0001558370-22-017860 | 10-Q | XBRL Viewer

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STOCKHOLDERS EQUITY - Representative's Warrants (Details) - USD ($)	Jul. 02, 2021	Oct. 15, 2020	Sep. 30, 2022	Dec. 31, 2021
Initial Public Offering
Weighted average valuation assumptions
Warrants fair value			$ 182,500	$ 257,300
Common Stock Warrants - Representative \| Initial Public Offering
Weighted average valuation assumptions
Warrants and Rights Outstanding, Term		5 years
Warrants
Number of warrants granted		62,500
Warrant exercise price		$ 15.00
Exercise price as a percentage of the initial offering price		125.00%
Common Stock Warrants - Representative \| Public Offering
Weighted average valuation assumptions
Warrants fair value			$ 746,200	$ 929,300
Warrants and Rights Outstanding, Term	5 years
Warrants
Number of warrants granted	400,000
Warrant exercise price	$ 6.25
Exercise price as a percentage of the initial offering price	125.00%

STOCK-BASED COMPENSATION - Stock Options (Details) - Stock Options - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Stock Incentive Plan 2017
Stock option activity
Options outstanding at beginning of year	380,909	489,718
Granted		147,038
Exercised		(18,891)
Cancelled and forfeited	(42,037)	(64,427)
Balance at end of period	338,872	553,438
Options exercisable at September 30:	336,108	369,020
Intrinsic value of options exercised		$ 33,000
Weighted average exercise price
Options outstanding at beginning of year	$ 8.57	$ 10.03
Granted		8.47
Exercised		6.64
Cancelled and forfeited	9.19	17.67
Balance at end of period	8.49	8.84
Options exercisable at September 30:	$ 8.53	8.87
Weighted average grant date fair value for options granted and expected to be vested during the year:		$ 8.47
Additional stock option information
Options outstanding, weighted average remaining contractual life	5 years 3 months 10 days	6 years 5 months 26 days
Options exercisable, aggregate intrinsic value	$ 0	$ 0
Stock Incentive Plan 2021
Stock option activity
Granted	734,400
Balance at end of period	734,400
Options exercisable at September 30:	550,800
Weighted average exercise price
Granted	$ 0.43
Balance at end of period	0.43
Options exercisable at September 30:	0.43
Weighted average grant date fair value for options granted and expected to be vested during the year:	$ 0.36

SUBSEQUENT EVENTS (Details)							1 Months Ended
SUBSEQUENT EVENTS (Details)	Oct. 31, 2022 shares	Oct. 21, 2022 USD ($)	Oct. 20, 2022 USD ($) $ / shares	Oct. 13, 2022 USD ($) D $ / shares shares	Oct. 10, 2022 USD ($) $ / shares	Sep. 26, 2022 USD ($) item $ / shares	Nov. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) $ / shares	Dec. 31, 2021 USD ($) $ / shares
Subsequent events
Common stock, par value (in dollars per share) \| $ / shares								$ 0.001	$ 0.001
Note payable									$ 454,500
Director and Officer Insurance Policy Financing
Subsequent events
Note payable							$ 665,900	$ 0	$ 454,500
Interest rate							4.59%
Note term							10 months
Empery Entities
Subsequent events
Cash settlement payments						$ 75,000
Convertible notes issued in settlement of legal proceedings						$ 1,656,720
Conversion price \| $ / shares						$ 0.3068
Maximum beneficial ownership percentage						9.99%
Empery Entities \| Maximum
Subsequent events
Maximum shares to be issued under conversion \| item						5,400,000
Sabby Entities
Subsequent events
Cash settlement payments						$ 75,000
Convertible notes issued in settlement of legal proceedings						$ 1,656,720
Conversion price \| $ / shares						$ 0.3068
Maximum beneficial ownership percentage						9.99%
Sabby Entities \| Maximum
Subsequent events
Maximum shares to be issued under conversion \| item						5,400,000
Subsequent Event \| 25% Senior Secured Convertible Promissory Note \| Convertible promissory notes
Subsequent events
Conversion price \| $ / shares			$ 0.35
Maximum beneficial ownership percentage			9.99%
Interest rate (as a percent)		25.00%
Convertible promissory notes		$ 2,000,000
Maximum shares to be issued under conversion			3,287,699
Interest rate increase to per annum		27.00%
Percentage of total issued and outstanding shares			19.90%
Subsequent Event \| SEPA
Subsequent events
Conversion price \| $ / shares					$ 0.3068
Maximum beneficial ownership percentage				9.99%
Commitment amount				$ 5,000,000
Common stock, par value (in dollars per share) \| $ / shares				$ 0.001
Amount of increase (decrease) in commitment to sell shares				$ 3,000,000
Term of anniversary				24 months
Percentage of market price				95.00%
Percentage of outstanding common stock on the date of agreement				19.90%
Threshold value of applicability of exchange cap				$ 0.3111
Number of trading days proceeding the date of agreement \| D				5
Amount of cash outflow for structuring fee				$ 10,000
Number of shares issued during period as in lieu of commitment fee \| shares				603,318
Amount of dividing factor for calculation of additional number of common stock to be issued				$ 120,000
Number of trading days prior to the date of delivery \| D				5
Shares issued for services \| shares	1,000,000
Subsequent Event \| Empery Entities
Subsequent events
Cash settlement payments					$ 75,000
Convertible notes issued in settlement of legal proceedings					$ 1,656,720
Conversion price \| $ / shares					$ 0.3068
Maximum beneficial ownership percentage					9.99%
Subsequent Event \| Sabby Entities
Subsequent events
Cash settlement payments					$ 75,000
Convertible notes issued in settlement of legal proceedings					$ 1,656,720
Maximum beneficial ownership percentage					9.99%

STOCKHOLDERS EQUITY - Common Stock (Details) - USD ($)		3 Months Ended						9 Months Ended
STOCKHOLDERS EQUITY - Common Stock (Details) - USD ($)	Jul. 02, 2021	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2021
Common stock
Offering expenses								$ 2,881,900
Beginning balance		$ 48,435,300	$ 48,349,400	$ 48,264,300	$ 12,025,000	$ 12,000,100	$ 11,975,400	11,975,400
Common stock discount amortization		86,900	85,900	85,100	(85,500)	24,900	24,700
Ending Balance		48,522,200	48,435,300	48,349,400	48,177,400	12,025,000	12,000,100	48,177,400
Initial Public Offering
Common stock
Common stock discount amortization		25,200	24,900	24,700	25,200	$ 24,900	$ 24,700
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	$ 457,000
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 discount					(1,051,200)			$ (1,051,200)
Common stock discount amortization		$ 61,700	$ 61,000	$ 60,400	$ 60,300

STOCK-BASED COMPENSATION - Restricted Stock Units (Details)		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 20, 2020 employee individual $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares	Dec. 31, 2021 $ / shares shares	Jun. 30, 2021 shares	Jan. 31, 2017 shares
Stock Incentive Plan 2017 \| Restricted Stock Units
Restricted stock units
Authorized shares								1,708,615
Number of individuals affected by modifications \| individual	5
Stock compensation expense \| $		$ 38,400	$ 966,300	$ 47,600	$ 2,940,400
Effect of modifications on stock compensation expense \| $		$ 0		$ 0
Restricted stock unit activity
Nonvested RSUs at beginning of year				510,851	946,245	946,245
Granted	946,245				166,660
Vested	0			(11,980)	(37,802)
Cancelled and forfeited	(709,334)			(338,988)	(136,445)
Nonvested RSUs at end of period		159,883	938,658	159,883	938,658	510,851
Weighted average grant day fair value per share
Nonvested RSUs at beginning of year \| $ / shares				$ 12.48	$ 12.81	$ 12.81
Granted \| $ / shares	$ 12.81				7.98
Vested \| $ / shares				9.90	6.51
Cancelled and forfeited \| $ / shares	$ 12.87			12.75	12.79
Nonvested RSUs at end of period \| $ / shares		$ 12.18	$ 12.28	$ 12.18	$ 12.28	$ 12.48
Stock Incentive Plan 2017 \| Restricted Stock Units \| Research and development
Restricted stock units
Stock compensation expense \| $		$ 17,300	$ 99,400	$ 31,200	$ 2,000,600
Effect of modifications on stock compensation expense \| $			62,300		598,900
Incremental compensation costs \| $			11,500		52,500
Stock Incentive Plan 2017 \| Restricted Stock Units \| General and administrative
Restricted stock units
Stock compensation expense \| $		21,100	866,900	$ 16,400	939,800
Effect of modifications on stock compensation expense \| $			108,500		1,286,800
Incremental compensation costs \| $			25,300		115,200
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 \| employee	3
Stock Incentive Plan 2017 \| Restricted Stock Units \| Previously Reported
Restricted stock unit activity
Nonvested RSUs at beginning of year				866,958
Vested						(37,802)
Nonvested RSUs at end of period						866,958
Weighted average grant day fair value per share
Nonvested RSUs at beginning of year \| $ / shares				$ 12.16
Vested \| $ / shares						$ 6.51
Nonvested RSUs at end of period \| $ / shares						$ 12.16
Stock Incentive Plan 2017 \| Restricted Stock Units \| Restated
Restricted stock unit activity
Nonvested RSUs at beginning of year				510,851
Vested						(393,909)
Nonvested RSUs at end of period						510,851
Weighted average grant day fair value per share
Nonvested RSUs at beginning of year \| $ / shares				$ 12.48
Vested \| $ / shares						$ 11.21
Nonvested RSUs at end of period \| $ / shares						$ 12.48
Stock Incentive Plan 2021 \| Maximum
Restricted stock units
Authorized shares							1,217,292
Stock Incentive Plan 2021 \| Restricted Stock Units
Restricted stock units
Stock compensation expense \| $		$ 241,800	$ 62,000	$ 297,300	$ 102,900
Restricted stock unit activity
Nonvested RSUs at beginning of year				62,049
Granted				738,298	102,613
Vested				(595,581)	(37,900)
Cancelled and forfeited				(7,936)
Nonvested RSUs at end of period		196,830	64,713	196,830	64,713	62,049
Weighted average grant day fair value per share
Nonvested RSUs at beginning of year \| $ / shares				$ 5.52
Granted \| $ / shares				0.41	$ 5.20
Vested \| $ / shares				1.28	4.75
Cancelled and forfeited \| $ / shares				4.22
Nonvested RSUs at end of period \| $ / shares		$ 1.44	$ 5.46	$ 1.44	$ 5.46	$ 5.52
Stock Incentive Plan 2021 \| Restricted Stock Units \| Research and development
Restricted stock units
Stock compensation expense \| $		$ 21,800	$ 11,000	$ 47,500	$ 11,000
Stock Incentive Plan 2021 \| Restricted Stock Units \| General and administrative
Restricted stock units
Stock compensation expense \| $		$ 220,000	$ 51,000	$ 249,800	$ 91,900

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nonvested Stock Options (Details)	9 Months Ended
	Sep. 30, 2022
Nonvested Stock Options
Expected dividend yield	0.00%

LEASES - Operating lease liability maturities (Details)	Sep. 30, 2022 USD ($)
Operating leases
2022	$ 169,400
2023	684,300
2024	687,700
2025	694,300
2026	232,600
Total lease payments	2,468,300
Less: imputed interest	(294,200)
Present value of lease payments	$ 2,174,100

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	300,000,000	300,000,000
Common stock, issued	15,843,191	15,488,516
Common stock, outstanding	15,843,191	15,488,516
Preferred stock, authorized	60,000,000	60,000,000
Preferred Stock
Preferred stock, par value ( in dollars per share)	$ 0.0001	$ 0.0001
Series A-1 Preferred Stock
Preferred stock, authorized	24,000,000	24,000,000
Series B Preferred Stock
Preferred stock, authorized	16,500,000	16,500,000

NET LOSS PER SHARE OF COMMON STOCK (Tables)

9 Months Ended

Sep. 30, 2022

NET LOSS PER COMMON SHARE

Schedule of earnings per share, basic and diluted


	Three Months Ended				Nine Months Ended
	September 30,				September30,
	2022		2021		2022		2021
Net loss	$	(11,860,300)	$	(6,124,800)	$	(27,663,200)	$	(14,953,600)
Less: Initial Public Offering Common Stock discount amortization		(25,200)		(25,200)		(74,800)		(74,800)
Less: Public Offering Common Stock discount amortization		(61,700)		(60,300)		(183,100)		(60,300)
Net loss attributable to common shareholders, basic and diluted	$	(11,947,200)	$	(6,210,300)	$	(27,921,100)	$	(15,088,700)
Weighted average common shares outstanding, basic and diluted		15,840,454		15,366,075		15,706,079		10,048,170
Net loss per common share, basic and diluted	$	(0.75)	$	(0.40)	$	(1.78)	$	(1.50)

LEASES - Balance sheet disclosures (Details)	Sep. 30, 2022 USD ($)
Leases
Operating lease right-of-use asset	$ 2,164,500
Operating lease liability - short term	(547,800)
Operating lease liability - long term	(1,626,300)
Total lease liabilities	$ (2,174,100)

PROPERTY AND EQUIPMENT (Details) - USD ($)	3 Months Ended		9 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	$ 10,835,500		$ 10,835,500		$ 4,660,500
Less: Accumulated depreciation	(2,150,000)		(2,150,000)		(1,031,500)
Total	8,685,500		8,685,500		3,629,000
Depreciation	536,600	$ 128,800	1,118,500	$ 331,200
Equipment
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	2,722,800		2,722,800		1,593,100
Leasehold improvements
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	7,193,700		7,193,700		1,464,700
Office furniture, fixtures, and equipment
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	137,300		137,300		16,600
Software
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	359,500		359,500		359,500
Construction in progress
PROPERTY AND EQUIPMENT
Property, Plant and Equipment, Gross	$ 422,200		$ 422,200		$ 1,226,600

STOCKHOLDERS EQUITY

9 Months Ended

Sep. 30, 2022

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

10.STOCKHOLDERS’ EQUITY

Common Stock—As of September 30, 2022 and December 31, 2021, the Company has a single class of common stock.

On July 2, 2021, the Company received net proceeds of $37,118,100 from its public offering, after deducting underwriting discounts and commissions of $2,494,900 and other offering expenses of $457,000 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:


	2022		2021
Common Stock
Balance at January 1,	$	48,264,300	$	11,975,400
Common stock initial public offering discount amortization		24,700		24,700
Common stock public offering discount amortization		60,400		—
Balance at March 31,	$	48,349,400	$	12,000,100
Common stock initial public offering discount amortization		24,900		24,900
Common stock public offering discount amortization		61,000		—
Balance at June 30,	$	48,435,300	$	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 initial public offering discount amortization		25,200		25,200
Common stock public offering discount amortization		61,700		60,300
Balance at September 30,	$	48,522,200	$	48,177,400

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 were not exercisable prior to April 13, 2021. All of the Underwriters’ Warrants were outstanding and exercisable at September 30, 2022.

These warrants were equity classified. As of September 30, 2022 and December 31, 2021, the warrant fair values of $182,500 and $257,300, respectively, is reflected as additional paid-in capital.

In connection with the public offering on July 2, 2021, the Company granted the underwriters warrants (the “Additional 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 Additional Underwriters’ Warrants have a five-year term and are not exercisable prior to January 2, 2022. All of the Additional Underwriters’ Warrants were outstanding at September 30, 2022.

These warrants were equity classified. As of September 30, 2022 and December 31, 2021, the fair value of the warrants was $746,200 and $929,300, respectively, and is reflected as additional paid-in capital.

- 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

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+ Details

ORGANIZATION

9 Months Ended

Sep. 30, 2022

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.

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 (“GDTs”) to target solid cancers. The Company maintains offices in Houston, Texas. The Company has not generated any revenues to date.

From a development standpoint, the Company utilizes innovative engineered and non-engineered GDT manufacturing technologies and is developing proprietary, virus-free gene editing tools, to develop novel therapies for solid tumors that we believe will be effective and cost-efficient. The Procel, Isocel, and Deltacel product platform candidates consist of allogeneic cell therapy candidates that are currently in the preclinical development stage. Our Procel product candidate consists of engineered GDTs targeting PD-L1. Our Isocel product candidate consists of engineered GDTs targeting Mesothelin Isoform 2 positive tumors (“Iso-Meso”). Our Deltacel product candidate consists of non-engineered GDTs that have been expanded, enriched, and activated ex-vivo through a proprietary process, and are used to treat solid tumors regardless of the specific tumor antigen expression.

The Company currently has one clinical trial candidate with the Procel product candidate platform titled ALEXIS-PRO-1. The Company currently has one clinical trial candidate with the Isocel product candidate platform titled ALEXIS-ISO-1. The ALEXIS-PRO-1 clinical trial candidate is our allogeneic GDT therapy product candidate targeting PD-L1. The ALEXIS-ISO-1 clinical trial candidate is our allogeneic GDT therapy product candidate targeting an isoform of Mesothelin that is preferentially present on tumor cells, namely Iso-Meso.

The Company filed two investigational new drug (“IND”) applications in May 2021 for ALEXIS-PRO-1 and ALEXIS-ISO-1. The Food and Drug Administration (“FDA”) placed these applications under a clinical hold in June 2021. 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. Those components included tracing of all reagents used in manufacturing, flow chart of manufacturing processes, and certificate of analysis. The Company is currently working on addressing 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 $19,643,400 for the nine months ended September 30, 2022, and an accumulated deficit of $94,879,700 as of September 30, 2022. 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, obtaining funding from current or new investors. However, there can be no assurance that the Company will be able to secure 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. In the event the Company is unable to secure financing sufficient to allow it to meet its obligations as they become due, the Company may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation.

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.

LEASES

9 Months Ended

Sep. 30, 2022

Leases

LEASES

9.LEASES

The Company adopted FASB ASU No. 2016-02, Leases (Topic 842) on January 1, 2022, using the modified retrospective method, in which it did not restate prior periods. Upon adoption, the Company elected the package of practical expedients permitted under the transition guidance within Topic 842 which, among other things, allowed the Company to carry forward the historical lease classification.

In our implementation of ASU No. 2016-02 the Company elected to discount lease obligations using our incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company’s incremental borrowing rate represents the rate of interest that it would have to pay to borrow over a similar term an amount equal to the lease payments in a similar economic environment. The Company considers publicly available data for instruments with similar terms and characteristics when determining its incremental borrowing rates. In addition, we elected the practical expedient to account for the lease and non-lease components on a combined basis. The Company intends to use the full lease term under the existing lease agreement as the lease term, which is currently set to expire on April 30, 2026. As of September 30, 2022, the Company is not able to determine if any renewal options will be exercised.

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 Company’s board of directors 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.

Two further amendments were executed in 2021. The agreements commenced on November 1, 2021, and December 1, 2021 under an operating lease agreement that is noncancelable from commencement until May 1, 2024. The amended lease agreement adds approximately 3,684 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.

An amendment to the lease agreement was executed in January 2022 and commenced May 1, 2022. The amendment will add approximately 9,352 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. In year one and two monthly rent is $4,800 per month, in year three and four monthly rent is $4,896 per month, and in year five monthly rent is $5,000 per month.

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 following table indicates the balance sheet line items that include the right-of-use assets and lease liabilities for our operating lease:


	September 30,
	2022
	Operating lease
Right-of-Use Asset
Operating lease	$	2,164,500
Total right-of use asset		2,164,500

Lease Liabilities
Operating lease - short term	$	(547,800)
Operating lease - long term		(1,626,300)
Total lease liabilities		(2,174,100)

For the three and nine months ended September 30, 2022, the components of lease expense were as follows:


	Three Months Ended			Nine Months Ended
	September 30,			September 30,
Operating lease cost allocated to research and development expense	$	132,700		$	346,400
Operating lease cost allocated to general and administrative expense		38,900			145,200
Total lease expense	$	171,600		$	491,600
Weighted-average remaining lease term		3.59			3.59
Weighted-average discount rate		7.12	%		7.12	%

As of September 30, 2022 the maturities of the Company’s operating lease liabilities were as follows:


Maturity of Lease Liabilities		Operating lease
2022	$	169,400
2023		684,300
2024		687,700
2025		694,300
2026		232,600
Total lease payments		2,468,300
Less: imputed interest		(294,200)
Present value of lease payments		2,174,100

The Company maintains a month to month lease in Arlington, VA, which is considered a short term lease. The Company elected to exclude this lease from the determination of the right-of-use asset and lease liability, as permitted under ASC 842. The Company will recognize the lease payments in profit or loss in the statement of operations on a straight-line basis over the term of the lease. The monthly rent expense as of June 30, 2022 is $2,500 per month. For the three and nine months ended September 30, 2022, short-term lease expense was $7,500 and $22,500, respectively.

Under ASC 840, rent expense recognized under the leases was $126,900 and $270,800 for the three and nine months ended September 30, 2021.

ORGANIZATION (Details) - USD ($)	9 Months Ended
ORGANIZATION (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
ORGANIZATION
Cash flow from operations	$ (19,643,400)	$ (11,156,300)
Accumulated deficit	$ (94,879,700)		$ (67,216,500)

- Definition

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

+ References + Details

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, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
NET LOSS PER COMMON SHARE
Net loss	$ (11,860,300)	$ (8,435,100)	$ (7,367,800)	$ (6,124,800)	$ (4,974,300)	$ (3,854,500)	$ (27,663,200)	$ (14,953,600)
Less: Initial Public Offering Common Stock discount amortization	(25,200)			(25,200)			(74,800)	(74,800)
Less: public offering Common Stock discount amortization	(61,700)			(60,300)			(183,100)	(60,300)
Net loss attributable to common shareholders, basic	(11,947,200)			(6,210,300)			(27,921,100)	(15,088,700)
Net loss attributable to common shareholders, diluted	$ (11,947,200)			$ (6,210,300)			$ (27,921,100)	$ (15,088,700)
Weighted average common shares outstanding, basic	15,840,454			15,366,075			15,706,079	10,048,170
Weighted average common shares outstanding, diluted	15,840,454			15,366,075			15,706,079	10,048,170
Net loss per common share, basic	$ (0.75)			$ (0.40)			$ (1.78)	$ (1.50)
Net loss per common share, diluted	$ (0.75)			$ (0.40)			$ (1.78)	$ (1.50)

INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAXES (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
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%	21.00%	21.00%	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

NOTE PAYABLE (Details) - USD ($)	1 Months Ended
NOTE PAYABLE (Details) - USD ($)	Nov. 30, 2021	Sep. 30, 2022	Dec. 31, 2021
Note payable
Note payable			$ 454,500
Director and Officer Insurance Policy Financing
Note payable
Note payable	$ 665,900	$ 0	$ 454,500
Interest rate	4.59%
Note term	10 months

STOCK-BASED COMPENSATION - Weighted-average Assumptions (Details)	9 Months Ended
	Sep. 30, 2022
Weighted average assumptions
Expected dividend yield	0.00%
Stock Incentive Plan 2017 \| Stock Options
Weighted average assumptions
Risk-free interest rate	1.09%
Expected volatility	83.34%
Expected life (years)	6 years 2 months 19 days
Expected dividend yield	0.00%
Stock Incentive Plan 2021 \| Stock Options
Weighted average assumptions
Risk-free interest rate	2.99%
Expected volatility	119.55%
Expected life (years)	5 years 1 month 6 days
Expected dividend yield	0.00%

LEASES - Short-term Lease (Details) - USD ($)	3 Months Ended		9 Months Ended
LEASES - Short-term Lease (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases
Short-term lease expense	$ 7,500		$ 22,500
Monthly rent expense on short-term lease			$ 2,500
Rent expense		$ 126,900		$ 270,800

STOCKHOLDERS EQUITY (Tables)

9 Months Ended

Sep. 30, 2022

STOCKHOLDERS' EQUITY

Schedule of initial value of issuances allocated to the IPO and public offering of common stock and the IPO and public offering common stock discount amortization


	2022		2021
Common Stock
Balance at January 1,	$	48,264,300	$	11,975,400
Common stock initial public offering discount amortization		24,700		24,700
Common stock public offering discount amortization		60,400		—
Balance at March 31,	$	48,349,400	$	12,000,100
Common stock initial public offering discount amortization		24,900		24,900
Common stock public offering discount amortization		61,000		—
Balance at June 30,	$	48,435,300	$	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 initial public offering discount amortization		25,200		25,200
Common stock public offering discount amortization		61,700		60,300
Balance at September 30,	$	48,522,200	$	48,177,400

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently issued accounting pronouncements (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Sep. 30, 2022
Adoption of accounting pronouncements
Operating lease liability		$ 2,174,100
Operating lease right-of-use asset		$ 2,164,500
Cumulative Effect, Period of Adoption, Adjustment
Adoption of accounting pronouncements
Operating lease liability	$ 2,232,700
Operating lease right-of-use asset	$ 2,232,700
Accounting Standards Update [Extensible Enumeration]	us-gaap:AccountingStandardsUpdate201602Member

- Definition

Indicates amendment to accounting standards.

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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	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. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2021. The results of operations for the period ended September 30, 2022 are not necessarily indicative of the operating results that may be expected for a full year. The condensed consolidated balance sheet as of December 31, 2021 contains financial information taken from the audited Company consolidated financial statements as of that date. All intercompany balances were eliminated upon consolidation.
Use of Estimates	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.
Concentrations of Credit Risk and Other Uncertainties	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.
Income Taxes	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 and nine months ended September 30, 2022 or 2021.
Research and Development Expense	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.
Stock-Based Compensation	Stock-Based Compensation—The Company records stock compensation expense related to the 2017 Equity Incentive Plan (the “2017 Plan”) and the 2021 Omnibus Equity Incentive Plan (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. 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 uses 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, 2022 and 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. Future expense amounts for any particular period could be affected by changes in assumptions or 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	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, the Company has adopted Topic 842 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. The Company notes that adopting the new standard resulted in recording a lease liability and right-of-use asset associated with the Company’s facility lease agreement and subsequent amendments thereto totaling $2,232,700, as of January 1, 2022. 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.

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

LOAN PAYABLE

9 Months Ended

Sep. 30, 2022

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 Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (the “SBA”).

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 the condensed consolidated statement of operations during the nine months ended September 30, 2021.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued consulting and outside services	$ 137,400	$ 467,100
Accrued compensation	466,600	273,900
Total	$ 604,000	$ 741,000

LEASES (Tables)

9 Months Ended

Sep. 30, 2022

Leases

Schedule of lessee's operating lease right-of-use assets and lease liabilities


	September 30,
	2022
	Operating lease
Right-of-Use Asset
Operating lease	$	2,164,500
Total right-of use asset		2,164,500

Lease Liabilities
Operating lease - short term	$	(547,800)
Operating lease - long term		(1,626,300)
Total lease liabilities		(2,174,100)

Schedule of components of lease expense


	Three Months Ended			Nine Months Ended
	September 30,			September 30,
Operating lease cost allocated to research and development expense	$	132,700		$	346,400
Operating lease cost allocated to general and administrative expense		38,900			145,200
Total lease expense	$	171,600		$	491,600
Weighted-average remaining lease term		3.59			3.59
Weighted-average discount rate		7.12	%		7.12	%

Schedule of maturities of operating lease liabilities

As of September 30, 2022 the maturities of the Company’s operating lease liabilities were as follows:


Maturity of Lease Liabilities		Operating lease
2022	$	169,400
2023		684,300
2024		687,700
2025		694,300
2026		232,600
Total lease payments		2,468,300
Less: imputed interest		(294,200)
Present value of lease payments		2,174,100

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2022

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,
	2021
Risk-free interest rate	1.09	%
Expected volatility	83.34	%
Expected life (years)	6.22
Expected dividend yield	0	%

Schedule of stock option activity


	2022			2021
		Weighted			Weighted
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price
Options outstanding at beginning of year	380,909	$	8.57	489,718	$	10.03
Granted	—		—	147,038		8.47
Exercised	—		—	(18,891)		6.64
Cancelled and forfeited	(42,037)		9.19	(64,427)		17.67
Balance at September 30	338,872	$	8.49	553,438	$	8.84
Options exercisable at September 30:	336,108	$	8.53	369,020	$	8.87
Weighted average grant date fair value for options granted during the year:		$	—		$	8.47

Schedule of stock-based compensation


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	9,000	$	44,500	$	61,000	$	86,400
General and administrative		8,000		32,500		23,000		189,400
Total	$	17,000	$	77,000	$	84,000	$	275,800

Stock Incentive Plan 2017 | Restricted Stock Units

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

Schedule of restricted stock unit activity


	2022			2021
		Weighted Average			Weighted Average
		Grant Date			Grant Date
		Fair Value			Fair Value
	Shares	Per Share		Shares	Per Share
Nonvested RSUs at beginning of year, as restated	510,851	$	12.48	946,245	$	12.81
Granted	—		—	166,660		7.98
Vested	(11,980)		9.90	(37,802)		6.51
Cancelled and forfeited	(338,988)		12.75	(136,445)		12.79
Nonvested RSUs at September 30,	159,883	$	12.18	938,658	$	12.28

Schedule of stock-based compensation


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	17,300	$	99,400	$	31,200	$	2,000,600
General and administrative		21,100		866,900		16,400		939,800
Total	$	38,400	$	966,300	$	47,600	$	2,940,400

Stock Incentive Plan 2021 | Stock Options

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

Schedule of assumptions used to estimate fair value of stock options


	2022
Risk-free interest rate	2.99	%
Expected volatility	119.55	%
Expected life (years)	5.1
Expected dividend yield	0	%

Schedule of stock option activity


	2022
		Weighted
		Average
		Exercise
	Shares	Price
Options outstanding at beginning of year	—	$	—
Granted	734,400		0.43
Exercised	—		—
Cancelled and forfeited	—		—
Balance at September 30	734,400	$	0.43
Options exercisable at September 30:	550,800	$	0.43
Weighted average grant date fair value for options granted during the year:		$	0.36

Stock Incentive Plan 2021 | Restricted Stock Units

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

Schedule of restricted stock unit activity


	2022			2021
		Weighted Average			Weighted Average
		Grant Date			Grant Date
		Fair Value			Fair Value
	Shares	Per Share		Shares	Per Share
Nonvested RSUs at beginning of year	62,049	$	5.52	—	$	—
Granted	738,298		0.41	102,613		5.20
Vested	(595,581)		1.28	(37,900)		4.75
Cancelled and forfeited	(7,936)		4.22	—		—
Nonvested RSUs at September 30,	196,830	$	1.44	64,713	$	5.46

Schedule of stock-based compensation


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	21,800	$	11,000	$	47,500	$	11,000
General and administrative		220,000		51,000		249,800		91,900
Total	$	241,800	$	62,000	$	297,300	$	102,900

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2022

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	September 30,		December 31,
	2022		2021
Accrued consulting and outside services	$	137,400	$	467,100
Accrued compensation		466,600		273,900
Total	$	604,000	$	741,000

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2022

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

13.SUBSEQUENT EVENTS

Joseph Podmore Class Action Litigation

On October 3, 2022, Joseph Podmore (“Podmore”) filed a class action complaint in the United States District Court for the Southern District of New York covering the same subject matter as the Sabby Entities’ and Empery Entities’ claim discussed above asserting claims against the Company and certain current and former officers and directors for alleged violations of Sections 11, 12, and 15 of the Securities Act in connection with the purchase of common stock through the Company’s public offering that closed on July 2, 2021 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in connection with the certain statements and acts made by the defendants between June 25, 2021 and August 13, 2021. The Company has evaluated the Podmore class claims and has determined that it is not possible to estimate a potential range of loss at this time.

Stipulation of Settlement and Mutual Release with Sabby Entities and Empery Entities

On October 10, 2022, the Company and certain current and former officers and directors of the Company (together with the Company, the “Defendants”) entered into a Stipulation of Settlement and Mutual Release (the “Initial Settlement Agreements”) with the Empery Entities and with the Sabby Entities (collectively, the “Plaintiffs”), respectively, in connection with a case filed by the Plaintiffs against the Defendants for alleged violations of Sections 11, 12, and 15 of the Securities Act in connection with the purchase of Company’s common stock through the Company’s public offering that closed on July 2, 2021. The Plaintiffs and the Defendants agreed to dismiss the case with prejudice against all Defendants (including ThinkEquity, LLC) with no admission of liability. As part of the Settlement, the Company agreed to (a) make a $75,000 cash payment to each of the Empery Entities and Sabby Entities and (b) issue the Settlement Notes in the aggregate principal amount of $1,656,720 to each of the Empery Entities and Sabby Entities. The Settlement Notes are convertible into shares of the Company’s common stock (the “Conversion Shares”) at an initial conversion price per share of $0.3068 (the “Conversion Price”), subject to a beneficial ownership limitation equivalent to 9.99% (“Beneficial Ownership Limitation”).

On October 27, 2022, the Defendants entered into an Amended Stipulation of Settlement and Mutual Release with the Empery Entities (the “Amended Empery Settlement Agreement”) and Sabby (together with the Amended Empery Settlement Agreement, the “Amended Settlement Agreements”), respectively. On November 2, 2022, the Court granted the Joint Motion, pursuant to which the Settlement Notes will be unrestricted and exempt from the registration requirements of the Securities Act, and the Conversion Shares, when issued upon conversion of the Settlement Notes in accordance with the terms set forth therein, will also be unrestricted and exempt from the registration requirements of the Securities Act.

Standby Equity Purchase Agreement Financing

On October 13, 2022, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (the “Investor”). Pursuant to the SEPA, the Company has the right to sell to the Investor up to $5,000,000 (the “Commitment Amount”) of its shares of common stock, par value $0.001 per share (“Common Stock”), subject to increase by an additional $3,000,000 of Common Stock at the Company’s election (the “Commitment Increase”), at the Company’s request any time during the commitment period commencing on October 13, 2022 and terminating on the earliest of (i) the first day of the month following the 24-month anniversary of the SEPA or (ii) the date on which the Investor has paid for shares of Common Stock equal to the Commitment Amount.

The shares would be purchased at 95.0% of the Market Price (as defined in the agreement) and would be subject to certain limitations, including that the Investor could not purchase any shares that would result in it owning more than 9.99% of the outstanding Common Stock after such purchase (the "Ownership Limitation") or an aggregate of 19.9% of the outstanding Common Stock as of the date of the SEPA (the "Exchange Cap"). The Exchange Cap will not apply under

certain circumstances, including to any sales of Common Stock under the SEPA that equal or exceed $0.3111, representing the lower of (i) the closing price of the Common Stock as reflected on Nasdaq.com immediately preceding the date of the SEPA, or (ii) the average closing price of the Common Stock for the five trading days immediately preceding the date of the SEPA.

Pursuant to the SEPA, the Company also paid a subsidiary of the Investor, a structuring fee in the amount of $10,000 and issued to the Investor 603,318 shares of Common Stock as a commitment fee on October 13, 2022 (the “Commitment Shares”). In the event of the Commitment Increase, the Company will issue to the Investor an additional number of shares of Common Stock determined by dividing $120,000 by the average of the daily VWAPs for the five trading days prior to the date of delivery by the Company of written notice of the Commitment Increase.

In connection with the SEPA agreement, on October 31, 2022, the Company entered into a letter agreement with an accredited investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor 1,000,000 shares (the “Shares”) of the Company’s common stock in consideration of the Investor’s services to the Company in identifying investors. The Company issued the Shares to the Investor on October 31, 2022. The Shares were issued in reliance upon the exemption from the registration requirements of the Securities Act, provided by Section 4(a)(2) of the Securities Act as sales by an issuer not involving any public offering.

Senior Secured Convertible Note Financing

On October 21, 2022 (the “Issuance Date”), the Company issued a 25% Senior Secured Convertible Promissory Note (the “Note”) to an accredited investor. The Note has a principal amount of $2,000,000, bears interest at a rate of 25% per annum (the “Stated Rate”) and matures on October 21, 2023 (the “Maturity Date”), on which date the principal balance and accrued but unpaid interest are due and payable. The Stated Rate will increase to 27% per annum or the highest rate then allowed under applicable law (whichever is lower) upon occurrence of an event of default, including the failure by the Company to make payment of principal or interest due under the Note on the Maturity Date, and any commencement by the Company of a case under any applicable bankruptcy or insolvency laws.

The Note is convertible into shares of the Company’s Common Stock, at an initial conversion price of $0.35 per share, subject to a beneficial ownership limitation equivalent to 9.99% (the “Beneficial Ownership Limitation”) and a share cap of 3,287,699 shares (the “Share Cap”), representing 19.9% of the total issued and outstanding shares of Common Stock as of October 20, 2022.

The unpaid principal of and interest on the Note constitute unsubordinated obligations of the Company and are senior and preferred in right of payment to all subordinated indebtedness and equity securities of the Company outstanding as of the Issuance Date; provided, however, that the Company may incur or guarantee additional indebtedness after the Issuance Date, whether such indebtedness are senior, pari passu or junior to the obligations under the Note, which are secured by all of the Company’s right, title and interest, in and to, (i) all fixtures (as defined in the Uniform Commercial Code, the “UCC”) and equipment (as defined in the UCC), and (ii) all of the Company’s intellectual property as specified in the Note, subject to certain exclusions as described in the Note.

Pursuant to the Note, the Company is required to file a Registration Statement with the SEC to register the conversion shares within 30 days after the Conversion Share Delivery Date (as defined in the Note) and shall use its commercially reasonable efforts to have the Registration Statement declared effective by the SEC.

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 432,700	$ 25,353,900
Accounts receivable		16,200
Prepaid expenses and other current assets	1,705,500	1,699,400
Total current assets	2,138,200	27,069,500
Property and equipment, net	8,685,500	3,629,000
Operating lease right-of-use asset	2,164,500
Other assets	31,100	31,100
Total Assets	13,019,300	30,729,600
Current Liabilities:
Accounts payable	6,494,100	2,214,300
Accrued expenses and other current liabilities	604,000	741,000
Note payable		454,500
Accrued litigation liability	3,463,000
Operating lease liability - short term	547,800
Total current liabilities	11,108,900	3,409,800
Operating lease liability - long term	1,626,300
Total Liabilities	12,735,200	3,409,800
Commitments and contingencies
Stockholders' Equity:
Common stock, $0.001 par value: 300,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 15,843,191 shares and 15,488,516 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	9,300	9,300
Preferred stock, $0.0001 par value: 60,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 24,000,000 shares designated as Series A-1 Preferred Stock and 16,500,000 shares designated as Series B Preferred Stock as of September 30, 2022 and December 31, 2021
Additional paid-in capital	95,154,500	94,527,000
Accumulated deficit	(94,879,700)	(67,216,500)
Total Stockholders' Equity	284,100	27,319,800
Total Liabilities and Stockholders' Equity	$ 13,019,300	$ 30,729,600

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

8.COMMITMENTS AND CONTINGENCIES

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, 2022 and December 31, 2021, the Company has not incurred any milestone or royalty liabilities related to these license agreements.

Legal Proceedings— On March 22, 2021, Jason Terrell (“Terrell”), a former consultant and former director of the Company, commenced an action against us in the Court of Chancery of the State of Delaware, C.A. No. 2021-0248-MTZ (the “Action”). In the Action, Terrell seeks a declaratory judgment that the Company is obligated to issue him (i) options to purchase 500,000 shares of common stock at a price of $0.50 per share pursuant to an alleged 2014 consulting agreement, and (ii) options to purchase an additional 500,005 shares of common stock at a price of $0.17 per share pursuant to an alleged January 2017 non-employee director options agreement. In his complaint, Terrell also claimed that, pursuant to the operative certificate of incorporation, he is entitled to indemnification from us for attorneys’ fees and costs he incurs in connection with the Action because the Action arises in connection with his position as a former director.

The Company disputes Terrell’s claims and allegations in the Action and intends to vigorously defend against them. On May 21, 2021, the Company filed a motion to dismiss Terrell’s claims in the actions with prejudice, arguing that (i) Terrell’s options-related claims fail because his 2014 and January 2017 agreements were explicitly superseded by a later options agreement, under which Terrell relinquished his prior options; and (ii) Terrell is not entitled to indemnification because the Action relates to contracts between the Company and Terrell in his personal capacity, and not in connection with any activities or duties of Terrell in his official capacity as former director. In response to the motion, filed on June 21, 2021, Terrell withdrew his claim for indemnification, but opposed the portion seeking dismissal of his declaratory judgment claim. The motion was fully briefed with the filing of the Company’s reply brief on July 7, 2021.

Oral argument was held before the Vice Chancellor on October 20, 2021. During oral argument, the Vice Chancellor invited the parties to submit supplemental letter briefs on the question of whether the Court of Chancery even had the authority to adjudicate the Action in light of the delegation of authority in Terrell’s most recent stock option agreement with the Company (the “SOA”) to the Company’s Compensation Committee to resolve all disputes regarding the interpretation of the SOA. The parties submitted simultaneous supplemental letters briefs on this issue on November 15, 2021. On January 20, 2022, the Vice Chancellor issued her decision on our motion to dismiss, ruling that the Action is stayed until the Compensation Committee itself resolves whether it has sole authority to resolve the parties’ contract interpretation dispute.

Subsequently, the parties agreed upon a process for coordinating submissions and/or presentations to the Compensation Committee. The parties made their respective written submissions to the Compensation Committee on March 31, 2022, and on July 21, 2022, the Compensation Committee determined that (i) the Compensation Committee has sole authority under the SOA to resolve the parties’ contract interpretation dispute, and (ii) Terrell’s most recent options agreement superseded and nullified any option rights Terrell may have had under his prior agreements. On August 2, 2022, the Vice Chancellor issued an order dismissing the Action for lack of subject matter jurisdiction.

On August 23, 2022, Terrell filed a notice of appeal of the Vice Chancellor’s order of dismissal to the Delaware Supreme Court. That same day, the Delaware Supreme Court set a briefing schedule for the appeal, under which Terrell’s opening brief and appendix were due October 7, 2022, Kiromic’s answering brief and appendix are due November 7, 2022, and Terrell’s reply appellate brief is due 15 days thereafter. Terrell filed his opening brief and appendix on October 7, 2022, and Kiromic is set to file its answering brief on November 7, 2022. The Delaware Supreme Court has not yet designated this appeal for oral argument.

In a separate matter, 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 the Company’s complaint hotline. These Complaints, alleged, among other topics, risks associated with the Company’s public disclosures in securities filings and in statements made to the public, investors, and potential investors regarding (i) the anticipated timing of the FDA authorization of the 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 FDA Communications”). The Company did not disclose the June 16 and 17, 2021 FDA Communications in 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”). The Company then consummated a public offering of $40 million of its common stock pursuant to the Registration Statement on July 2, 2021. 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 did not disclose the clinical hold in its Form 10-Q for the fiscal quarter ended June 30, 2021 that was filed with the Securities and Exchange Commission on August 13, 2021. On August 13, 2021, the Company issued a press release announcing that these INDs were placed on clinical hold.

As a result of the disclosure omission of the June 16 and 17 FDA Communications, 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 United States District Court for the Southern District of New York asserting 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. On July 1, 2022, the defendants filed motions to dismiss the complaint. In response, on July 22, 2022, the plaintiffs amended their complaint to, among other things, include the Company’s underwriters on the July 2, 2021 public offering, ThinkEquity LLC, as a defendant. 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 two parties reached a settlement agreement in principle on September 26, 2022, which the Company’s board of directors approved on September 27, 2022. The settlement contained a cash component of $75,000 payable to Sabby Entities and $75,000 to Empery Entities.

As part of the settlement, the Company also agreed to issue convertible notes (the “Settlement Notes”) in the aggregate principal amount of $1,656,720 to each of the Empery Entities and the Sabby Entities. The Settlement Notes are convertible into shares (the “Conversion Shares”) of the Company’s common stock at an initial conversion price per share of $0.3068 and can be convertible into a maximum of 5,400,000 shares of the Company’s common stock to each of the Empery Entities and Sabby Entities, subject to the adjustment of the conversion price and a beneficial ownership limitation equivalent to 9.99%. This settlement loss is considered probable and resulted in an expense charged as a separate line item within Other expenses on the condensed consolidated statement of operations and related accrued litigation liability totaling $3,463,000 on the balance sheet. This amount excludes any legal and others costs that were incurred in connection with the defense of this action, and any legal and other costs incurred by the other defendants that we are required to reimburse. Subject to certain exceptions, the Company is obligated to indemnify the defendants in this action, including ThinkEquity, for their reasonable costs incurred in connection with this action and those costs could be substantial. On November 2, 2022, the United States District Court for the Southern District of New York granted a motion jointly filed by the plaintiffs and defendants, pursuant to which the Settlement Notes will be unrestricted and exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the Conversion Shares, when issued upon conversion of the Settlement Notes in accordance with the terms set forth therein, will also be unrestricted and exempt from the registration requirements of the Securities Act. 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.

On August 5, 2022, Ronald H. Karp filed a class action complaint in the United States District Court for the Southern District of New York covering the same subject matter as the Sabby Entities’ and Empery Entities’ claim discussed above asserting claims against the Company and certain current and former officers and directors 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 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in connection with the certain statements and acts made by the defendants between June 25, 2021 and August 13, 2021. The Company has evaluated the Karp class claims and has determined that it is not possible to estimate a potential range of loss at this time.

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 or cash flows.

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT

Schedule of property and equipment


	September 30,		December 31,
	2022		2021
Equipment	$	2,722,800	$	1,593,100
Leasehold improvements		7,193,700		1,464,700
Office furniture, fixtures, and equipment		137,300		16,600
Software		359,500		359,500
Construction in progress		422,200		1,226,600
		10,835,500		4,660,500
Less: Accumulated depreciation		(2,150,000)		(1,031,500)
Total	$	8,685,500	$	3,629,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unrecognized tax benefits, interest or penalties	$ 0	$ 0	$ 0	$ 0

COMMITMENTS AND CONTINGENCIES - Legal proceedings (Details)				9 Months Ended
	Sep. 26, 2022 USD ($) item $ / shares	Jul. 02, 2021 USD ($)	Mar. 22, 2021 $ / shares shares	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)
Legal proceedings
Proceeds from issuance of common stock				$ 40,000,000
Accrued litigation liability					$ 3,463,000
Strategic Alliance Agreement
Legal proceedings
Proceeds from issuance of common stock		$ 40,000,000
Jason Terrell - 2014 Consulting Agreement
Legal proceedings
Number of stock options sought \| shares			500,000
Stock option exercise price \| $ / shares			$ 0.50
Jason Terrell - 2017 Non-employee Director Options Agreement
Legal proceedings
Number of stock options sought \| shares			500,005
Stock option exercise price \| $ / shares			$ 0.17
Sabby Entities
Legal proceedings
Cash settlement payments	$ 75,000
Convertible notes issued in settlement of legal proceedings	$ 1,656,720
Conversion price \| $ / shares	$ 0.3068
Maximum beneficial ownership percentage	9.99%
Sabby Entities \| Maximum
Legal proceedings
Maximum shares to be issued under conversion \| item	5,400,000
Empery Entities
Legal proceedings
Cash settlement payments	$ 75,000
Convertible notes issued in settlement of legal proceedings	$ 1,656,720
Conversion price \| $ / shares	$ 0.3068
Maximum beneficial ownership percentage	9.99%
Empery Entities \| Maximum
Legal proceedings
Maximum shares to be issued under conversion \| item	5,400,000

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 14, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Entity File Number	001-39169
Entity Registrant Name	Kiromic BioPharma, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4762913
Entity Address, Address Line One	7707 Fannin Street
Entity Address, Address Line Two	Suite 140
Entity Address, City or Town	Houston
Entity Address State Or Province	TX
Entity Address, Postal Zip Code	77054
City Area Code	832
Local Phone Number	968-4888
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	KRBP
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,246,718
Entity Central Index Key	0001792581
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Operating expenses:
Research and development	$ 3,784,200	$ 3,486,700	$ 10,590,700	$ 8,030,400
General and administrative	4,611,700	2,655,600	13,602,600	7,040,700
Total operating expenses	8,395,900	6,142,300	24,193,300	15,071,100
Loss from operations	(8,395,900)	(6,142,300)	(24,193,300)	(15,071,100)
Other income (expense)
Gain on loan extinguishment				105,800
Litigation settlement loss contingency	(3,463,000)		(3,463,000)
Other income		18,000		18,000
Interest expense	(1,400)	(500)	(6,900)	(6,300)
Total other income (expense)	(3,464,400)	17,500	(3,469,900)	117,500
Net loss	$ (11,860,300)	$ (6,124,800)	$ (27,663,200)	$ (14,953,600)
Net loss per share, basic	$ (0.75)	$ (0.40)	$ (1.78)	$ (1.50)
Net loss per share, diluted	$ (0.75)	$ (0.40)	$ (1.78)	$ (1.50)
Weighted average common shares outstanding, basic	15,840,454	15,366,075	15,706,079	10,048,170
Weighted average common shares outstanding, diluted	15,840,454	15,366,075	15,706,079	10,048,170

LEASES - Lease information (Details)			2 Months Ended	9 Months Ended
LEASES - Lease information (Details)	May 01, 2022 USD ($) item	Aug. 01, 2021 USD ($)	Dec. 31, 2021 USD ($) item	Sep. 30, 2022
Leases
Lease, Practical Expedients, Package [true false]				true
Additional office space leased	9,352	15,385	3,684
Period of time after notice of cancellation that the lease effectively terminates	90 days	90 days	90 days
Number of lease amendments executed \| item			2
Number of months rent due as a termination payment if lease cancellation option exercised \| item	3
Monthly rent - Years one and two	$ 4,800
Monthly rent - Years three and four	4,896
Monthly rent - Year five	$ 5,000

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

4.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of September 30, 2022 and December 31, 2021:


	September 30,		December 31,
	2022		2021
Equipment	$	2,722,800	$	1,593,100
Leasehold improvements		7,193,700		1,464,700
Office furniture, fixtures, and equipment		137,300		16,600
Software		359,500		359,500
Construction in progress		422,200		1,226,600
		10,835,500		4,660,500
Less: Accumulated depreciation		(2,150,000)		(1,031,500)
Total	$	8,685,500	$	3,629,000

Depreciation expense was $536,600 and $128,800 for the three months ended September 30, 2022 and 2021, respectively, and $1,118,500 and $331,200 for the nine months ended September 30, 2022 and 2021, respectively. Depreciation expense is allocated between research and development and general and administrative operating expenses on the condensed consolidated statements of operations.

NET LOSS PER SHARE OF COMMON STOCK

9 Months Ended

Sep. 30, 2022

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, and restricted stock units 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,
	2022		2021		2022		2021
Net loss	$	(11,860,300)	$	(6,124,800)	$	(27,663,200)	$	(14,953,600)
Less: Initial Public Offering Common Stock discount amortization		(25,200)		(25,200)		(74,800)		(74,800)
Less: Public Offering Common Stock discount amortization		(61,700)		(60,300)		(183,100)		(60,300)
Net loss attributable to common shareholders, basic and diluted	$	(11,947,200)	$	(6,210,300)	$	(27,921,100)	$	(15,088,700)
Weighted average common shares outstanding, basic and diluted		15,840,454		15,366,075		15,706,079		10,048,170
Net loss per common share, basic and diluted	$	(0.75)	$	(0.40)	$	(1.78)	$	(1.50)

For the three months ended September 30, 2022 and 2021, there were 0 and 6,698 restricted stock units that were potentially dilutive securities excluded from the computations of diluted weighted-average shares of common stock. For the nine months ended September 30, 2022 and 2021, there were 0 and 73,366 restricted stock units that were potentially dilutive securities excluded from the computations of diluted weighted-average shares of common stock.

In addition, while not considered potentially dilutive securities under the treasury stock method, there were 595,049 vested and outstanding restricted stock units that had not been released to grantees as of September 30, 2022 which were not included in calculation of weighted average common shares outstanding, basic and diluted. The Company plans to release these shares to the grantees before the end of the year. Since there is a possibility that any portion of those shares could be sold as part of the release, the shares will be released in compliance with the Company’s insider trading policy when there is an open trading window and grantees are not in possession of any material non-public information.

STOCK-BASED COMPENSATION - Stock Option Modifications (Details) - Stock Options		3 Months Ended		9 Months Ended
	Aug. 20, 2020 employee $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares
Stock Incentive Plan 2017
Stock compensation expense
Stock compensation expense		$ 17,000	$ 77,000	$ 84,000	$ 275,800
Cancelled and forfeited \| shares				42,037	64,427
Number of individuals affected by modifications \| employee	4
Granted \| shares					147,038
Weighted average grant date fair value for options granted and expected to be vested during the year: \| $ / shares					$ 8.47
Effect of modifications on stock compensation expense		0		$ 0
Total unrecognized stock compensation expense		20,900		$ 20,900
Weighted-average period over which cost not yet recognized is expected to be recognized				5 months 1 day
Stock Incentive Plan 2017 \| Research and development
Stock compensation expense
Stock compensation expense		9,000	44,500	$ 61,000	$ 86,400
Stock Incentive Plan 2017 \| General and administrative
Stock compensation expense
Stock compensation expense		8,000	32,500	$ 23,000	189,400
Effect of modifications on stock compensation expense			0		34,900
Incremental compensation costs			$ 0		$ 16,000
Stock Incentive Plan 2017 \| Four Nonemployees
Stock compensation expense
Cancelled and forfeited \| shares	15,792
Granted \| shares	21,112
Weighted average grant date fair value for options granted and expected to be vested during the year: \| $ / shares	$ 12.81
Options vested \| shares	3,959
Stock Incentive Plan 2021
Stock compensation expense
Granted \| shares				734,400
Weighted average grant date fair value for options granted and expected to be vested during the year: \| $ / shares				$ 0.36
Total unrecognized stock compensation expense		65,300		$ 65,300
Weighted-average remaining contractual life				9 years 9 months
Weighted-average period over which cost not yet recognized is expected to be recognized				3 months
Stock Incentive Plan 2021 \| General and administrative
Stock compensation expense
Stock compensation expense		$ 66,000		$ 198,600

INCOME TAXES

9 Months Ended

Sep. 30, 2022

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, 2022 and 2021. The Company recorded no income tax provision for the three and nine months ended September 30, 2022 or 2021.

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
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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+ Details

LEASES - Components of lease expense (Details)	3 Months Ended	9 Months Ended
LEASES - Components of lease expense (Details)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)
Operating leases
Operating lease cost	$ 171,600	$ 491,600
Weighted-average remaining lease term	3 years 7 months 2 days	3 years 7 months 2 days
Weighted-average discount rate	7.12%	7.12%
Research and development
Operating leases
Operating lease cost	$ 132,700	$ 346,400
General and administrative
Operating leases
Operating lease cost	$ 38,900	$ 145,200

NOTE PAYABLE

9 Months Ended

Sep. 30, 2022

NOTE PAYABLE

NOTE PAYABLE

7.NOTE PAYABLE

In November 2021, the Company entered into a financing arrangement for 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 September 30, 2022 and December 31, 2021, the remaining payable balance on the financed amount was $0 and $454,500, respectively.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

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.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2021. The results of operations for the period ended September 30, 2022 are not necessarily indicative of the operating results that may be expected for a full year. The condensed consolidated balance sheet as of December 31, 2021 contains financial information taken from the audited Company consolidated financial statements as of that date.

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.

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.

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 and nine months ended September 30, 2022 or 2021.

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.

Stock-Based Compensation—The Company records stock compensation expense related to the 2017 Equity Incentive Plan (the “2017 Plan”) and the 2021 Omnibus Equity Incentive Plan (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.

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 uses 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, 2022 and 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. 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, the Company has adopted Topic 842 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. The Company notes that adopting the new standard resulted in recording a lease liability and right-of-use asset associated with the Company’s facility lease agreement and subsequent amendments thereto totaling $2,232,700, as of January 1, 2022.

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.

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (27,663,200)	$ (14,953,600)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation	1,118,500	331,200
Amortization		2,200
Stock compensation expense	627,500	3,319,100
Gain on loan extinguishment		(105,800)
Operating lease interest expense	273,000
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	16,200	20,200
Prepaid expenses and other current assets	(6,100)	(168,500)
Accounts payable	2,928,100	216,000
Accrued expenses and other current liabilities	(137,000)	182,900
Accrued litigation liability	3,463,000
Operating lease liability	(263,400)
Net cash used for operating activities	(19,643,400)	(11,156,300)
Cash flows from investing activities:
Purchases of property and equipment	(4,823,300)	(797,500)
Cash received from acquisition		84,000
Net cash used for investing activities	(4,823,300)	(713,500)
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
Loan repayments	(454,500)	(362,400)
Net cash provided by financing activities	(454,500)	36,881,100
Net change in cash and cash equivalents	(24,921,200)	25,011,300
Cash and cash equivalents:
Beginning of year	25,353,900	10,150,500
End of period	432,700	35,161,800
Supplemental disclosures of non-cash investing and financing activities:
Accruals for property and equipment	1,351,700	46,500
Cash paid for interest on note payable	6,900	6,300
Common stock issuance for acquisition		400,000
Restricted stock units granted for acquisition		140,000
Acquisitions net of cash acquired		$ 456,000
ASC 842 right-of-use asset/liability implementation	2,232,700
Right-of-use asset/liability acquired through lease liability	$ 204,800

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2022

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, 2022 and December 31, 2021:


	September 30,		December 31,
	2022		2021
Accrued consulting and outside services	$	137,400	$	467,100
Accrued compensation		466,600		273,900
Total	$	604,000	$	741,000

STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

11.STOCK-BASED COMPENSATION

2017 Stock Incentive Plan— Stock Options

There were no stock option grants from the 2017 Plan during the nine months ended September 30, 2022. The Black-Scholes option-pricing model was used to estimate the fair value of stock option grants with the following weighted-average assumptions for the nine months ended September 30, 2021:


	September 30,
	2021
Risk-free interest rate	1.09	%
Expected volatility	83.34	%
Expected life (years)	6.22
Expected dividend yield	0	%

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


	2022			2021
		Weighted			Weighted
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price
Options outstanding at beginning of year	380,909	$	8.57	489,718	$	10.03
Granted	—		—	147,038		8.47
Exercised	—		—	(18,891)		6.64
Cancelled and forfeited	(42,037)		9.19	(64,427)		17.67
Balance at September 30	338,872	$	8.49	553,438	$	8.84
Options exercisable at September 30:	336,108	$	8.53	369,020	$	8.87
Weighted average grant date fair value for options granted during the year:		$	—		$	8.47

The intrinsic value of the options exercised during the nine months ended September 30, 2021 was $33,000. In addition, the weighted average remaining contractual life for the options is 5.28 years and 6.49 years as of September 31, 2022 and 2021, respectively. The options have no intrinsic value as of September 30, 2022 or 2021, respectively.

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, 2022 and 2021 as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	9,000	$	44,500	$	61,000	$	86,400
General and administrative		8,000		32,500		23,000		189,400
Total	$	17,000	$	77,000	$	84,000	$	275,800

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. There were no effects stock option modifications during the three and nine months ended September 30, 2022.

As of September 30, 2022, total unrecognized stock compensation expense is $20,900 related to unvested stock options to be recognized over the remaining weighted-average vesting period of 0.42 years.

2017 Stock Incentive Plan—Restricted Stock Units

The 2017 Plan permits the Company to grant equity awards for 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, 2022 and 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.

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


	2022			2021
		Weighted Average			Weighted Average
		Grant Date			Grant Date
		Fair Value			Fair Value
	Shares	Per Share		Shares	Per Share
Nonvested RSUs at beginning of year, as restated	510,851	$	12.48	946,245	$	12.81
Granted	—		—	166,660		7.98
Vested	(11,980)		9.90	(37,802)		6.51
Cancelled and forfeited	(338,988)		12.75	(136,445)		12.79
Nonvested RSUs at September 30,	159,883	$	12.18	938,658	$	12.28

Subsequent to the issuance of the December 31, 2021 consolidated financial statements, the Company identified an error related to the calculation of the number of vested shares of restricted stock units related to the Company’s 2017 Equity Incentive Plan. The Company used an incorrect number of vested shares of restricted stock units for the year ended December 31, 2021. Accordingly, the Company restated the number of vested shares of restricted stock units for the year ended December 31, 2021 from 37,802 shares to 393,909 shares, and the resulting total non-vested restricted stock units at December 31, 2021 from 866,958 shares to 510,851 shares. Additionally, the weighted average grant date fair value of vested shares for the year ended December 31, 2021 was restated from $6.51 per share to $11.21 per share, and the weighted average grant date fair value for total nonvested restricted stock units as of December 31, 2021 was restated from $12.16 per share to $12.48 per share. This change did not have any impact on our earnings per share calculations, nor did it have any impact on any previous disclosures related to potentially dilutive securities excluded from the computations of diluted weighted-average shares of common stock outstanding. The Company has evaluated the materiality of this error and concluded that it is not material to the December 31, 2021 consolidated financial statements. Further, the Company will also prospectively restate the previously reported financial information for the related error in future and annual filings for the year ending December 31, 2022.

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, 2022 and 2021, as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	17,300	$	99,400	$	31,200	$	2,000,600
General and administrative		21,100		866,900		16,400		939,800
Total	$	38,400	$	966,300	$	47,600	$	2,940,400

On August 20, 2020, the board of directors 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 of directors 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.

There was no effect from RSU modifications during the three and nine months ended September 30, 2022.

2021 Stock Incentive Plan—Restricted Stock Units

The 2021 Plan permits the Company to grant equity awards for up to 1,217,292 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.

In the nine months ended September 30, 2022, 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.

The following table summarizes the activity for all RSUs outstanding at September 30, 2022 and 2021 under the 2021 Plan:


	2022			2021
		Weighted Average			Weighted Average
		Grant Date			Grant Date
		Fair Value			Fair Value
	Shares	Per Share		Shares	Per Share
Nonvested RSUs at beginning of year	62,049	$	5.52	—	$	—
Granted	738,298		0.41	102,613		5.20
Vested	(595,581)		1.28	(37,900)		4.75
Cancelled and forfeited	(7,936)		4.22	—		—
Nonvested RSUs at September 30,	196,830	$	1.44	64,713	$	5.46


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	21,800	$	11,000	$	47,500	$	11,000
General and administrative		220,000		51,000		249,800		91,900
Total	$	241,800	$	62,000	$	297,300	$	102,900

2021 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 three and nine months ended September 30:


	2022
Risk-free interest rate	2.99	%
Expected volatility	119.55	%
Expected life (years)	5.1
Expected dividend yield	0	%

In the nine months ended September 30, 2022, the fair value of the common shares underlying the stock options was determined by the closing stock price listed on the Nasdaq Capital Market on the grant date.

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


	2022
		Weighted
		Average
		Exercise
	Shares	Price
Options outstanding at beginning of year	—	$	—
Granted	734,400		0.43
Exercised	—		—
Cancelled and forfeited	—		—
Balance at September 30	734,400	$	0.43
Options exercisable at September 30:	550,800	$	0.43
Weighted average grant date fair value for options granted during the year:		$	0.36

In addition, the stock options had weighted average remaining contractual life of 9.75 years. The stock options generated stock compensation expense of $66,000 and $198,600 during the three and nine months ended September 30, 2022. All of the stock compensation expense was allocated to general and administrative expense on the condensed consolidated statement of operations.

As of September 30, 2022, total unrecognized stock compensation expense is $65,300, related to unvested stock options to be recognized over the remaining weighted-average vesting period of 0.25 years.

NET LOSS PER SHARE OF COMMON STOCK - Dilutive Securities Excluded From the Computations of Earnings Per Share (Details) - Restricted Stock Units - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Dilutive Securities Excluded From the Computations of Earnings Per Share
Potentially dilutive securities	0	6,698	0	73,366
Units vested and outstanding but not yet released to the grantee.			595,049

Condensed Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
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		(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		(24,900)		(24,900)
Exercised stock options	$ 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 discount amortization		(85,500)		(85,500)
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
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
Balance at beginning of period at Dec. 31, 2021	$ 9,300	94,527,000	(67,216,500)	27,319,800
Balance at beginning of period (in shares) at Dec. 31, 2021	15,488,516
Common stock discount amortization		85,100		85,100
Warrants underlying common stock issuance		(85,100)		(85,100)
Released restricted stock units (in shares)	97,071
Stock compensation expense		80,100		80,100
Net loss			(7,367,800)	(7,367,800)
Balance at end of period at Mar. 31, 2022	$ 9,300	94,607,100	(74,584,300)	20,032,100
Balance at end of period (in shares) at Mar. 31, 2022	15,585,587
Balance at beginning of period at Dec. 31, 2021	$ 9,300	94,527,000	(67,216,500)	27,319,800
Balance at beginning of period (in shares) at Dec. 31, 2021	15,488,516
Net loss				(27,663,200)
Balance at end of period at Sep. 30, 2022	$ 9,300	95,154,500	(94,879,700)	284,100
Balance at end of period (in shares) at Sep. 30, 2022	15,843,191
Balance at beginning of period at Mar. 31, 2022	$ 9,300	94,607,100	(74,584,300)	20,032,100
Balance at beginning of period (in shares) at Mar. 31, 2022	15,585,587
Common stock discount amortization		85,900		85,900
Warrants underlying common stock issuance		(85,900)		(85,900)
Released restricted stock units (in shares)	253,525
Stock compensation expense		184,200		184,200
Net loss			(8,435,100)	(8,435,100)
Balance at end of period at Jun. 30, 2022	$ 9,300	94,791,300	(83,019,400)	11,781,200
Balance at end of period (in shares) at Jun. 30, 2022	15,839,112
Common stock discount amortization		86,900		86,900
Warrants underlying common stock issuance		(86,900)		(86,900)
Released restricted stock units (in shares)	4,079
Stock compensation expense		363,200		363,200
Net loss			(11,860,300)	(11,860,300)
Balance at end of period at Sep. 30, 2022	$ 9,300	$ 95,154,500	$ (94,879,700)	$ 284,100
Balance at end of period (in shares) at Sep. 30, 2022	15,843,191

LOAN PAYABLE (Details) - SBA Loan - USD ($)	Feb. 16, 2021	May 01, 2020
Current loan payable
Principal amount		$ 115,600
Loan forgiveness	$ 105,800