair value of stock options using the Black-Scholes model and the assumptions used to value such stock options are determined as follows:

Expected Term. The expected term represents the period that the Company’s stock options are expected to be outstanding. Due to limitations on the sale or transfer of the Company’s common stock under the lock-up agreements and market standoff components of the stock option agreements, the Company does not believe its historical exercise pattern is indicative of the pattern it will experience after restricted periods expire. The Company has previously used the Staff Accounting Bulletin (“SAB”) No. 110, simplified method to calculate the expected term, which is the average of the contractual term and vesting period.

Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes model on the implied yield available on US Treasury zero-coupon issues with a term equivalent to that of the expected term of the stock options for each stock option group.

Volatility. The Company determines the price volatility based on the historical volatilities of industry peers as it has no trading history for its common stock price. The Company intends to continue to consistently apply this process using the same or a similar peer group of public companies, until a sufficient amount of historical information regarding the volatility of its own common stock price becomes available, or unless circumstances change such that the identified peer companies are no longer similar, in which case other suitable peer companies whose common stock prices are publicly available would be utilized in the calculation.

Dividend Yield. The expected dividend assumption is based on the Company’s current expectations about its anticipated dividend policy. To date, the Company has not declared any dividends and, therefore, the Company has used an expected dividend yield of zero.

Common Stock Valuations. During the three and nine months ended September 30, 2021, the closing price listed on the Nasdaq Capital Market for the Company’s common stock on the date of the grant was used as the common stock valuation. During the three and nine months ended September 30, 2020, the Board, with input from management and third-party valuations, determined the fair value of the common stock underlying all stock-based compensation grants. The Company believes that the Board had the relevant experience and expertise to determine the fair value of the Company’s common stock before the Company’s common stock became publicly traded. The board of directors

exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of the Company’s common stock at each grant date. These factors include:

●

valuations of the common stock performed by third-party specialists;

●

the prices, rights, preferences, and privileges of the Company’s Series A-1 Preferred Stock and Series B Preferred Stock relative to those of the Company’s common stock;

●

lack of marketability of the common stock;

●

current business conditions and projections;

●

hiring of key personnel and the experience of management;

●

the Company’s stage of development;

●

likelihood of achieving a liquidity event, such as a follow-on offering, a merger or acquisition of the Company given prevailing market conditions, or other liquidation event;

●

the market performance of comparable publicly traded companies; and

●

the US and global capital market conditions.

In valuing the common stock, the Board determined the equity value of the Company’s business using various valuation methods including combinations of income and market approaches. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate derived from an analysis of the cost of capital of comparable publicly traded companies in the Company’s industry or similar business operations as of each valuation date and is adjusted to reflect the risks inherent in the Company’s cash flows. The market approach references actual transactions involving (i) the subject being valued, or (ii) similar assets and/or enterprises.

For each valuation, the equity value determined by the income and market approaches was then allocated to the common stock using either the option pricing method (“OPM”) or probability—weighted expected return model (“PWERM”).

The option pricing method is based on the Black-Scholes option valuation model, which allows for the identification of a range of possible future outcomes, each with an associated probability. The OPM is appropriate to use when the range of possible future outcomes is difficult to predict and thus creates highly speculative forecasts. In general, while simple in its application, management did not use the OPM approach when considering allocation techniques for the valuation of equity interests in early stage, privately held life science companies. Management determined that applying the OPM would violate the major assumptions of the Black Scholes option valuation model approach. Additionally, the simulation approach can generally be reasonably approximated by a scenario-based approach like the PWERM as described below.

PWERM involves a forward-looking analysis of the possible future outcomes of the enterprise. This method is particularly useful when discrete future outcomes can be predicted at a relatively high confidence level with a probability distribution. Discrete future outcomes considered under the PWERM include an initial public offering, as well as non-initial public offering market-based outcomes. Determining the fair value of the enterprise using the PWERM requires the Company to develop assumptions and estimates for both the probability of an initial public offering liquidity event and stay private outcomes, as well as the values the Company expects those outcomes could yield. From February 2018 to October 2020, the Company has valued its common stock based on a PWERM.

Application of the Company’s approach involves the use of estimates, judgment, and assumptions that are highly complex and subjective, such as those regarding expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact valuations as of each valuation date and may have a material impact on the valuation of the common stock.

For valuations after the completion of an initial public offering, the Board determines the fair value of each share of underlying common stock based on the closing price of the common stock as reported on the date of grant. Future expense amounts for any particular period could be affected by changes in assumptions or market conditions.

Segment Data—The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

Recently Issued Accounting Pronouncements—From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.

In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In July 2018, the FASB issued ASU 2018-11 to amend certain aspects of Topic 842. These amendments provide entities with an additional (and optional) transition method to adopt Topic 842. Under this transition method, an entity initially applies the transition requirements in Topic 842 at that Topic’s effective date with the effects of initially applying Topic 842 recognized as a cumulative effect adjustment to the opening balance of retained earnings (or other components of equity or net assets, as appropriate) in the period of adoption. On October 16, 2019, the FASB changed the effective date of this standard applicable to the Company as an emerging growth company to January 1, 2022. Accordingly, Topic 842 is effective for the Company beginning in the first quarter of 2022. Modified retroactive transition approach will be required for operating leases existing at or entered into after the beginning of the earliest comparative period presented. Though the Company is currently evaluating the potential impact of this standard on its financial position, results of operations, and cash flows, the Company expects that adopting the new standard will result in recording a material lease liability and right-of-use asset associated with the Company’s facility lease agreement and subsequent amendments thereto.

In June 2016, FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). The amendments in ASU 2016-13 affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in ASU 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. On October 16, 2019, the FASB has changed the effective date of this standard applicable to the Company as an emerging growth company to January 1, 2023. The Company is currently evaluating the potential impact of this standard on its financial position, results of operations, and cash flows.

NET LOSS PER SHARE OF COMMON STOCK

9 Months Ended

Sep. 30, 2021

NET LOSS PER COMMON SHARE

NET LOSS PER SHARE OF COMMON STOCK

3.NET LOSS PER SHARE OF COMMON STOCK

Basic and diluted net loss per share of common stock is determined by dividing net loss less deemed dividends by the weighted-average shares of common stock outstanding during the period. For all periods presented, the shares of common stock underlying the stock options, restricted stock units, convertible Series A-1 Preferred Stock, and the convertible Series B Preferred Stock have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares of common stock outstanding used to calculate both basic and diluted loss per share of common stock are the same. The following table illustrates the computation of basic and diluted earnings per share:


	Three Months Ended				Nine Months Ended
	September 30,				September30,
	2021		2020		2021		2020
Net loss	$	(6,124,800)	$	(2,415,700)	$	(14,953,600)	$	(15,635,300)
Less: Series B Preferred Stock discount amortization		—		—		—		(692,700)
Less: Initial Public Offering Common Stock discount amortization		(25,200)		—		(74,800)		—
Less: Public Offering Common Stock discount amortization		(60,300)		—		(60,300)		—
Net loss attributable to common shareholders, basic and diluted	$	(6,210,300)	$	(2,415,700)	$	(15,088,700)	$	(16,328,000)
Weighted average common shares outstanding, basic and diluted		15,366,075		4,989,269		10,048,170		3,719,132
Net loss per common share, basic and diluted	$	(0.40)	$	(0.48)	$	(1.50)	$	(4.39)

Subsequent to the issuance of the June 30, 2021 condensed consolidated financial statements, the Company identified an error related to the calculation of net loss per share for the three months ended September 30, 2020. The Company used an incorrect calculation of weighted average shares outstanding during that period to calculate net loss per share. Accordingly, the Company restated the weighted average shares outstanding calculation for the three months ended September 30, 2020 from 3,719,132 shares to 4,989,269 shares and the resulting net loss per share calculation from $(0.65) to $(0.48) per share on the condensed consolidated statement of operations and the related footnote. The Company has evaluated the materiality of this error and concluded that it is not material to the prior period.

For the nine months ended September 30, 2021 and 2020, potentially dilutive securities excluded from the computations of diluted weighted-average shares of common stock outstanding were:


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021	2020	2021	2020
Options to purchase	—	1,484	—	1,484
Restricted Stock Units	6,698	36,368	73,366	36,368
Series A‑1 Preferred Stock	—	624,594	—	624,594
Series B Preferred Stock	—	496,136	—	452,378
Total	6,698	1,158,582	73,366	1,114,824

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2021

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

4.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of September 30, 2021 and December 31, 2020:


	September 30,		December 31,
	2021		2020
Equipment	$	1,586,500	$	780,500
Leasehold improvements		1,403,300		1,229,700
Office furniture, fixtures, and equipment		16,600		16,600
Software		331,700		151,700
Construction in progress		133,600		449,200
		3,471,700		2,627,700
Less: Accumulated depreciation		(892,900)		(561,700)
Total	$	2,578,800	$	2,066,000

Depreciation expense was $128,800 and $50,400 for the three months ended September 30, 2021 and 2020, respectively, and $331,200 and $118,900 for the nine months ended September 30, 2021 and 2020, respectively. Depreciation expense is allocated between research and development and general and administrative operating expenses on the condensed consolidated statements of operations.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2021

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

5.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following as of September 30, 2021, and December 31, 2020:


	September 30,		December 31,
	2021		2020
Accrued consulting and outside services	$	385,700	$	143,200
Accrued compensation		131,400		191,000
Total	$	517,100	$	334,200

LOAN PAYABLE

9 Months Ended

Sep. 30, 2021

LOAN PAYABLE

LOAN PAYABLE

6.LOAN PAYABLE

On May 1, 2020, the Company received a loan in the principal amount of $115,600 (the “SBA Loan”) under the Paycheck Protection Program (“PPP”), which was established under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (the “SBA”). The intent and purpose of the PPP is to support companies, during the COVID-19 pandemic, by providing funds for certain specified business expenses, with a focus on payroll. As a qualifying business as defined by the SBA, the Company is using the proceeds from this loan to primarily help maintain its payroll. The term of the SBA Loan promissory note (“the Note”) is two years, though it may be payable sooner in connection with an event of default under the Note. The SBA Loan carries a fixed interest rate of one percent per year, with the first payment due seven months from the date of initial cash receipt. Under the CARES Act and the PPP, certain amounts of loans made under the PPP may be forgiven if the recipients use the loan proceeds for eligible purposes, including payroll costs and certain rent or utility costs, and meet other requirements regarding, among other things, the maintenance of employment and compensation levels. The Company intends to use the SBA Loan for qualifying expenses and to apply for forgiveness of the SBA Loan in accordance with the terms of the CARES Act.

The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, materially false or misleading representations to the SBA, and adverse changes in the Company’s financial condition or business operations that may materially affect its ability to pay the SBA Loan.

As the legal form of the Note is a debt obligation, the Company accounts for it as debt under ASC 470, Debt, and recorded $105,600 as of December 31, 2020, in the condensed consolidated balance sheet. During the year ended December 31, 2020, the Company received initial proceeds of $115,600 and made a repayment of $10,000 on the SBA Loan, bringing the balance to $105,600 as of December 31, 2020. The Company accrued interest over the term of the

loan and did not impute additional interest at a market rate because the guidance on imputing interest in ASC 835-30, Interest, excludes transactions where interest rates are prescribed by a government agency.

During the year ended December 31, 2020, the Company applied for forgiveness of the SBA Loan in accordance with the terms of the CARES Act. On February 16, 2021, the SBA granted forgiveness of the SBA Loan and all applicable interest. On the date of forgiveness, the principal and accrued interest totaled $105,800. The forgiveness was classified as a gain on loan extinguishment in the condensed consolidated statement of operations.

NOTE PAYABLE

9 Months Ended

Sep. 30, 2021

NOTE PAYABLE

NOTE PAYABLE

7.NOTE PAYABLE

In November 2020, the Company entered into a financing arrangement for its Director and Officer Insurance policy. The total amount financed was approximately $540,500 with an annual interest rate of 4.59%, to be paid over a period of nine months. As of September 30, 2021, this financing arrangement was paid in its entirety. As of December 31, 2020, the remaining payable balance on the financed amount was $362,400.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

8.COMMITMENTS AND CONTINGENCIES

Facility Lease Agreements—The Company leases its premises in Houston, Texas under an operating lease which was renewed on November 19, 2020. This renewed lease agreement will commence under an operating lease agreement that is noncancelable from commencement until May 1, 2024.

On March 22, 2021, the Board approved a lease expansion within its premises in Houston, Texas. The amended lease agreement commenced on August 1, 2021 under an operating lease agreement that is noncancelable from commencement until May 1, 2024. The amended lease agreement adds approximately 15,385 square feet. The Company has the option to cancel the lease thereafter until the agreement expires on May 1, 2026. The termination date is effective after a 90-day notice of cancellation.

If the Company exercises the cancellation option, the Company must also pay the lessor a termination payment equal to three months of base rent.

The total lease payments per month are $22,477, $45,554, and $46,116 beginning May 1, 2021, August 1, 2021, and May 1, 2023, respectively. The Company records rent expense as incurred over the term of the lease.

As of September 30, 2021, the future minimum commitments under the amended lease agreement will be as follows:


	Amount
2021	$	136,700
2022		546,700
2023		551,100
2024		461,200
Total	$	1,695,700

Rent expense for the facility lease agreement was $126,900 and $67,700 during the three months ended September 30, 2021 and 2020, respectively, and $270,810 and $194,800 during the nine months ended September 30, 2021 and 2020, respectively. Rent expense is included as an allocation between research and development and general and administrative expense in the condensed consolidated statements of operations.

License Agreements—The Company has entered into a number of licensing arrangements for various intellectual property and licensed patent rights for technologies being developed for commercial sale. As part of these arrangements, the Company is subject to contingent milestone payments in accordance with agreed-upon development objectives, as well as future royalty payments on product sales of the underlying assets. As of September 30, 2021 and December 31, 2020, the Company has not incurred any milestone or royalty liabilities related to these license agreements.

Strategic Alliance Agreement with Leon Office (H.K.)—On January 28, 2021, the Company executed a strategic alliance agreement with Leon Office (H.K.) (“Leon”) a company established under existing laws of Hong Kong. It is intended that Leon acts as an independent business development advisor on behalf of the Company. Leon will seek to introduce organizations and individuals that will create business development opportunities for the Company, to expand the Company’s reach to international markets with a focus on certain Asian markets and to increase brand recognition and exposure through developing liaisons, collaborations, branches and subsidiaries. They will also use commercially reasonable efforts to research the Asian market, with a primary, but not exclusive, focus on determining the most suitable structures for the development of medical partnerships or joint ventures with scientific partners in the Asian market with a mission to test products to be created by the joint venture resulting from such partnership and to develop validation programs for any products produced by such joint venture, including programs for clinical trials and human testing and, ultimately, for product certification. The cost of the agreement is $360,000 annually, payable in four quarterly installments.

Legal Proceedings—In the normal course of business, the Company may have various claims in process and other contingencies. A complaint was filed on March 22, 2021 in the Court of Chancery of the State of Delaware against the Company by a former consultant and director. The complaint alleges, among other things, that the plaintiff is entitled to additional stock options and he is seeking declaratory judgment and specific performance. The Company believes that all of the claims in the complaint are without merit and the Company intends to defend vigorously against them. The Company has filed a motion to dismiss the complaint which is pending.

On or about August 17 and 23, 2021, Tony Tontat, who at the time was the Chief Financial Officer and a member of the Board, submitted substantially identical reports (the “Complaints”) through our complaint hotline. These Complaints, alleged, among other topics, risks associated with our public disclosures in our securities filings and in statements made to the public, investors, and potential investors regarding (i) the anticipated timing of the FDA authorization of our IND applications and (ii) the anticipated timing of human clinical trials. These Complaints were subsequently submitted to the Audit Committee of the Board.

After receiving the Complaints, the Audit Committee recommended that the Board form, and the Board did in turn form, a Special Committee comprised of three independent directors (the “Special Committee”) to review the Complaints and other related issues (the “Internal Review”). The Special Committee retained an independent counsel to assist it in conducting the Internal Review.

On February 2, 2022, following the conclusion of the Internal Review, the Company’s Special Committee reported the results of its Internal Review to the Board. The Board approved certain actions to address the fact that the Company had received communications from the FDA on June 16 and June 17, 2021 that the FDA was placing the IND applications that the Company submitted to the FDA on May 14 and May 17, 2021 for the ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates, respectively, on clinical hold (the “June 16 and 17, 2021 FDA Communications”). On July 13, 2021, the Company received the FDA’s formal clinical hold letters, which asked the Company to address key components regarding the chemical, manufacturing, and control components of the IND applications. On July 16, 2021, the Company issued a press release disclosing that it had received comments from the FDA on the two INDs, but did not use the term “clinical hold.” The Company then consummated a public offering of $40 million of its common stock pursuant to the Registration Statement on July 2, 2021. On August 13, 2021, the Company issued a press release announcing that these INDs were placed on clinical hold. The Company did not disclose the June 16 and 17, 2021 FDA Communications in (i) the Registration Statement on Form S-1 (Registration No. 333-257427) that was filed on June 25, 2021 and declared effective on June 29, 2021, nor the final prospectus contained therein dated June 29, 2021 (collectively, the “Registration Statement”); or (ii) the Form 10-Q for the fiscal quarter ended June 30, 2021 that was filed with the Securities and Exchange Commission on August 13, 2021.

As a result of the disclosure omission of the June 16 and 17 FDA Communications, the Company has concluded that it is reasonably possible that unasserted claims exist for future litigation and losses as of September 30, 2021. However, the Company is unable to estimate any possible range of loss attributed to these unasserted claims at this time. See Note 14 for additional information regarding loss contingencies associated with these unasserted claims transpiring after September 30, 2021.

The Company regularly assesses all contingencies and believes, based on information presently known, the Company is not involved in any other matters that would have a material effect on the Company’s financial position, results of operations and cash flows.

ACQUISITIONS

9 Months Ended

Sep. 30, 2021

ACQUISITIONS

ACQUISITIONS

9.ACQUISITIONS

InSilico Solutions, LLC

On July 26, 2021, the Company completed its previously announced acquisition of InSilico Solutions, LLC (“InSilico”) pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) with InSilico and Michael Ryan (the “Seller”).

Pursuant to the terms of the Purchase Agreement, the Company acquired 100% of the membership interest of InSilico by delivering 50,189 shares to the Seller, and granting 33,177 restricted stock units to the employees of InSilico under the Company’s 2021 Plan (the “Acquisition”). At the closing of the Acquisition, InSilico became a wholly-owned subsidiary of the Company. InSilico, based in Fairfax, VA, is a world class bioinformatics and artificial intelligence services company.

The Company has provisionally estimated fair values for the assets purchased, liabilities assumed, and purchase consideration as of the date of acquisition in the following table. The determination of the estimated fair value required management to make significant estimates and assumptions. The amounts reported are considered provisional as the Company is completing the valuations that are required to allocate the purchase price in areas such as intangible assets and goodwill. As a result, the allocation of the items below may change in the future. See below for the fair value of purchase consideration and fair value of net assets acquired.


	Estimated Fair Value
	at Acquisition Date
Fair value of purchase consideration
Fair value of common stock issued to Seller	$	400,000
Fair value of restricted stock units granted		140,000
Fair value of purchase consideration	$	540,000

Fair value of net assets acquired
Cash	$	84,000
Accounts receivable		26,000
Fixed asset		1,000
Intangible assets (a)		44,000
Goodwill (b)		386,000
Other current liabilities		(1,000)
Fair value of net assets acquired		540,000

(a)

Intangible assets are composed of non-compete contracts ($44,000 fair value and 5 year amortization period).

(b)

Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of the business acquired. This amount also includes intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating InSilico processes with the Company’s.

STOCKHOLDERS EQUITY

9 Months Ended

Sep. 30, 2021

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

10.STOCKHOLDERS’ EQUITY

On June 17, 2020, the Company filed an amendment to its amended and restated certificate of incorporation to complete a 1-for-3.494 reverse split of the Company’s outstanding shares common stock.

Accordingly, unless otherwise noted, all share and per share information has been restated to retroactively show the effect of this stock split.

As of September 30, 2021, and December 31, 2020, the Company was authorized to issue 300,000,000 shares of common stock and 60,000,000 shares of Preferred Stock, of which 24,000,000 shares were designated as Series A-1 Preferred Stock and 16,500,000 shares were designated as Series B Preferred Stock.

Common Stock—As of September 30, 2021 and December 31, 2020, the Company has a single class of common stock.

On October 15, 2020, the Company received net proceeds of $12,332,700 from its Initial Public Offering (“IPO”), after deducting underwriting discounts and commissions of $1,275,000 and other offering expenses of $1,392,300 incurred. The Company issued and sold 1,250,000 shares of common stock in the IPO at a price of $12.00 per share.

In connection with the IPO, all shares of the Company’s Series A-1 Preferred Stock and Series B Preferred Stock were converted into 624,594 and 469,136 shares of common stock, respectively.

On July 2, 2021, the Company received net proceeds of $37,118,100 from a public offering, after deducting underwriting discounts and commissions of $2,494,900 and other offering expenses of $387,000 incurred. The Company issued and sold 8,000,000 shares of common stock in the public offering at a price of $5.00 per share.

Below is a table that outlines the initial value of issuances allocated to the IPO and public offering of common stock and the IPO and public offering common stock discount amortization, during the three and nine months ended September 30, 2021:


	2021
Common Stock
Balance at January 1,	$	11,975,400
Common stock initial public offering discount amortization		24,700
Balance at March 31,	$	12,000,100
Common stock initial public offering discount amortization		24,900
Balance at June 30,	$	12,025,000
Common stock issuance from public offering, net of underwriting discounts and commissions and other offering expenses		37,118,100
Common stock public offering discount		(1,051,200)
Common stock public offering discount amortization		25,200
Common stock public offering discount amortization		60,300
Balance at September 30,	$	48,177,400

On June 8, 2020, the Company agreed to amend the warrant vesting schedule such that the warrants underlying shares of Series B Preferred Stock became immediately exercisable for each warrant holder. On June 8, 2020, warrant holders exercised their option to purchase 335,982 shares of common stock for proceeds of $1,200. Then, on June 10, 2020, warrant holders exercised their option to purchase an additional 1,063,939 shares of common stock for proceeds of $3,700.

On June 8, 2020, the Company issued 3,106 and 430 shares of common stock to the Company’s Chief Medical Officer and another employee, respectively. In addition, on June 19, 2020, the Company issued 402,000 and 320,000 shares of common stock to the Company’s Chief Financial Officer and Chief Operating Officer (“the CFO and COO”) and Chief Strategy and Innovation Officer (“the CSO”), respectively. The shares were issued in exchange for services rendered and no cash considerations. These issuances resulted in $9,432,000 in stock compensation expenses.

Each holder of outstanding shares of common stock shall be entitled to one vote in respect of each share. The number of authorized shares of common stock may be increased or decreased by the affirmative vote of a majority of the outstanding shares of common stock and preferred stock voting together as a single class.

The Company has never paid dividends and has no plans to pay dividends on common stock. As of December 31, 2017, the Company adopted the 2017 Plan. On September 25, 2019, the Board approved an additional 10,000,000 shares to be reserved and authorized under the 2017 Plan. This approval increased the total number of authorized shares from

20,000,000 to 30,000,000. After the reverse stock splits, the total number of authorized shares was updated to 858,615. On June 19, 2020, the Board approved an additional 850,000 shares to be reserved and authorized under the 2017 Plan. This approval increased the total number of authorized shares from 858,615 to 1,708,615.

As of June 25, 2021, the Company adopted the 2021 Plan. Under the 2021 Plan, the Board approved an additional 200,000 shares to be reserved and authorized under the 2021 Plan plus any unallocated shares from the 2017 Plan.

There were 251,916 shares and 270,933 shares available for issuance as of September 30, 2021, and December 31, 2020, respectively.

Series B Preferred Stock—On January 24, 2020, the Company issued 4,782,608 shares of Series B Preferred Stock for $2,200,000. On January 29, 2020, the Company filed a certificate of correction to its amended and restated its certificate of incorporation to authorize the issuance of up to 16,500,000 shares of Series B Preferred Stock. On January 31, 2020, the Company issued an additional 1,739,130 shares of Series B Preferred Stock for $800,000.

On matters submitted to a vote of the stockholders of the Company, Series B Preferred Stock, Series A-1 Preferred Stock, and common stock vote together as one class, with the vote of the Series B Preferred Stock on an as-converted basis. Each holder of Series B Preferred Stock shall have a number of votes equal to the shares of common stock into which the shares of Series B Preferred Stock held by such holder are then convertible.

With respect rights on liquidation, winding up and dissolution, shares of Series B Preferred Stock rank senior to all shares of common stock, but not senior to Series A-1 Preferred Stock.

Each share of Series B Preferred Stock is convertible at any time at the option of the holder at the then current conversion rate. In addition, upon the closing of the sale of shares of common stock to the public in an initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, all shares of preferred stock shall automatically be converted into shares of common stock at the then effective conversion rate.

Accordingly, in connection with the IPO, all shares of the Company’s Series B Preferred Stock were converted into 469,136 shares of common stock on October 15, 2020.

Below is a table that outlines the initial value of issuances allocated to Series B Preferred Stock and the Series B Preferred Stock discount amortized during the three and nine months ended September 30:


	2020
Series B Preferred Stock
Balance at January 1,	$	1,306,900
Series B Preferred Stock proceeds		3,000,000
Series B Preferred Stock discount		(2,668,300)
Series B Preferred Stock discount amortization		368,400
Balance at March 31,	$	2,007,000
Series B Preferred Stock discount amortization		324,300
Balance at June 30,	$	2,331,300
Series B Preferred Stock discount amortization		—
Balance at September 30,	$	2,331,300

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or the occurrence of a liquidation, the holders of the shares of Series B Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, before any payment shall be made to the holders of common stock by reason of their ownership thereof, an amount per share equal to $0.46, the original issue price.

Warrants Underlying Series B Preferred Stock—In connection with the sale of the Series B Preferred Stock, each investor was issued warrants to purchase 0.0859 shares of common stock for each share of Series B Preferred Stock purchased at a price of $0.003494 per share of common stock. The warrants become exercisable in accordance with the

schedule set forth below following completion by the Company of an initial public offering and thereafter may be exercised at any time prior to expiration ten years from the date of issuance.

●

30% of the warrants beginning six months after the date on which the securities of the Company are first listed on a United States national securities exchange (such date, the “Listing Date”);

●

An additional 30% of the warrants beginning nine months after the Listing Date; and

●

The remainder of the warrants beginning twelve months after the Listing Date.

As of September 30, 2020, the Company sold 16,391,397 shares of Series B Preferred Stock, which contained 1,399,921 underlying warrants to purchase common stock based on the exercise price and vesting schedule outlined above. These warrants are equity classified and the fair value of $5,533,000 is reflected as additional paid-in capital.

On June 8, 2020, the Company agreed to amend the warrant vesting schedule such that the warrants became immediately exercisable for each warrant holder.

On June 8, 2020, warrant holders exercised their option to purchase 335,982 shares of common stock for proceeds of $1,200. Then, on June 10, 2020, warrant holders exercised their option to purchase an additional 1,063,939 shares of common stock for proceeds of $3,700. As of June 30, 2021, there were no warrants underlying Series B Preferred Stock.

The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions for the nine months ended September 30, 2020:




Risk-free interest rate	1.54% - 1.88	%
Expected volatility	71.95% - 72.71	%
Expected life (years)	10
Expected dividend yield	0	%

Representative’s Warrants—In connection with the IPO on October 15, 2020, the Company granted the underwriters warrants (the “Underwriters’ Warrants”) to purchase an aggregate of 62,500 shares of common stock at an exercise price of $15.00 per share, which is 125% of the initial public offering price. The Underwriters’ Warrants have a five-year term and are not exercisable prior to April 13, 2021. All of the Underwriters’ Warrants were outstanding at September 30, 2021.

These warrants were equity classified. As of September 30, 2021, and December 31, 2020, the warrant fair values of $282,500 and $357,300, respectively, is reflected as additional paid-in capital. On the issuance date, the Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions on October 15, 2020:



Risk-free interest rate	0.18	%
Expected volatility	94.08	%
Expected life (years)	2.74
Expected dividend yield	0	%

In connection with the public offering on July 2, 2021, the Company granted the underwriters warrants to purchase an aggregate of 400,000 shares of common stock at an exercise price of $6.25 per share, which is 125% of the initial public offering price. The Underwriters’ Warrants have a five-year term and are not exercisable prior to January 2, 2022. All of the Underwriters’ Warrants were outstanding at September 30, 2021.

These warrants were equity classified. As of September 30, 2021, the warrants contained a fair value of $991,000 and is reflected as additional paid-in capital. On the issuance date, the Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions on July 2, 2021:


Risk-free interest rate	0.40	%
Expected volatility	98.27	%
Expected life (years)	2.75
Expected dividend yield	0	%

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2021

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

11.STOCK-BASED COMPENSATION

2017 Stock Incentive Plan— Stock Options

The Black-Scholes option-pricing model was used to estimate the fair value of stock options with the following weighted-average assumptions for the nine months ended September 30:


	September 30,		September 30,
	2021		2020
Risk-free interest rate	1.09	%	0.15% - 2.92%	%
Expected volatility	83.34	%	72.29% - 82.52	%
Expected life (years)	6.22		4.93 – 6.07
Expected dividend yield	0	%	0	%

In the nine months ended September 30, 2021, the fair value of the shares of common stock underlying the stock options was determined by the closing stock price listed on the Nasdaq Capital Market on the grant date.

Prior to the Company’s initial public offering, the fair value of the shares of common stock underlying the stock options had historically been determined by the Board, with input from management. Because there was no public market for the Company’s shares of common stock prior to October 15, 2020, the Board determined the fair value of the shares of common stock at the time of grant of the stock option by considering a number of objective and subjective factors, including important developments in the Company’s operations, third-party valuations performed, sales of Series A-1 Preferred Stock, sales of Series B Preferred Stock, actual operating results and financial performance, the conditions in the biotechnology industry and the economy in general, the stock price performance and volatility of comparable public companies, and the lack of liquidity of the Company’s shares of common stock, among other factors.

The following table summarizes the activity for all stock options outstanding at September 30 under the 2017 Plan:


	2021			2020
		Weighted			Weighted
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price
Options outstanding at beginning of year	489,718	$	10.03	598,083	$	11.04
Granted	147,038		8.47	86,536		17.95
Exercised	(18,891)		6.64	—		—
Cancelled and forfeited	(64,427)		17.67	(66,109)		15.06
Balance at September 30	553,438	$	8.84	618,510	$	11.58
Options exercisable at September 30:	396,020	$	8.87	390,075	$	8.51
Weighted average grant date fair value for options granted during the year:		$	8.47		$	17.43

The intrinsic value of the options exercised during the nine months ended September 30, 2021 was $33,000.

The following table summarizes additional information about stock options outstanding and exercisable at September 30, 2021 and 2020 under the 2017 Plan:

Options Outstanding

Options Exercisable

Weighted

Average

Weighted

Remaining

Average

Aggregate

Average

Aggregate

As of

Options

Contractual

Exercise

Intrinsic

Options

Exercise

Intrinsic

September 30,

Outstanding

Life

Price

Value

Exercisable

Price

Value

2021

553,438

6.49

8.84

—

396,020

8.87

—

2020

618,510

7.79

11.58

1,787,200

390,075

8.51

1,521,400

Total stock compensation expense recognized from stock-based compensation awards classified as stock options were recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	44,500	$	169,000	$	86,400	$	980,000
General and administrative		32,500		160,000		189,400		248,000
Total	$	77,000	$	329,000	$	275,800	$	1,228,000

On August 20, 2020, the Board canceled and terminated 15,792 stock options, granted during the quarter ended June 30, 2020, to four non-employees. Thereafter, on August 20, 2020, the Board granted 21,112 stock options to the same individuals with a grant date fair value of $12.81 per share. There were 3,959 stock option grants that were considered vested on the grant date. The effects of the stock option modifications resulted in $0 and $34,900 of stock compensation expense allocable to general and administrative for the three and nine months ended September 30, 2021, respectively. Included in that amount were $0 and $16,000 of incremental compensation costs resulting from the modifications for the three and nine months ended September 30, 2021, respectively.

The effects of the stock option modifications resulted in $71,600 of stock compensation expense allocable to general and administrative for the three and nine months ended September 30, 2020. Included in that amount were $19,700 of incremental compensation costs resulting from the modifications for the three and nine months ended September 30, 2020.

As of September 30, 2021, total unrecognized stock compensation expense is $919,900, related to unvested stock options to be recognized over the remaining weighted-average vesting period of 3.42 years.

2017 Stock Incentive Plan—Restricted Stock Units

In January 2017, the Company’s Board approved the adoption of the 2017 Plan. The 2017 Plan permits the Company to grant up to 1,708,615 shares of the Company’s common stock awards, including incentive stock options; non-statutory stock options; and conditional share awards to employees, directors, and consultants of the Company. All granted shares that are canceled, forfeited, or expired are returned to the 2017 Plan and are available for grant in conjunction with the issuance of new common stock awards. Restricted stock units (“RSUs”) vest over a specified amount of time or when certain performance metrics are achieved by the Company.

In the nine months ended September 30, 2021, the fair value of the shares of common stock underlying restricted stock units was determined by the closing stock price listed on the Nasdaq Capital Market on the grant date.

Prior to the Company’s initial public offering, the fair value of the shares of common stock underlying the stock options had historically been determined by the Board, with input from management. As there was no public market for Company’s shares of common stock prior to October 15, 2020, the Board of directors determined the fair value of the shares of common stock at the time of grant of the RSUs by considering a number of objective and subjective factors, including important developments in the Company’s operations, third-party valuations performed, sales of Series A-1 Preferred Stock, sales of Series B Preferred Stock, actual operating results and financial performance, the conditions in

the biotechnology industry and the economy in general, the stock price performance and volatility of comparable public companies, and the lack of liquidity of the Company’s shares of common stock, among other factors.

The following table summarizes the activity for all RSUs outstanding at September 30 under the 2017 Plan:


	2021			2020
		Weighted Average			Weighted Average
		Grant Date			Grant Date
		Fair Value			Fair Value
	Shares	Per Share		Shares	Per Share
Nonvested RSUs at beginning of year	946,245	$	12.81	—	$	—
Granted	166,660		7.98	1,655,579		15.23
Vested	(37,802)		6.51	—		—
Cancelled and forfeited	(136,445)		12.79	(709,334)		19.00
Nonvested RSUs at September 30,	938,658	$	12.28	946,245	$	12.81

Total stock compensation expense recognized from stock-based compensation awards classified as restricted stock units were recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021, as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	99,400	$	299,000	$	2,000,600	$	299,000
General and administrative		866,900		621,000		939,800		621,000
Total	$	966,300	$	920,000	$	2,940,400	$	920,000

On August 20, 2020, the Board canceled and terminated 709,334 RSUs, granted during the quarter ended June 30, 2020. The cancelled RSUs were originally granted to five individuals with a grant date fair value of $12.87 per share. Thereafter, on August 20, 2020, the Board granted 946,245 RSUs to the same individuals with a grant date fair value of $12.81 per share. None of the RSU grants were considered vested on the grant date. The RSU grants were modified for three employees and two non-employees.

The effects of the RSU modifications resulted in $62,300 and $108,500 of stock compensation expense allocable to research and development and general and administrative, respectively, during the three months ended September 30, 2021. Included in those amounts were incremental compensation costs of $11,500 and $25,300 of stock compensation expense allocable to research and development and general and administrative, respectively, during the three months ended September 30, 2021.

The effects of the RSU modifications resulted in $598,900 and $1,286,800 of stock compensation expense allocable to research and development and general and administrative, respectively, during the nine months ended September 30, 2021. Included in those amounts were incremental compensation costs of $52,500 and $115,200 of stock compensation expense allocable to research and development and general and administrative, respectively, during the nine months ended September 30, 2021.

The effects of the RSU modifications resulted in $299,000 and $621,000 of stock compensation expense allocable to research and development and general and administrative, respectively, during the three and nine months ended September 30, 2020. Included in those amounts were incremental compensation costs of $65,600 and $141,200 of stock compensation expense allocable to research and development and general and administrative, respectively, during the three and nine months ended September 30, 2020.

2021 Stock Incentive Plan—Restricted Stock Units

In June 2021, the Board approved the adoption of the 2021 Plan. The 2021 Plan permits the Company to grant up to 217,292 shares of the Company’s common stock awards, including incentive stock options; non-statutory stock options; and conditional share awards to employees, directors, and consultants of the Company. All granted shares that are canceled, forfeited, or expired are returned to the 2021 Plan and are available for grant in conjunction with the issuance of new common stock awards. RSUs vest over a specified amount of time or when certain performance metrics are achieved by the Company.

The following table summarizes the activity for all RSUs outstanding at September 30, 2021 under the 2021 Plan:


	2021
		Weighted Average
		Grant Date
		Fair Value
	Shares	Per Share
Nonvested RSUs at beginning of year	—	$	—
Granted	102,613		5.20
Vested	(37,900)		4.75
Cancelled and forfeited	—		—
Nonvested RSUs at September 30,	64,713	$	5.46


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021		2021
Research and development		11,000		11,000
General and administrative		51,000		91,900
Total	$	62,000	$	102,900

INCOME TAXES

9 Months Ended

Sep. 30, 2021

INCOME TAXES

INCOME TAXES

12.INCOME TAXES

The Company’s effective tax rate from continuing operations was 0% for the three and nine months ended September 30, 2021 and 2020. The Company recorded no income tax provision for the three and nine months ended September 30, 2021 and 2020.

The provision for income taxes during the interim reporting periods is calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss for the reporting period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws, business reorganizations and settlements with taxing authorities.

The income tax rates vary from the US federal statutory rate of 21% primarily due to the full valuation allowance on the Company’s deferred tax assets. The Company has recorded the full valuation allowance based on an evaluation of both positive and negative evidence, including latest forecasts and cumulative losses in recent years. The Company has concluded that it was more likely than not that none of its deferred tax assets would be realized.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

13.RELATED PARTY TRANSACTIONS

Through September 30, 2020, the Company maintained two separate consulting agreements with the Company’s Chief Strategy and Innovation Officer (“CSIO”), and the Chief Financial Officer and Chief Operating Officer (“CFO and COO”).

Beginning in the year ended December 31, 2014, the Company entered into its first consulting agreement with the CSIO. Pursuant to the amended agreement dated July 20, 2018, the CSIO is entitled to a consulting fee of $400 per hour, provided that he is limited to nineteen (19) hours per month unless he obtains approval from the Company’s Chief Executive Officer. The consulting agreement indicates that the CSIO will provide a leadership role for the Company’s business development strategies. The consulting fees paid to the CSIO totaled $579,700 in the nine months ended September 30, 2020. In addition, the Company issued the CSIO 320,000 shares of common stock on June 19, 2020, in exchange for services rendered and no cash considerations.

Beginning in the year ended December 31, 2018, the Company entered into its first consulting agreement with the CFO and COO. Initially, his title was “Consultant”, and the Company changed his title to CFO and COO on October 25, 2019. The CFO and COO was elected as a director of the Company on January 17, 2020. Pursuant to the agreement on April 18, 2018, and amended on September 4, 2019, the CFO and COO is entitled to a consulting fee of $2,500 per month amended to $10,000 per month plus discretionary bonuses approved by management. The consulting fees paid to the CFO and COO totaled $140,000 in the nine months ended September 30, 2020. In addition, the Company issued the CFO and COO 402,000 shares of common stock on June 19, 2020, in exchange for services rendered and no cash considerations.

After the Company completed the IPO on October 15, 2020, the CFO and COO and the CSIO became full time employees, at which time their consulting agreements were terminated.

There were no related party transactions during the three and nine months ended September 30, 2021.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2021

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

14.SUBSEQUENT EVENTS

Director and Officer Insurance Policy Renewal

In November 2021, the Company entered into a financing arrangement to renew its Director and Officer Insurance policy. The total amount financed was approximately $665,900 with an annual interest rate of 4.59%, to be paid over a period of ten months. As of February 28, 2022 the remaining payable balance on the financed amount was $342,200. The effective date for the policy was October 16, 2021 and has a term of thirteen months from the effective date.

Legal Complaint Filed Against the Company

Sabby Volatility Warrant Master Fund Ltd., et al. v. Kiromic BioPharma, Inc. et al., Case No. 22-cv-1927 (SDNY). On March 7, 2022, entities related to Sabby Management LLC (the “Sabby Entities”) and Empery Asset Management, LP (the “Empery Entities”) filed a complaint in the District Court for the Southern District of New York alleging claims against the Company and certain current and former officers and directors of the Company for alleged violations of Sections 11, 12, and 15 of the Securities Act of 1933 in connection with the purchase of common stock through the Company’s public offering that closed on July 2, 2021. The plaintiffs seek unspecified damages; rescission to the extent they still hold the Company’s securities, or if sold, rescissory damages; reasonable costs and expenses, including attorneys’ and experts’ fees; and other unspecified equitable and injunctive relief. The Company expects to vigorously defend against this claim. The Company has evaluated that it is reasonably possible that the Sabby Entities’ and Empery Entities’ claims may result in an estimated loss ranging between $0 and $8,100,000. Similarly, the Company has evaluated that it is reasonably possible that other unasserted claims in future litigation and losses may occur. However, the Company is unable to estimate any possible range of loss attributed to other unasserted claims at this time.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

All intercompany balances were eliminated upon consolidation.

Use of Estimates

Cash and Cash Equivalents

Concentrations of Credit Risk and Other Uncertainties

Deposit

Deferred Public Offering Costs

Property and Equipment

Estimated useful lives of property and equipment are as follows for the major classes of assets:


Asset Description		Estimated Lives
Laboratory Equipment		3 - 8
Leasehold Improvements		1 - 7
Office Furniture, Fixtures, and Equipment		5
Software		3 - 5

Internal Use Software Development Costs

Goodwill

Intangible Assets

Subsequently, intangible assets will be amortized over their remaining useful life, which is estimated to be 5 years.

Impairment of Long-Lived Assets

Comprehensive Loss

Income Taxes

Research and Development Expense

Proceeds from Grants

Fair Value Measurements

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

There were no changes in the fair value hierarchy levels during the three and nine months ended September 30, 2021 and 2020.

Nonvested Stock Options and Restricted Stock Units

variety of share-based payments and incentives to board members, employees, and non-employees through grants of nonvested stock options and restricted stock units.

Stock-Based Compensation

The Company estimates the grant-date fair value of stock options using the Black-Scholes model and the assumptions used to value such stock options are determined as follows:

●

valuations of the common stock performed by third-party specialists;

●

the prices, rights, preferences, and privileges of the Company’s Series A-1 Preferred Stock and Series B Preferred Stock relative to those of the Company’s common stock;

●

lack of marketability of the common stock;

●

current business conditions and projections;

●

hiring of key personnel and the experience of management;

●

the Company’s stage of development;

●

likelihood of achieving a liquidity event, such as a follow-on offering, a merger or acquisition of the Company given prevailing market conditions, or other liquidation event;

●

the market performance of comparable publicly traded companies; and

●

the US and global capital market conditions.

Segment Data

Segment Data—The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

Recently Issued Accounting Pronouncements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful lives of property and equipment


Asset Description		Estimated Lives
Laboratory Equipment		3 - 8
Leasehold Improvements		1 - 7
Office Furniture, Fixtures, and Equipment		5
Software		3 - 5

NET LOSS PER SHARE OF COMMON STOCK (Tables)

9 Months Ended

Sep. 30, 2021

NET LOSS PER COMMON SHARE

Schedule of earnings per share, basic and diluted


	Three Months Ended				Nine Months Ended
	September 30,				September30,
	2021		2020		2021		2020
Net loss	$	(6,124,800)	$	(2,415,700)	$	(14,953,600)	$	(15,635,300)
Less: Series B Preferred Stock discount amortization		—		—		—		(692,700)
Less: Initial Public Offering Common Stock discount amortization		(25,200)		—		(74,800)		—
Less: Public Offering Common Stock discount amortization		(60,300)		—		(60,300)		—
Net loss attributable to common shareholders, basic and diluted	$	(6,210,300)	$	(2,415,700)	$	(15,088,700)	$	(16,328,000)
Weighted average common shares outstanding, basic and diluted		15,366,075		4,989,269		10,048,170		3,719,132
Net loss per common share, basic and diluted	$	(0.40)	$	(0.48)	$	(1.50)	$	(4.39)

Schedule of antidilutive securities excluded from computation of earnings per share


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021	2020	2021	2020
Options to purchase	—	1,484	—	1,484
Restricted Stock Units	6,698	36,368	73,366	36,368
Series A‑1 Preferred Stock	—	624,594	—	624,594
Series B Preferred Stock	—	496,136	—	452,378
Total	6,698	1,158,582	73,366	1,114,824

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2021

PROPERTY AND EQUIPMENT

Schedule of property and equipment


	September 30,		December 31,
	2021		2020
Equipment	$	1,586,500	$	780,500
Leasehold improvements		1,403,300		1,229,700
Office furniture, fixtures, and equipment		16,600		16,600
Software		331,700		151,700
Construction in progress		133,600		449,200
		3,471,700		2,627,700
Less: Accumulated depreciation		(892,900)		(561,700)
Total	$	2,578,800	$	2,066,000

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2021

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	September 30,		December 31,
	2021		2020
Accrued consulting and outside services	$	385,700	$	143,200
Accrued compensation		131,400		191,000
Total	$	517,100	$	334,200

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

Schedule of future minimum rental payments for operating leases


	Amount
2021	$	136,700
2022		546,700
2023		551,100
2024		461,200
Total	$	1,695,700

ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2021

ACQUISITIONS

Schedule of fair value of purchase consideration and fair value of net assets acquired


	Estimated Fair Value
	at Acquisition Date
Fair value of purchase consideration
Fair value of common stock issued to Seller	$	400,000
Fair value of restricted stock units granted		140,000
Fair value of purchase consideration	$	540,000

Fair value of net assets acquired
Cash	$	84,000
Accounts receivable		26,000
Fixed asset		1,000
Intangible assets (a)		44,000
Goodwill (b)		386,000
Other current liabilities		(1,000)
Fair value of net assets acquired		540,000

(a)

Intangible assets are composed of non-compete contracts ($44,000 fair value and 5 year amortization period).

(b)

STOCKHOLDERS EQUITY (Tables)

9 Months Ended

Sep. 30, 2021

Stockholders' Equity

Schedule of initial value of issuances allocated to IPO common stock, IPO common stock discount amortized and value of IPO common stock converted into additional paid-in-capital


	2021
Common Stock
Balance at January 1,	$	11,975,400
Common stock initial public offering discount amortization		24,700
Balance at March 31,	$	12,000,100
Common stock initial public offering discount amortization		24,900
Balance at June 30,	$	12,025,000
Common stock issuance from public offering, net of underwriting discounts and commissions and other offering expenses		37,118,100
Common stock public offering discount		(1,051,200)
Common stock public offering discount amortization		25,200
Common stock public offering discount amortization		60,300
Balance at September 30,	$	48,177,400

Common Stock Warrants - Representative | Initial Public Offering

Stockholders' Equity

Schedule of assumptions used to estimate fair value of warrants



Risk-free interest rate	0.18	%
Expected volatility	94.08	%
Expected life (years)	2.74
Expected dividend yield	0	%

Common Stock Warrants - Representative | Public Offering

Stockholders' Equity

Schedule of assumptions used to estimate fair value of warrants


Risk-free interest rate	0.40	%
Expected volatility	98.27	%
Expected life (years)	2.75
Expected dividend yield	0	%

Series B Preferred Stock

Stockholders' Equity

Schedule of initial value of issuances allocated to Series B Preferred Stock and the Series B Preferred Stock discount amortized


	2020
Series B Preferred Stock
Balance at January 1,	$	1,306,900
Series B Preferred Stock proceeds		3,000,000
Series B Preferred Stock discount		(2,668,300)
Series B Preferred Stock discount amortization		368,400
Balance at March 31,	$	2,007,000
Series B Preferred Stock discount amortization		324,300
Balance at June 30,	$	2,331,300
Series B Preferred Stock discount amortization		—
Balance at September 30,	$	2,331,300

Schedule of assumptions used to estimate fair value of warrants




Risk-free interest rate	1.54% - 1.88	%
Expected volatility	71.95% - 72.71	%
Expected life (years)	10
Expected dividend yield	0	%

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2021

Stock Incentive Plan 2017 | Stock Options

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of assumptions used to estimate fair value of stock options


	September 30,		September 30,
	2021		2020
Risk-free interest rate	1.09	%	0.15% - 2.92%	%
Expected volatility	83.34	%	72.29% - 82.52	%
Expected life (years)	6.22		4.93 – 6.07
Expected dividend yield	0	%	0	%

Schedule of stock option activity


	2021			2020
		Weighted			Weighted
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price
Options outstanding at beginning of year	489,718	$	10.03	598,083	$	11.04
Granted	147,038		8.47	86,536		17.95
Exercised	(18,891)		6.64	—		—
Cancelled and forfeited	(64,427)		17.67	(66,109)		15.06
Balance at September 30	553,438	$	8.84	618,510	$	11.58
Options exercisable at September 30:	396,020	$	8.87	390,075	$	8.51
Weighted average grant date fair value for options granted during the year:		$	8.47		$	17.43

Options Outstanding

Options Exercisable

Weighted

Average

Weighted

Remaining

Average

Aggregate

Average

Aggregate

As of

Options

Contractual

Exercise

Intrinsic

Options

Exercise

Intrinsic

September 30,

Outstanding

Life

Price

Value

Exercisable

Price

Value

2021

553,438

6.49

8.84

—

396,020

8.87

—

2020

618,510

7.79

11.58

1,787,200

390,075

8.51

1,521,400

Schedule of stock-based compensation


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	44,500	$	169,000	$	86,400	$	980,000
General and administrative		32,500		160,000		189,400		248,000
Total	$	77,000	$	329,000	$	275,800	$	1,228,000

Stock Incentive Plan 2017 | Restricted Stock Units

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of restricted stock unit activity


	2021			2020
		Weighted Average			Weighted Average
		Grant Date			Grant Date
		Fair Value			Fair Value
	Shares	Per Share		Shares	Per Share
Nonvested RSUs at beginning of year	946,245	$	12.81	—	$	—
Granted	166,660		7.98	1,655,579		15.23
Vested	(37,802)		6.51	—		—
Cancelled and forfeited	(136,445)		12.79	(709,334)		19.00
Nonvested RSUs at September 30,	938,658	$	12.28	946,245	$	12.81

Schedule of stock-based compensation


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	99,400	$	299,000	$	2,000,600	$	299,000
General and administrative		866,900		621,000		939,800		621,000
Total	$	966,300	$	920,000	$	2,940,400	$	920,000

Stock Incentive Plan 2021 | Restricted Stock Units

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of restricted stock unit activity


	2021
		Weighted Average
		Grant Date
		Fair Value
	Shares	Per Share
Nonvested RSUs at beginning of year	—	$	—
Granted	102,613		5.20
Vested	(37,900)		4.75
Cancelled and forfeited	—		—
Nonvested RSUs at September 30,	64,713	$	5.46

Schedule of stock-based compensation


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021		2021
Research and development		11,000		11,000
General and administrative		51,000		91,900
Total	$	62,000	$	102,900

ORGANIZATION (Details) - USD ($)	9 Months Ended
ORGANIZATION (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Aug. 31, 2018
ORGANIZATION
Cash flow from operations	$ (11,156,300)	$ (3,557,200)
Accumulated deficit	(56,581,400)		$ (41,627,800)
NIH Grant receivable				$ 2,235,000
Phase II approved amount of grant	$ 1,384,000

- Definition

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Sep. 30, 2021 item	Sep. 30, 2020 USD ($)
Deferred costs
Number of lease facilities with deposit held by lessor \| item	1
Prepaid expenses and other current assets
Deferred costs
Deferred Offering Costs \| $		$ 933,100

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Property and Equipment
Impairment of long-lived assets held-for-use			$ 0
Intangible assets - amortization period			5 years
Unrecognized tax benefits, interest or penalties	$ 0	$ 0	$ 0	$ 0
Minimum
Property and Equipment
Property plant and equipment useful life			1 year
Maximum
Property and Equipment
Property plant and equipment useful life			8 years
Laboratory equipment \| Minimum
Property and Equipment
Property plant and equipment useful life			3 years
Laboratory equipment \| Maximum
Property and Equipment
Property plant and equipment useful life			8 years
Leasehold improvements \| Minimum
Property and Equipment
Property plant and equipment useful life			1 year
Leasehold improvements \| Maximum
Property and Equipment
Property plant and equipment useful life			7 years
Office furniture, fixtures, and equipment
Property and Equipment
Property plant and equipment useful life			5 years
Software \| Minimum
Property and Equipment
Property plant and equipment useful life			3 years
Software \| Maximum
Property and Equipment
Property plant and equipment useful life			5 years
Software development costs
Property and Equipment
Property plant and equipment useful life			5 years
Capitalized software development costs			$ 180,000	$ 10,200	$ 10,200

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurements (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Changes in fair value hierarchy levels	$ 0	$ 0	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nonvested Stock Options (Details)	9 Months Ended
	Sep. 30, 2021
Nonvested Stock Options
Expected dividend yield	0.00%
Monthly Vesting Conditions \| Minimum \| Restricted Stock Units
Nonvested Stock Options
Vesting period	6 months
Monthly Vesting Conditions \| Maximum \| Restricted Stock Units
Nonvested Stock Options
Vesting period	12 months
Stock Incentive Plan 2017
Nonvested Stock Options
Expiration period	10 years
Stock Incentive Plan 2017 \| Annual Vesting Conditions
Nonvested Stock Options
Vesting period	4 years
Stock Incentive Plan 2017 \| Monthly Vesting Conditions \| Minimum
Nonvested Stock Options
Vesting period	10 months
Stock Incentive Plan 2017 \| Monthly Vesting Conditions \| Maximum
Nonvested Stock Options
Vesting period	48 months

NET LOSS PER SHARE OF COMMON STOCK - Computation of basic and diluted earnings per share (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Net loss per common share
Net loss	$ (6,124,800)	$ (4,974,300)	$ (3,854,500)	$ (2,415,700)	$ (11,366,900)	$ (1,852,700)	$ (14,953,600)	$ (15,635,300)
Net loss attributable to common shareholders, basic	(6,210,300)			(2,415,700)			(15,088,700)	(16,328,000)
Net loss attributable to common shareholders, diluted	$ (6,210,300)			$ (2,415,700)			$ (15,088,700)	$ (16,328,000)
Weighted average common shares outstanding, basic	15,366,075			4,989,269			10,048,170	3,719,132
Weighted average common shares outstanding, diluted	15,366,075			4,989,269			10,048,170	3,719,132
Net loss per common share, basic	$ (0.40)			$ (0.48)			$ (1.50)	$ (4.39)
Net loss per common share, diluted	$ (0.40)			$ (0.48)			$ (1.50)	$ (4.39)
Initial Public Offering
Net loss per common share
Less: Common Stock discount amortization	$ (25,200)						$ (74,800)
Public Offering
Net loss per common share
Less: Common Stock discount amortization	$ (60,300)						$ (60,300)
Series B Preferred Stock
Net loss per common share
Series B Preferred Stock discount amortization					$ (324,300)	$ (368,400)		$ (692,700)

NET LOSS PER SHARE OF COMMON STOCK - Restatement of Prior Period Due to Correction of Error (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Error Correction
Weighted average common shares outstanding, basic	15,366,075	4,989,269	10,048,170	3,719,132
Weighted average common shares outstanding, diluted	15,366,075	4,989,269	10,048,170	3,719,132
Net loss per common share, basic	$ (0.40)	$ (0.48)	$ (1.50)	$ (4.39)
Net loss per common share, diluted	$ (0.40)	$ (0.48)	$ (1.50)	$ (4.39)
Error Correction - Calculation of Weighted Average Shares \| Previously Reported
Error Correction
Weighted average common shares outstanding, basic		3,719,132
Weighted average common shares outstanding, diluted		3,719,132
Net loss per common share, basic		$ (0.65)
Net loss per common share, diluted		$ (0.65)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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-Subparagraph (SX 210.7-04(23))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=125511455&loc=d3e1337-109256

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

+ Details

NET LOSS PER SHARE OF COMMON STOCK - Dilutive Securities Excluded From the Computations of Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Dilutive Securities Excluded From the Computations of Earnings Per Share
Potentially dilutive securities	6,698	1,158,582	73,366	1,114,824
Series A-1 Preferred Stock
Dilutive Securities Excluded From the Computations of Earnings Per Share
Potentially dilutive securities		624,594		624,594
Series B Preferred Stock
Dilutive Securities Excluded From the Computations of Earnings Per Share
Potentially dilutive securities				452,378
Potentially dilutive securities		496,136
Stock Options
Dilutive Securities Excluded From the Computations of Earnings Per Share
Potentially dilutive securities		1,484		1,484
Restricted Stock Units
Dilutive Securities Excluded From the Computations of Earnings Per Share
Potentially dilutive securities	6,698	36,368	73,366	36,368

PROPERTY AND EQUIPMENT (Details) - USD ($)	3 Months Ended		9 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	$ 3,471,700		$ 3,471,700		$ 2,627,700
Less: Accumulated depreciation	(892,900)		(892,900)		(561,700)
Total	2,578,800		2,578,800		2,066,000
Depreciation	128,800	$ 50,400	331,200	$ 118,900
Equipment
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	1,586,500		1,586,500		780,500
Leasehold improvements
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	1,403,300		1,403,300		1,229,700
Office furniture, fixtures, and equipment
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	16,600		16,600		16,600
Software
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	331,700		331,700		151,700
Construction in progress
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	$ 133,600		$ 133,600		$ 449,200

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued consulting and outside services	$ 385,700	$ 143,200
Accrued compensation	131,400	191,000
Total	$ 517,100	$ 334,200

LOAN PAYABLE (Details) - USD ($)			12 Months Ended
LOAN PAYABLE (Details) - USD ($)	Feb. 16, 2021	May 01, 2020	Dec. 31, 2020
Current loan payable
Loan payable			$ 105,600
SBA Loan
Current loan payable
Principal amount		$ 115,600
Loan payable			105,600
Loan initial proceeds			115,600
Loan repayments			$ 10,000
Loan term		2 years
Loan fixed interest rate		1.00%
Loan first payment due		7 months
Loan principal forgiven	$ 105,800

NOTE PAYABLE (Details) - USD ($)	1 Months Ended
NOTE PAYABLE (Details) - USD ($)	Nov. 30, 2020	Dec. 31, 2020
Note payable
Note payable		$ 362,400
Director and Officer Insurance Policy Financing
Note payable
Note payable	$ 540,500	$ 362,400
Interest rate	4.59%
Note term	9 months

COMMITMENTS AND CONTINGENCIES (Details)							3 Months Ended		9 Months Ended
COMMITMENTS AND CONTINGENCIES (Details)	May 01, 2023 USD ($)	Aug. 01, 2021 USD ($)	Jul. 02, 2021 USD ($)	May 01, 2021 USD ($)	Mar. 22, 2021 item ft²	Jan. 28, 2021 USD ($) installment	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)
Leases
Additional office space leased \| ft²					15,385
Period of time after notice of cancellation that the lease effectively terminates					90 days
Number of months rent due as a termination payment if lease cancellation option exercised \| item					3
Total lease payments per month	$ 46,116	$ 45,554		$ 22,477
Rent expense							$ 126,900	$ 67,700	$ 270,810	$ 194,800
Future minimum commitments
2021							136,700		136,700
2022							546,700		546,700
2023							551,100		551,100
2024							461,200		461,200
Total							$ 1,695,700		1,695,700
Strategic Alliance Agreement
Proceeds from issuance of common stock			$ 40,000,000						$ 40,000,000
Strategic Alliance Agreement \| Leon Office (H.K.)
Strategic Alliance Agreement
Annual cost						$ 360,000
Number of quarterly installments \| installment						4

ACQUISITIONS (Details) - USD ($)		9 Months Ended
ACQUISITIONS (Details) - USD ($)	Jul. 26, 2021	Sep. 30, 2021
Fair value of net assets acquired
Goodwill		$ 386,000
Intangible assets - amortization period		5 years
InSilico
Acquisitions
Interest percentage acquired	100.00%
Common shares issued for Insilico Solutions LLC Membership Purchase Agreement (in shares)	50,189
Restricted stock units granted	33,177
Fair value of purchase consideration
Fair value of common stock issued to Seller	$ 400,000
Fair value of restricted stock units granted	140,000
Fair value of purchase consideration	540,000
Fair value of net assets acquired
Cash	84,000
Accounts receivable	26,000
Fixed asset	1,000
Intangible assets	44,000
Goodwill	386,000
Other current liabilities	(1,000)
Fair value of net assets acquired	540,000
InSilico \| Noncompete contracts
Fair value of net assets acquired
Intangible assets	$ 44,000
Intangible assets - amortization period	5 years

STOCKHOLDERS EQUITY - Information (Details)						3 Months Ended		9 Months Ended
STOCKHOLDERS EQUITY - Information (Details)	Jun. 19, 2020 USD ($) shares	Jun. 17, 2020 shares	Jun. 10, 2020 USD ($) shares	Jun. 08, 2020 USD ($) Vote shares	Sep. 25, 2019 shares	Sep. 30, 2021 USD ($) shares	Sep. 30, 2020 USD ($) shares	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) shares	Jun. 30, 2021 shares	Jun. 25, 2021 shares	Dec. 31, 2020 shares	Jun. 18, 2020 shares	Sep. 24, 2019 shares
Stockholder's equity (Deficit)
Reverse split		3.494
Preferred stock, authorized						60,000,000		60,000,000				60,000,000
Common stock, authorized						300,000,000		300,000,000				300,000,000
Warrants to purchase shares			1,063,939	335,982
Proceeds from Issuance of Warrants \| $			$ 3,700	$ 1,200					$ 4,900
Stock compensation expenses \| $				$ 9,432,000		$ 77,000	$ 329,000	$ 275,800	$ 1,228,000
Number of Votes \| Vote				1
Dividend paid \| $ / shares								$ 0
Shares available for issuance						251,916		251,916				270,933
Stock Incentive Plan 2017
Stockholder's equity (Deficit)
Authorized shares	1,708,615	858,615			30,000,000								858,615	20,000,000
Additional shares authorized	850,000				10,000,000
Stock Incentive Plan 2021
Stockholder's equity (Deficit)
Authorized shares											200,000
Employees
Stockholder's equity (Deficit)
Shares issued for services				430
Cash consideration \| $				$ 0
CMO
Stockholder's equity (Deficit)
Shares issued for services				3,106
Cash consideration \| $				$ 0
CFO and COO
Stockholder's equity (Deficit)
Shares issued for services	402,000
Cash consideration \| $	$ 0
CSIO
Stockholder's equity (Deficit)
Shares issued for services	320,000
Cash consideration \| $	$ 0
Series A-1 Preferred Stock
Stockholder's equity (Deficit)
Preferred stock, authorized						24,000,000		24,000,000				24,000,000
Series B Preferred Stock
Stockholder's equity (Deficit)
Preferred stock, authorized						16,500,000		16,500,000				16,500,000
Warrants to purchase shares							1,399,921		1,399,921
Proceeds from Issuance of Warrants \| $			$ 3,700	$ 1,200
Warrants outstanding										0

STOCKHOLDERS EQUITY - Common Stock (Details) - USD ($)							3 Months Ended			9 Months Ended
STOCKHOLDERS EQUITY - Common Stock (Details) - USD ($)	Jul. 02, 2021	Oct. 15, 2020	Jun. 10, 2020	Jun. 08, 2020	Jan. 31, 2020	Jan. 24, 2020	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2021	Sep. 30, 2020
Common stock
Offering expenses										$ 2,881,900
Beginning balance							$ 12,025,000	$ 12,000,100	$ 11,975,400	11,975,400
Common stock discount amortization								24,900	24,700
Ending Balance							48,177,400	12,025,000	12,000,100	48,177,400
Series B Preferred Stock
Common stock
Shares issued			1,063,939	335,982	1,739,130	4,782,608					16,391,397
Initial Public Offering
Common stock
Common stock initial public offering proceeds, net of issuance costs		$ 12,332,700
Underwriting discounts and commissions		1,275,000
Offering expenses		$ 1,392,300
Shares issued		1,250,000
Share price		$ 12.00
Common stock discount amortization							25,200	$ 24,900	$ 24,700
Initial Public Offering \| Series A-1 Preferred Stock
Common stock
Stock issued on conversion		624,594
Initial Public Offering \| Series B Preferred Stock
Common stock
Stock issued on conversion		469,136
Public Offering
Common stock
Proceeds from issuance of common stock net of issuance costs	$ 37,118,100
Underwriting discounts and commissions	2,494,900
Offering expenses	$ 387,000
Shares issued	8,000,000
Share price	$ 5.00
Common stock issuance, net of underwriting discounts and commissions and other offering expenses							37,118,100
Common stock initial public offering discount							(1,051,200)			$ (1,051,200)
Common stock discount amortization							$ 60,300

STOCKHOLDERS EQUITY - Preferred Stock (Details) - USD ($)					3 Months Ended	9 Months Ended
	Jun. 10, 2020	Jun. 08, 2020	Jan. 31, 2020	Jan. 24, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Jan. 29, 2020
Stockholder's equity (Deficit)
Issuance of stock					$ 36,152,400
Preferred stock, authorized					60,000,000		60,000,000
Series B Preferred Stock
Stockholder's equity (Deficit)
Shares issued	1,063,939	335,982	1,739,130	4,782,608		16,391,397
Issuance of stock			$ 800,000	$ 2,200,000
Original issue price					$ 0.46
Preferred stock, authorized					16,500,000		16,500,000
Series B Preferred Stock \| Maximum
Stockholder's equity (Deficit)
Preferred stock, authorized								16,500,000

STOCKHOLDERS EQUITY - Initial value of issuances allocated to Series B Preferred Stock and the Series B Preferred Stock (Details) - Series B Preferred Stock - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2020
Stockholder's equity (Deficit)
Balance at beginning of period	$ 2,007,000	$ 1,306,900	$ 1,306,900
Series B Preferred Stock proceeds		3,000,000
Series B Preferred Stock discount		(2,668,300)
Series B Preferred Stock discount amortization	324,300	368,400	692,700
Balance at end of period	$ 2,331,300	$ 2,007,000	$ 2,331,300

STOCKHOLDERS EQUITY - Warrants Underlying Series B Preferred Stock (Details) - USD ($)					3 Months Ended	9 Months Ended
	Jun. 10, 2020	Jun. 08, 2020	Jan. 31, 2020	Jan. 24, 2020	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Stockholder's equity (Deficit)
Warrants to purchase shares	1,063,939	335,982
Fair value of warrants reflected as additional paid-in capital					$ 1,051,200
Proceeds from issuance of warrants	$ 3,700	$ 1,200					$ 4,900
Series B Preferred Stock
Stockholder's equity (Deficit)
Warrants to purchase					0.0859	0.0859
Warrant purchase price (in dollars per share)					$ 0.003494	$ 0.003494
Warrant expiration term					10 years	10 years
Shares issued	1,063,939	335,982	1,739,130	4,782,608			16,391,397
Warrants to purchase shares							1,399,921
Fair value of warrants reflected as additional paid-in capital							$ 5,533,000
Proceeds from issuance of warrants	$ 3,700	$ 1,200
Warrants outstanding								0
Series B Preferred Stock \| Warrants exercise beginning six months after the listing date
Stockholder's equity (Deficit)
Warrant exercise percentage						30.00%
Series B Preferred Stock \| Warrants exercise beginning nine months after the listing date
Stockholder's equity (Deficit)
Warrant exercise percentage						30.00%

STOCKHOLDERS EQUITY - Estimate the fair value of the warrants (Details) - Series B Preferred Stock Warrant	Sep. 30, 2020
Weighted average valuation assumptions
Warrants and Rights Outstanding, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueOptionPricingModelMember
Measurement Input, Risk Free Interest Rate \| Minimum
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0.0154
Measurement Input, Risk Free Interest Rate \| Maximum
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0.0188
Measurement Input, Price Volatility \| Minimum
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0.7195
Measurement Input, Price Volatility \| Maximum
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0.7271
Measurement Input, Expected Term
Weighted average valuation assumptions
Warrants and Rights Outstanding, Term	10 years
Measurement Input, Expected Dividend Rate
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0

STOCKHOLDERS EQUITY - Representative's Warrants (Details) - Common Stock Warrants - Representative	Jul. 02, 2021 $ / shares shares	Oct. 15, 2020 $ / shares shares	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Initial Public Offering
Weighted average valuation assumptions
Warrants fair value \| $			$ 282,500	$ 357,300
Warrants and Rights Outstanding, Valuation Technique [Extensible List]		us-gaap:ValuationTechniqueOptionPricingModelMember
Warrants and Rights Outstanding, Term		5 years
Warrants
Number of warrants granted \| shares		62,500
Warrant exercise price \| $ / shares		$ 15.00
Exercise price as a percentage of the initial offering price		125.00%
Public Offering
Weighted average valuation assumptions
Warrants fair value \| $			$ 991,000
Warrants and Rights Outstanding, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueOptionPricingModelMember
Warrants and Rights Outstanding, Term	5 years
Warrants
Number of warrants granted \| shares	400,000
Warrant exercise price \| $ / shares	$ 6.25
Exercise price as a percentage of the initial offering price	125.00%
Measurement Input, Risk Free Interest Rate \| Initial Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input		0.0018
Measurement Input, Risk Free Interest Rate \| Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0.0040
Measurement Input, Price Volatility \| Initial Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input		0.9408
Measurement Input, Price Volatility \| Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0.9827
Measurement Input, Expected Term \| Initial Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Term		2 years 8 months 26 days
Measurement Input, Expected Term \| Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Term	2 years 9 months
Measurement Input, Expected Dividend Rate \| Initial Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input		0
Measurement Input, Expected Dividend Rate \| Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Measurement Input	0

STOCK-BASED COMPENSATION - Weighted-average Assumptions (Details)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Weighted average assumptions
Expected dividend yield	0.00%
Stock Incentive Plan 2017 \| Stock Options
Weighted average assumptions
Risk-free interest rate	1.09%
Risk-free interest rate, minimum		0.15%
Risk-free interest rate, maximum		2.92%
Expected volatility	83.34%
Expected volatility, minimum		72.29%
Expected volatility, maximum		82.52%
Expected life (years)	6 years 2 months 19 days
Expected dividend yield	0.00%	0.00%
Stock Incentive Plan 2017 \| Stock Options \| Minimum
Weighted average assumptions
Expected life (years)		4 years 11 months 4 days
Stock Incentive Plan 2017 \| Stock Options \| Maximum
Weighted average assumptions
Expected life (years)		6 years 25 days

STOCK-BASED COMPENSATION - Summarizes Stock Options Outstanding (Details) - Stock Incentive Plan 2017 - Stock Options - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Stock option activity
Options outstanding at beginning of year	489,718	598,083
Granted	147,038	86,536
Exercised	(18,891)
Cancelled and forfeited	(64,427)	(66,109)
Balance at end of period	553,438	618,510
Options exercisable at June 30:	396,020	390,075
Intrinsic value of options exercised	$ 33,000
Weighted average exercise price
Options outstanding at beginning of year	$ 10.03	$ 11.04
Granted	8.47	17.95
Exercised	6.64
Cancelled and forfeited	17.67	15.06
Balance at end of period	8.84	11.58
Options exercisable at June 30:	8.87	8.51
Weighted average grant date fair value for options granted during the year:	$ 8.47	$ 17.43
Additional stock option information
Options outstanding, number	553,438	618,510
Options outstanding, weighted average remaining contractual life	6 years 5 months 26 days	7 years 9 months 14 days
Options outstanding, weighted average exercise price	$ 8.84	$ 11.58
Options outstanding, aggregate intrinsic value		$ 1,787,200
Options exercisable, number	396,020	390,075
Options exercisable, weighted average exercise price	$ 8.87	$ 8.51
Options exercisable, aggregate intrinsic value		$ 1,521,400

STOCK-BASED COMPENSATION - Stock Option Modifications (Details)			3 Months Ended		9 Months Ended
	Aug. 20, 2020 employee $ / shares shares	Jun. 08, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares
Stock compensation expense
Stock compensation expense		$ 9,432,000	$ 77,000	$ 329,000	$ 275,800	$ 1,228,000
Research and development
Stock compensation expense
Stock compensation expense			44,500	169,000	86,400	980,000
General and administrative
Stock compensation expense
Stock compensation expense			32,500	160,000	$ 189,400	$ 248,000
Stock Incentive Plan 2017 \| Stock Options
Stock compensation expense
Cancelled and forfeited \| shares					64,427	66,109
Number of individuals affected by modifications \| employee	4
Granted \| shares					147,038	86,536
Weighted average grant date fair value for options granted during the year: \| $ / shares					$ 8.47	$ 17.43
Total unrecognized stock compensation expense			919,900		$ 919,900
Weighted-average period over which cost not yet recognized is expected to be recognized					3 years 5 months 1 day
Stock Incentive Plan 2017 \| Stock Options \| Four Nonemployees
Stock compensation expense
Cancelled and forfeited \| shares	15,792
Granted \| shares	21,112
Weighted average grant date fair value for options granted during the year: \| $ / shares	$ 12.81
Options vested \| shares	3,959
Stock Incentive Plan 2017 \| Stock Options \| Four Nonemployees \| General and administrative
Stock compensation expense
Effect of modifications on stock compensation expense			0	71,600	$ 34,900	$ 71,600
Incremental compensation costs			$ 0	$ 19,700	$ 16,000	$ 19,700

STOCK-BASED COMPENSATION - Schedule 2017 Stock Incentive Plan-Restricted Stock Units (Details)			3 Months Ended		9 Months Ended
	Aug. 20, 2020 individual $ / shares shares	Jun. 08, 2020 USD ($)	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2021 shares	Jun. 25, 2021 shares	Jun. 19, 2020 shares	Jun. 18, 2020 shares	Jun. 17, 2020 shares	Sep. 25, 2019 shares	Sep. 24, 2019 shares	Jan. 31, 2017 shares
Restricted stock units
Stock compensation expense		$ 9,432,000	$ 77,000	$ 329,000	$ 275,800	$ 1,228,000
Research and development
Restricted stock units
Stock compensation expense			44,500	169,000	86,400	980,000
General and administrative
Restricted stock units
Stock compensation expense			32,500	160,000	189,400	248,000
Stock Incentive Plan 2017
Restricted stock units
Authorized shares \| shares									1,708,615	858,615	858,615	30,000,000	20,000,000
Stock Incentive Plan 2017 \| Restricted Stock Units
Restricted stock units
Authorized shares \| shares														1,708,615
Number of individuals affected by modifications \| individual	5
Stock compensation expense			$ 966,300	$ 920,000	$ 2,940,400	$ 920,000
Restricted stock unit activity
Nonvested RSUs at beginning of year \| shares					946,245
Granted \| shares	946,245				166,660	1,655,579
Vested \| shares	0				(37,802)
Cancelled and forfeited \| shares	(709,334)				(136,445)	(709,334)
Nonvested RSUs at end of period \| shares	12.81		938,658	946,245	938,658	946,245
Weighted average grant day fair value per share
Nonvested RSUs at beginning of year \| $ / shares					$ 12.81
Granted \| $ / shares					7.98	$ 15.23
Vested \| $ / shares					6.51
Cancelled and forfeited \| $ / shares	$ 12.87				12.79	19.00
Nonvested RSUs at end of period \| $ / shares			$ 12.28	$ 12.81	$ 12.28	$ 12.81
Stock Incentive Plan 2017 \| Restricted Stock Units \| Research and development
Restricted stock units
Stock compensation expense			$ 99,400	$ 299,000	$ 2,000,600	$ 299,000
Effect of modifications on stock compensation expense			62,300	299,000	598,900	299,000
Incremental compensation costs			11,500	65,600	52,500	65,600
Stock Incentive Plan 2017 \| Restricted Stock Units \| General and administrative
Restricted stock units
Stock compensation expense			866,900	621,000	939,800	621,000
Effect of modifications on stock compensation expense			108,500	621,000	1,286,800	621,000
Incremental compensation costs			25,300	$ 141,200	115,200	$ 141,200
Stock Incentive Plan 2017 \| Restricted Stock Units \| Non-Employees
Restricted stock units
Number of individuals affected by modifications \| individual	2
Stock Incentive Plan 2017 \| Restricted Stock Units \| Employees
Restricted stock units
Number of individuals affected by modifications \| individual	3
Stock Incentive Plan 2021
Restricted stock units
Authorized shares \| shares								200,000
Stock Incentive Plan 2021 \| Maximum
Restricted stock units
Authorized shares \| shares							217,292
Stock Incentive Plan 2021 \| Restricted Stock Units
Restricted stock units
Stock compensation expense			$ 62,000		$ 102,900
Restricted stock unit activity
Granted \| shares					102,613
Vested \| shares					(37,900)
Nonvested RSUs at end of period \| shares			64,713		64,713
Weighted average grant day fair value per share
Granted \| $ / shares					$ 5.20
Vested \| $ / shares					4.75
Nonvested RSUs at end of period \| $ / shares			$ 5.46		$ 5.46
Stock Incentive Plan 2021 \| Restricted Stock Units \| Research and development
Restricted stock units
Stock compensation expense			$ 11,000		$ 11,000
Stock Incentive Plan 2021 \| Restricted Stock Units \| General and administrative
Restricted stock units
Stock compensation expense			$ 51,000		$ 91,900

INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAXES (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
INCOME TAXES
Effective tax rate from continuing operations	0.00%	0.00%	0.00%	0.00%
Income tax provision	$ 0	$ 0	$ 0	$ 0
Federal statutory rate			21.00%
Realized deferred tax assets	$ 0		$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

RELATED PARTY TRANSACTIONS (Details)					3 Months Ended		9 Months Ended
RELATED PARTY TRANSACTIONS (Details)	Jun. 19, 2020 USD ($) shares	Sep. 04, 2019 USD ($)	Jul. 20, 2018 USD ($) item	Apr. 18, 2018 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 agreement	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($) agreement
Related party transactions
Number of separate consulting agreements \| agreement						2		2
Related party transactions					$ 0		$ 0
CSIO
Related party transactions
Consulting fee per hour			$ 400
Threshold number of hours per month for which consulting fees are entitled \| item			19
Consulting fee paid								$ 579,700
Shares issued for services rendered \| shares	320,000
Cash consideration	$ 0
CFO and COO
Related party transactions
Consulting fee paid								$ 140,000
Shares issued for services rendered \| shares	402,000
Cash consideration	$ 0
Consulting fee per month		$ 10,000		$ 2,500

SUBSEQUENT EVENTS (Details) - USD ($)		1 Months Ended
SUBSEQUENT EVENTS (Details) - USD ($)	Oct. 16, 2021	Nov. 30, 2021	Nov. 30, 2020	Mar. 07, 2022	Feb. 28, 2022	Dec. 31, 2020
Subsequent events
Note payable						$ 362,400
Director and Officer Insurance Policy Financing
Subsequent events
Note payable			$ 540,500			$ 362,400
Interest rate			4.59%
Note term			9 months
Subsequent Event
Subsequent events
Policy term	13 months
Subsequent Event \| Minimum
Legal complaint
Estimated loss from legal complaint				$ 0
Subsequent Event \| Maximum
Legal complaint
Estimated loss from legal complaint				$ 8,100,000
Subsequent Event \| Director and Officer Insurance Policy Financing
Subsequent events
Note payable		$ 665,900			$ 342,200
Interest rate		4.59%
Note term		10 months