0000749647 false --12-31 Q3 P3Y P4Y 0000749647 2022-01-01 2022-09-30 0000749647 2022-11-09 0000749647 2022-09-30 0000749647 2021-12-31 0000749647 2022-07-01 2022-09-30 0000749647 2021-07-01 2021-09-30 0000749647 2021-01-01 2021-09-30 0000749647 2020-12-31 0000749647 2021-09-30 0000749647 IMNN:SeriesAandBPreferredStockMember us-gaap:PreferredStockMember 2022-06-30 0000749647 us-gaap:CommonStockMember 2022-06-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0000749647 us-gaap:TreasuryStockMember 2022-06-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0000749647 us-gaap:RetainedEarningsMember 2022-06-30 0000749647 2022-06-30 0000749647 IMNN:SeriesAandBPreferredStockMember us-gaap:PreferredStockMember 2021-06-30 0000749647 us-gaap:CommonStockMember 2021-06-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0000749647 us-gaap:TreasuryStockMember 2021-06-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0000749647 us-gaap:RetainedEarningsMember 2021-06-30 0000749647 2021-06-30 0000749647 us-gaap:PreferredStockMember IMNN:SeriesAandBPreferredStockMember 2021-12-31 0000749647 us-gaap:CommonStockMember 2021-12-31 0000749647 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0000749647 us-gaap:TreasuryStockMember 2021-12-31 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0000749647 us-gaap:RetainedEarningsMember 2021-12-31 0000749647 us-gaap:CommonStockMember 2020-12-31 0000749647 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000749647 us-gaap:TreasuryStockMember 2020-12-31 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0000749647 us-gaap:RetainedEarningsMember 2020-12-31 0000749647 IMNN:SeriesAandBPreferredStockMember us-gaap:PreferredStockMember 2022-07-01 2022-09-30 0000749647 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0000749647 us-gaap:TreasuryStockMember 2022-07-01 2022-09-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0000749647 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0000749647 IMNN:SeriesAandBPreferredStockMember us-gaap:PreferredStockMember 2021-07-01 2021-09-30 0000749647 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0000749647 us-gaap:TreasuryStockMember 2021-07-01 2021-09-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-01 2021-09-30 0000749647 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0000749647 us-gaap:PreferredStockMember IMNN:SeriesAandBPreferredStockMember 2022-01-01 2022-09-30 0000749647 us-gaap:CommonStockMember 2022-01-01 2022-09-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-09-30 0000749647 us-gaap:TreasuryStockMember 2022-01-01 2022-09-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-09-30 0000749647 us-gaap:RetainedEarningsMember 2022-01-01 2022-09-30 0000749647 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-09-30 0000749647 us-gaap:TreasuryStockMember 2021-01-01 2021-09-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-09-30 0000749647 us-gaap:RetainedEarningsMember 2021-01-01 2021-09-30 0000749647 IMNN:SeriesAandBPreferredStockMember us-gaap:PreferredStockMember 2022-09-30 0000749647 us-gaap:CommonStockMember 2022-09-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0000749647 us-gaap:TreasuryStockMember 2022-09-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0000749647 us-gaap:RetainedEarningsMember 2022-09-30 0000749647 IMNN:SeriesAandBPreferredStockMember us-gaap:PreferredStockMember 2021-09-30 0000749647 us-gaap:CommonStockMember 2021-09-30 0000749647 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0000749647 us-gaap:TreasuryStockMember 2021-09-30 0000749647 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30 0000749647 us-gaap:RetainedEarningsMember 2021-09-30 0000749647 IMNN:SiliconValleyBankMember 2022-09-30 0000749647 IMNN:SiliconValleyBankMember 2021-12-31 0000749647 us-gaap:USTreasurySecuritiesMember 2022-09-30 0000749647 us-gaap:USTreasurySecuritiesMember 2021-12-31 0000749647 us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0000749647 us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember IMNN:InprocessRandDMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel1Member IMNN:InprocessRandDMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel2Member IMNN:InprocessRandDMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel3Member IMNN:InprocessRandDMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember IMNN:InprocessRandDMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel1Member IMNN:InprocessRandDMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel2Member IMNN:InprocessRandDMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel3Member IMNN:InprocessRandDMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2022-09-30 0000749647 us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-12-31 0000749647 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-12-31 0000749647 IMNN:EGENIncMember IMNN:IPRAndDDrugTechnologyPlatformsMember 2022-01-01 2022-09-30 0000749647 IMNN:IPRAndDDrugTechnologyPlatformsMember IMNN:OvarianCancerMember 2022-01-01 2022-09-30 0000749647 IMNN:IPRAndDDrugTechnologyPlatformsMember 2022-07-01 2022-09-30 0000749647 IMNN:IPRAndDDrugTechnologyPlatformsMember 2022-01-01 2022-09-30 0000749647 IMNN:IPRAndDDrugTechnologyPlatformsMember 2021-07-01 2021-09-30 0000749647 IMNN:IPRAndDDrugTechnologyPlatformsMember 2021-01-01 2021-09-30 0000749647 IMNN:EGENIncMember IMNN:PurchaseAgreementMember 2022-01-01 2022-09-30 0000749647 IMNN:EGENIncMember 2022-09-30 0000749647 IMNN:EGENIncMember IMNN:GlioblastomaMultiformeBrainCancerMember 2021-01-01 2021-12-31 0000749647 IMNN:EGENIncMember IMNN:GlioblastomaMultiformeBrainCancerMember 2021-10-01 2021-12-31 0000749647 IMNN:IPRAndDMember 2021-12-31 0000749647 IMNN:IPRAndDMember 2022-01-01 2022-09-30 0000749647 IMNN:IPRAndDMember 2022-09-30 0000749647 IMNN:SiliconValleyBankMember 2021-06-18 0000749647 IMNN:SiliconValleyBankMember 2021-06-17 2021-06-18 0000749647 IMNN:SiliconValleyBankMember 2022-07-01 2022-09-30 0000749647 IMNN:SiliconValleyBankMember 2022-01-01 2022-09-30 0000749647 IMNN:SiliconValleyBankMember 2021-07-01 2021-09-30 0000749647 IMNN:SiliconValleyBankMember 2021-01-01 2021-09-30 0000749647 IMNN:HorizonCreditAgreementMember 2018-06-27 0000749647 IMNN:HorizonCreditAgreementMember 2018-06-26 2018-06-27 0000749647 IMNN:HorizonCreditAgreementMember 2020-08-26 2020-08-28 0000749647 IMNN:HorizonCreditAgreementMember us-gaap:CommonStockMember 2021-06-18 0000749647 IMNN:HorizonCreditAgreementMember IMNN:HorizonTechnologyFinanceCorporationMember us-gaap:CommonStockMember 2021-06-18 0000749647 IMNN:HorizonCreditAgreementMember 2021-06-17 2021-06-18 0000749647 IMNN:HorizonCreditAgreementMember IMNN:HorizonTechnologyFinanceCorporationMember 2021-06-18 0000749647 IMNN:HorizonCreditAgreementMember 2021-07-01 2021-09-30 0000749647 IMNN:HorizonCreditAgreementMember 2021-01-01 2021-09-30 0000749647 IMNN:HorizonTechnologyFinanceCorporationMember 2021-06-18 0000749647 2021-03-18 2021-03-19 0000749647 srt:MaximumMember 2022-09-30 0000749647 srt:MinimumMember 2022-09-30 0000749647 IMNN:MarketOfferingAgreementMember 2022-05-23 2022-05-25 0000749647 IMNN:MarketOfferingAgreementMember us-gaap:SubsequentEventMember 2022-10-01 2022-11-07 0000749647 IMNN:CapitalOnDemandTMSalesAgreementMember 2018-12-02 2018-12-04 0000749647 IMNN:CapitalOnDemandAgreementMember 2021-01-01 2021-09-30 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:JanuaryRegisteredDirectOfferingMember 2021-01-21 2021-01-22 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:JanuaryRegisteredDirectOfferingMember 2021-01-22 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:JanuaryRegisteredDirectOfferingMember 2021-01-01 2021-01-31 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:MarchRegisteredDirectOfferingMember 2021-03-30 2021-03-31 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:MarchRegisteredDirectOfferingMember 2021-03-31 0000749647 IMNN:SeriesAConvertibleRedeemablePreferredStockMember 2022-01-10 0000749647 IMNN:SeriesBConvertibleRedeemablePreferredStockMember 2022-01-10 0000749647 2022-01-10 0000749647 2022-01-09 2022-01-10 0000749647 IMNN:SeriesAConvertibleRedeemablePreferredStockMember 2022-01-09 2022-01-10 0000749647 IMNN:SeriesBConvertibleRedeemablePreferredStockMember 2022-01-09 2022-01-10 0000749647 srt:MaximumMember 2022-01-01 2022-09-30 0000749647 2022-03-03 0000749647 IMNN:SeriesAConvertibleRedeemablePreferredStockMember 2022-03-03 0000749647 IMNN:SeriesBConvertibleRedeemablePreferredStockMember 2022-03-03 0000749647 IMNN:SeriesABPreferredStockMember 2022-01-01 2022-03-31 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:AprilRegisteredDirectOfferingMember 2022-04-05 2022-04-06 0000749647 IMNN:SecuritiesPurchaseAgreementMember IMNN:AprilRegisteredDirectOfferingMember 2022-04-06 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember 2018-05-15 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember srt:MinimumMember 2019-05-14 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember srt:MaximumMember 2019-05-14 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember srt:MinimumMember 2020-06-15 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember srt:MaximumMember 2020-06-15 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember srt:MinimumMember 2021-06-10 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember srt:MaximumMember 2021-06-10 0000749647 IMNN:TwoThousandSevenStockIncentivePlanMember 2022-01-01 2022-09-30 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:CommonStockMember 2018-09-27 2018-09-28 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:CommonStockMember 2019-02-18 2019-02-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:CommonStockMember 2022-07-18 2022-07-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:CommonStockMember 2022-09-26 2022-09-27 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:RestrictedStockMember 2018-09-27 2018-09-28 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:RestrictedStockMember 2019-02-18 2019-02-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:RestrictedStockMember 2022-07-18 2022-07-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember us-gaap:RestrictedStockMember 2022-09-26 2022-09-27 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember 2018-09-27 2018-09-28 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember 2019-02-18 2019-02-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember 2022-07-18 2022-07-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember 2022-09-26 2022-09-27 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember srt:MinimumMember 2019-02-18 2019-02-19 0000749647 IMNN:InducementOptionGrantsMember IMNN:EightNewEmployeesMember srt:MaximumMember 2019-02-18 2019-02-19 0000749647 IMNN:InducementAwardsMember 2022-09-30 0000749647 IMNN:TwoThousandAndEighteenStockIncentivePlanMember 2022-09-30 0000749647 IMNN:EquityStockAwardsMember IMNN:GrantedUnderTwoThousandEighteenPlanAndTwoThousandSevenPlanMember 2022-09-30 0000749647 IMNN:TwoThousandAndEighteenPlanMember 2022-09-30 0000749647 IMNN:TwoThousandSevenPlanMember 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember 2022-07-01 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember 2021-07-01 2021-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:ResearchAndDevelopmentExpenseMember 2022-07-01 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:ResearchAndDevelopmentExpenseMember 2021-07-01 2021-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:GeneralAndAdministrativeExpenseMember 2022-07-01 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:GeneralAndAdministrativeExpenseMember 2021-07-01 2021-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember 2022-01-01 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember 2021-01-01 2021-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:ResearchAndDevelopmentExpenseMember 2022-01-01 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:GeneralAndAdministrativeExpenseMember 2022-01-01 2022-09-30 0000749647 IMNN:EmployeeStockOptionAndRestrictedStockAwardsMember us-gaap:GeneralAndAdministrativeExpenseMember 2021-01-01 2021-09-30 0000749647 us-gaap:EmployeeStockOptionMember 2021-12-31 0000749647 us-gaap:RestrictedStockMember 2021-12-31 0000749647 us-gaap:EmployeeStockOptionMember 2022-01-01 2022-09-30 0000749647 us-gaap:RestrictedStockMember 2022-01-01 2022-09-30 0000749647 us-gaap:EmployeeStockOptionMember 2022-09-30 0000749647 us-gaap:RestrictedStockMember 2022-09-30 0000749647 srt:MinimumMember 2022-01-01 2022-09-30 0000749647 srt:MinimumMember 2021-01-01 2021-09-30 0000749647 srt:MaximumMember 2021-01-01 2021-09-30 0000749647 IMNN:AmendedAssetPurchaseAgreementMember 2019-03-28 0000749647 IMNN:AmendedAssetPurchaseAgreementMember IMNN:CertainBusinessDaysOfAchievingMilestoneMember 2019-03-28 0000749647 IMNN:EGWCMember IMNN:FairValueEarnoutMilestoneLiabilityMember 2022-01-01 2022-09-30 0000749647 IMNN:EGWCMember IMNN:FairValueEarnoutMilestoneLiabilityMember 2021-01-01 2021-12-31 0000749647 2011-01-01 2011-12-31 0000749647 2011-12-31 0000749647 IMNN:FirstLeaseAmendmentMember IMNN:FirstYearMember 2022-01-01 2022-09-30 0000749647 IMNN:FirstLeaseAmendmentMember IMNN:FinalYearMember 2022-01-01 2022-09-30 0000749647 IMNN:FirstLeaseAmendmentMember 2021-01-08 2021-01-09 0000749647 IMNN:SecondLeaseAmendmentMember IMNN:FirstYearMember 2022-01-01 2022-09-30 0000749647 IMNN:SecondLeaseAmendmentMember IMNN:FinalYearMember 2022-01-01 2022-09-30 0000749647 IMNN:EGENAssetPurchaseAgreementMember 2022-01-01 2022-09-30 0000749647 IMNN:EGENAssetPurchaseAgreementMember 2022-09-30 0000749647 IMNN:EGENAssetPurchaseAgreementMember 2018-01-31 0000749647 IMNN:EGENAssetPurchaseAgreementMember 2018-01-01 2018-01-31 0000749647 IMNN:HuntsvilleAlabamaMember 2021-06-09 0000749647 IMNN:EGENAssetPurchaseAgreementMember 2021-06-08 2021-06-09 0000749647 IMNN:OperatingLeasesMember 2022-07-01 2022-09-30 0000749647 IMNN:OperatingLeasesMember 2022-01-01 2022-09-30 0000749647 IMNN:OperatingLeasesMember 2021-07-01 2021-09-30 0000749647 IMNN:OperatingLeasesMember 2021-01-01 2021-09-30 0000749647 IMNN:HisunMember 2013-01-17 2013-01-18 0000749647 IMNN:HisunMember 2013-01-18 iso4217:USD xbrli:shares iso4217:USD xbrli:shares utr:sqft xbrli:pure

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2022

 

OR

 

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

 

For the transition period from ____________ to ____________

 

Commission file number: 001-15911

 

Imunon, Inc.

(Exact name of Registrant as specified in its charter)

 

Delaware   52-1256615

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

997 Lenox Drive, Suite 100,

Lawrenceville, NJ 08648

(Address of principal executive offices)

 

(609) 896-9100

(Registrant’s telephone number, including area code)

 

Celsion Corporation

(Former name, former address and former fiscal year, if changed since last report)

 

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

 

Title of each class   Trading symbol(s)   Name of each exchange on which registered
Common stock, par value $0.01 per share   IMNN   Nasdaq Capital Market

 

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

 

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

 

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

 

  Large accelerated filer ☐ Accelerated filer ☐
  Non-accelerated filer Smaller reporting company
  Emerging growth company  

 

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

 

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

 

As of November 9, 2022, the Registrant had 7,434,309 shares of common stock, $0.01 par value per share, outstanding.

 

 

 

 

 

 

IMUNON, INC.

 

QUARTERLY REPORT ON

FORM 10-Q

 

TABLE OF CONTENTS

 

    Page(s)
PART I: FINANCIAL INFORMATION  
     
Item 1. Financial Statements and Notes 1
  Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021 1
 

Condensed Consolidated Statements of Operations (Unaudited) for the Three Months and Nine Months Ended September 30, 2022 and 2021

3
 

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three Months and Nine Months Ended September 30, 2022 and 2021

4
 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2022 and 2021

5
 

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three Months Ended September 30, 2022 and 2021

7
 

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Nine Months Ended September 30, 2022 and 2021

8
  Notes to the Condensed Consolidated Financial Statements (Unaudited) 9
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 38
     
Item 4. Controls and Procedures 38
     
PART II: OTHER INFORMATION  
     
Item 1. Legal Proceedings 39
     
Item 1A. Risk Factors 39
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39
     
Item 3. Defaults Upon Senior Securities 39
     
Item 4. Mine Safety Disclosures 39
     
Item 5. Other Information 39
     
Item 6. Exhibits 40
     
SIGNATURES 41

 

i

 

 

Cautionary Note Regarding Forward-Looking Statements

 

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of this Quarterly Report on Form 10-Q, including, without limitation, any projections of earnings, revenue or other financial items, any statements of the plans and objectives of management for future operations (including, but not limited to, pre-clinical development, clinical trials, manufacturing and commercialization), uncertainties and assumptions regarding the impact of the COVID-19 pandemic on our business, operations, clinical trials, supply chain, strategy, goals and anticipated timelines, any statements concerning proposed drug candidates, potential therapeutic benefits, or other new products or services, any statements regarding future economic conditions or performance, any changes in the course of research and development activities and in clinical trials, any possible changes in cost and timing of development and testing, capital structure, financial condition, working capital needs and other financial items, and any statements of assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified using terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential” or “continue,” or the negative thereof or other comparable terminology. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business, and operations, we cannot guarantee that actual results will not differ materially from our expectations.

 

Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, including, but not limited to, the inherent uncertainty in the drug development process, our ability to raise additional capital to fund our planned future operations, our ability to obtain or maintain FDA and foreign regulatory approvals for our drug candidates, potential impact of the outbreak, duration and severity of the COVID-19 pandemic on our business, our ability to enroll patients in our clinical trials, risks relating to third parties conduct of our clinical trials, risks relating to government, private health insurers and other third-party payers coverage or reimbursement, risks relating to commercial potential of a drug candidate in development, changes in technologies for the treatment of cancer, impact of development of competitive drug candidates by others, risks relating to intellectual property, volatility in the market price of our common stock, potential inability to maintain compliance with The Nasdaq Marketplace Rules and the impact of adverse capital and credit market conditions. These and other risks, assumptions are described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and in other documents that we file or furnish with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. All forward-looking statements speak only as of the date they are made, and we do not intend to update any forward-looking statements, except as required by law or applicable regulations. We operate in a highly competitive, highly regulated, and rapidly changing environment and our business is in a state of evolution. Therefore, it is likely that new risks will emerge, and that the nature and elements of existing risks will change, over time. It is not possible for management to predict all such risk factors or changes therein, or to assess either the impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors, or new or altered factors, may cause results to differ materially from those contained in any forward-looking statement.

 

Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, the “Company,” “Imunon,” “we,” “us,” and “our” refer to Imunon, Inc., a Delaware corporation and its wholly owned subsidiaries.

 

Trademarks

 

The Company’s brand and product names contained in this document are trademarks, registered trademarks, or service marks of Imunon, Inc. or its subsidiary in the United States (“U.S.”) and certain other countries. This document also contains references to trademarks and service marks of other companies that are the property of their respective owners.

 

ii

 

 

PART I: FINANCIAL INFORMATION

 

Item 1. FINANCIAL STATEMENTS

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

BALANCE SHEETS

 

           
  

September 30,

2022

  

December 31,

2021

 
   (Unaudited)      
ASSETS          
Current assets:          
Cash and cash equivalents  $26,938,090   $19,586,272 
Investment in debt securities - available for sale, at fair value   10,414,395    29,803,095 
Accrued interest receivable on investment securities   30,495    108,844 
Advances and deposits on clinical programs and other current assets   2,810,787    2,447,413 
Total current assets   40,193,767    51,945,624 
           

Property and equipment (at cost, less accumulated depreciation and amortization)

   582,531    477,011 
           
Other assets:          
Money market investments, restricted cash   6,000,000    6,000,000 
Deferred income tax asset   -    1,383,446 
In-process research and development, net   13,366,234    13,366,234 
Operating lease right-of-use assets, net   294,814    690,995 
Deposits and other assets   93,761    183,489 
Total other assets   19,754,809    21,624,164 
           
Total assets  $60,531,107   $74,046,799 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

1

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

BALANCE SHEETS

(Continued)

 

  

September 30,

2022

  

December 31,

2021

 
   (Unaudited)     
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable – trade  $3,369,913   $2,547,251 
Other accrued liabilities   3,925,561    3,173,537 
Operating lease liability - current portion   373,525    548,870 
Note payable – current portion, net of deferred financing costs   670,513    - 
Deferred revenue - current portion   125,000    500,000 
Total current liabilities   8,464,512    6,769,658 
           
Earn-out milestone liability   5,396,000    5,396,000 
Notes payable – non-current portion, net of deferred financing costs   5,319,520    5,854,461 
Operating lease liability - non-current portion   -    230,749 
Total liabilities   19,180,032    18,250,868 
           
Commitments and contingencies   -     
           
Stockholders’ equity:          
           
Preferred stock - $0.01 par value (100,000 shares authorized, and no shares issued or outstanding at September 30, 2022 and December 31, 2021)   -     
           
Common stock - $0.01 par value (112,500,000 shares authorized; 7,098,763 and 5,770,538 shares issued at September 30, 2022 and December 31, 2021, respectively; and 7,098,741 and 5,770,516 shares outstanding at September 30, 2022 and December 31, 2021, respectively)   70,988    57,705 
Additional paid-in capital   396,825,849    388,600,979 
Accumulated other comprehensive loss   (25,424)   (7,974)
Accumulated deficit   (355,435,150)   (332,769,591)
Total stockholders’ equity before treasury stock   41,436,263    55,881,119 
           
Treasury stock, at cost (22 shares at September 30, 2022 and December 31, 2021)   (85,188)   (85,188)
Total stockholders’ equity   41,351,075    55,795,931 
           
Total liabilities and stockholders’ equity  $60,531,107   $74,046,799 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

2

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

(Unaudited)

 

                     
  

For the Three Months Ended

September 30,

  

For the Nine Months Ended

September 30,

 
   2022   2021   2022   2021 
                 
Licensing revenue  $125,000   $125,000   $375,000   $375,000 
                     
Operating expenses:                    
Research and development   2,408,680    2,468,066    8,730,395    7,633,051 
General and administrative   3,890,886    2,718,510    9,639,419    8,258,271 
Total operating expenses   6,299,566    5,186,576    18,369,814    15,891,322 
                     
Loss from operations   (6,174,566)   (5,061,576)   (17,994,814)   (15,516,322)
                     
Other (expense) income:                    
Loss from change in valuation of earn-out milestone liability   -    (257,000)   -    (327,000)
Investment income   153,301    3,552    205,760    5,614 
Interest expense   (127,025)   (95,520)   (4,878,306)   (474,361)
Recognized loss on extinguishment of debt   -    -    -    (234,419)
Other income (expense)   -    -    1,801    (1,456)
Total other income (expense), net   26,276    (348,968)   (4,670,745)   (1,031,622)
                     
Net loss  $(6,148,290)  $(5,410,544)  $(22,665,559)  $(16,547,944)
                     
Net loss per common share                    
Basic and diluted  $(0.87)  $(0.94)  $(3.42)  $(3.12)
                     
Weighted average shares outstanding                    
Basic and diluted   7,098,741    5,770,516    6,621,925    5,311,174 

 

See accompanying notes unaudited to the condensed consolidated financial statements.

 

3

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

 

                     
  

For the Three Months Ended

September 30,

  

For the Nine Months Ended

September 30,

 
   2022   2021   2022   2021 
Other comprehensive loss                    
                     
Changes in:                    
Realized gains on debt securities recognized in investment income, net  $10,369   $2,736   $34,303   $4,521 
Unrealized gains (losses) on debt securities, net   34,241    3,173    (51,753)   (2,382)
                     
Change in realized and unrealized gains (losses) on available for sale securities, net   44,610    5,909    (17,450)   2,139 
                     
Net loss   (6,148,290)   (5,410,544)   (22,665,559)   (16,547,944)
                     
Total Comprehensive loss  $(6,103,680)  $(5,404,635)  $(22,683,009)  $(16,545,805)

 

See accompanying notes unaudited to the condensed consolidated financial statements.

 

4

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

(Unaudited)

 

           
  

For the Nine Months Ended

September 30,

 
   2022   2021 
Cash flows from operating activities:          
           
Net loss  $(22,665,559)  $(16,547,944)
           
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   513,552    542,740 
Change in fair value of earn-out milestone liability   -    327,000 
Recognition of deferred revenue   (375,000)   (375,000)
Stock-based compensation   1,962,807    3,073,569 
Realization of deferred income tax asset   1,383,446    1,845,823 
Amortization of deferred finance charges and debt discount associated with notes payable   135,572    191,571 
Net changes in:          
Accrued interest on investment securities   78,349    (38,404)
Advances, deposits, and other current assets   (273,646)   (552,567)
Accounts payable and accrued liabilities   1,168,592    397,701 
Net cash used in operating activities   (18,071,887)   (11,135,511)
           
Cash flows from investing activities:          
Purchases of investment securities   (8,403,750)   (40,862,225)
Proceeds from sale and maturity of investment securities   27,775,000    12,000,000 
Purchases of property and equipment   (222,891)   (285,971)
Net cash provided by (used in) investing activities   19,148,359    (29,148,196)
           
Cash flows from financing activities:          
Proceeds from redeemable convertible preferred stock offering   28,500,000    - 
Payment upon redemption of redeemable convertible preferred stock   (28,500,000)   - 
Proceeds from sale of common stock equity, net of issuance costs   6,275,346    52,688,945 
Proceeds from exercise of common stock warrants   -    1,508,666 
Proceeds from exercise of options to purchase common stock   -    4,725 
Proceeds from the SVB Loan Facility, net of issuance costs   -    5,756,630 
Payoff of the Horizon Credit Agreement and accrued end of term fees   -    (5,190,587)
Net cash provided by financing activities   6,275,346    54,768,379 
           
Net change in cash, cash equivalents and restricted cash   7,351,818    14,484,672 
Cash, cash equivalents and restricted cash at beginning of period   25,586,272    17,164,177 
Cash, cash equivalents and restricted cash at end of period  $32,938,090   $31,648,849 

 

See accompanying notes unaudited to the condensed consolidated financial statements.

 

5

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (continued)

(Unaudited)

 

           
   For the Nine Months Ended
September 30,
 
   2022   2021 
         
Supplemental disclosures of cash flow information:          
Interest paid  $(4,742,734)  $(307,985)
           
Cash paid for amounts included in measurement of lease liabilities:          
Operating cash flows for lease payments  $450,721   $418,696 
           
Realized and unrealized (losses) gains, net, on investment securities  $(17,450)  $2,139 

 

See accompanying notes unaudited to the condensed consolidated financial statements.

 

6

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

 

                                         
  

Common Stock

Outstanding

  

Additional

Paid-in

   Treasury Stock   Accumulated Other Comprehensive   Accumulated   Total Stockholders’ 
   Shares   Amount   Capital   Shares   Amount   (Loss)/Income   Deficit   Equity 
                                 
Balance at July 1, 2022 -  7,098,741   $70,988   $396,413,587    22   $(85,188)  $(70,034)  $(349,286,860)  $47,042,493 
Net loss -  -    -    -    -    -    -    (6,148,290)   (6,148,290)
Fees incurred from registered direct offering   -    -    (64,023)   -    -    -    -    (64,023)
Realized and unrealized gains (losses), net, on investments securities   -    -    -    -    -    44,610    -    44,610 
Stock-based compensation expense   -    -    476,285    -    -    -    -    476,285 
Balance at September 30, 2022-   7,098,741   $70,988   $396,825,849    22   $(85,188)  $(25,424)  $(355,435,150)  $41,351,075 

 

  

Common Stock

Outstanding

  

Additional

Paid-in

   Treasury Stock   Accumulated Other Comprehensive   Accumulated   Total Stockholders’ 
   Shares   Amount   Capital   Shares   Amount   (Loss)/Income   Deficit   Equity 
                                 
Balance at July 1, 2021 -  5,770,516   $57,705   $387,222,506    22   $(85,188)  $(3,770)  $(323,137,741)  $64,053,512 
Net loss -  -    -    -    -    -    -    (5,410,544)   (5,410,544)
Fees incurred from registered direct offering   -    -    (8,320)   -    -    -    -    (8,320)
Realized and unrealized gains (losses), net, on investments securities   -    -    -    -    -    5,909    -    5,909 
Stock-based compensation expense   -    -    700,624    -    -    -    -    700,624 
Balance at September 30, 2021-   5,770,516   $57,705   $387,914,810    22   $(85,188)  $2,139   $(328,548,285)  $59,341,181 

 

See accompanying notes unaudited to the condensed consolidated financial statements.

 

7

 

 

IMUNON, INC.

 

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

 

                                                      
  

Series

A & B

Preferred

   

Common Stock

Outstanding

  

Additional

Paid-in

  

Treasury

Stock

   Accumulated Other Comprehensive   Accumulated  

Total

Stockholders’

 
   Shares     

Amount

    Shares   Amount   Capital   Shares   Amount   Loss   Deficit   Equity 
                                             
Balance at January 1, 2022   -    $ -      5,770,516   $57,705   $388,600,979    22   $(85,188)  $(7,974)  $(332,769,591)  $55,795,931 
Net loss   -            -    -    -    -    -    -    (22,665,559)   (22,665,559)
Effect of reverse stock split   -     -       (49)   -    -    -    -    -    -    - 
Issuance of preferred stock upon financing   100,000     28,500,000      -    -    -    -    -    -    -    - 
Redemption of preferred stock   (100,000)     (28,500,000 )    -    -    -    -    -    -    -    - 
Sale of equity through equity financing facilities, net of costs   -      -      1,328,274    13,283    6,262,063    -    -    -    -    6,275,346 
Realized and unrealized gains (losses), net, on investments securities   -      -      -    -    -    -    -    (17,450)   -    (17,450)
Stock-based compensation expense   -      -      -    -    1,962,807    -    -    -    -    1,962,807 
Balance at September 30, 2022   -    $ -      7,098,741   $70,988   $396,825,849    22   $(85,188)  $(25,424)  $(355,435,150)  $41,351,075 

 

                                         
  

Common Stock

Outstanding

  

Additional

Paid-in

   Treasury Stock   Accumulated Other Comprehensive   Accumulated   Total Stockholders’ 
   Shares   Amount   Capital   Shares   Amount   Income   Deficit   Equity 
                                 
Balance at January 1, 2021   2,713,402   $27,134   $330,669,476    22   $(85,188)  $-   $(312,000,341)  $18,611,081 
Net loss   -    -    -    -    -    -    (16,547,944)   (16,547,944)
Sale of equity through equity financing facilities, net of costs   2,975,503    29,755    52,659,190    -    -    -    -    52,688,945 
Shares issued upon exercise of common stock warrants, net of fees   81,111    811    1,507,855    -    -    -    -    1,508,666 
Shares issued upon exercise of options to purchase common stock   500    5    4,720    -    -    -    -    4,725 
Realized and unrealized gains (losses), net, on investments securities   -    -    -    -    -    2,139    -    2,139 
Stock-based compensation expense   -    -    3,073,569    -    -    -    -    3,073,569 
Balance at September 30, 2021   5,770,516   $57,705   $387,914,810    22   $(85,188)  $2,139   $(328,548,285)  $59,341,181 

 

See accompanying notes unaudited to the condensed consolidated financial statements.

 

8

 

 

IMUNON, INC.

 

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(UNAUDITED)

 

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

 

Note 1. Business Description

 

On September 19, 2022, Celsion Corporation announced a corporate name change to Imunon, Inc., reflecting the evolution of the Company’s business focus and its commitment to developing cutting-edge immunotherapies and next-generation vaccines to treat cancer and infectious diseases. The Company’s common stock will continue to trade on the Nasdaq Stock Market under the new ticker symbol “IMNN” effective as of the opening of trading on September 21, 2022. The Company filed an amendment to its Articles of Incorporation to effect the new corporate name.

 

Imunon, Inc. (“Imunon” and the “Company”) is a fully integrated, clinical stage biotechnology company focused on advancing a portfolio of innovative treatments that harness the body’s natural mechanisms to generate safe, effective, and durable responses across a broad array of human diseases, constituting a differentiating approach from conventional therapies. Imunon has two platform technologies: Our TheraPlas® platform for the development of immunotherapies and other anti-cancer nucleic acid-based therapies, and our PLACCINE platform for the development of nucleic acid vaccines for infectious diseases and cancer. The Company’s lead clinical program, GEN-1, is a DNA-based immunotherapy for the localized treatment of advanced ovarian cancer currently in Phase II development. GEN-1 works by instructing the body to produce safe and durable levels of powerful cancer fighting molecules, such as interleukin-12 and interferon gamma, at the tumor site. Additionally, the Company is conducting preclinical proof-of-concept studies on a nucleic acid vaccine candidate targeting SARS-CoV-2 virus in order to validate its PLACCINE platform. Imunon’s platform technologies are based on the delivery of nucleic acids with novel synthetic delivery systems that are independent of viral vectors or devices. We will continue to leverage these platforms and to advance the technological frontier of plasmid DNA to better serve patients with difficult to treat conditions.

 

Note 2. Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. During the quarter, there have been no changes to the Company’s accounting policies. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

 

In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for a fair presentation, have been included in the accompanying unaudited condensed consolidated financial statements. Operating results for the three-month and nine-month periods ended September 30, 2022 and 2021 are not necessarily indicative of the results that may be expected for any other interim period(s) or for any full year. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022.

 

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the amount reported in the Company’s financial statements and accompanying notes. Actual results could differ materially from those estimates. Events and conditions arising subsequent to the most recent balance sheet date have been evaluated for their possible impact on the financial statements and accompanying notes. The Company continues to monitor the impact of the COVID-19 pandemic on its financial condition and results of operations, along with the valuation of its long-term assets and intangible assets. The effect of this matter could potentially have an impact on the valuation of such assets in the future.

 

Acquired in-process research and development (“IPR&D”) in years prior to 2022 has been reviewed for impairment at least annually in the third quarter of each year, and whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. Starting in 2022, the Company will review its IPR&D annually in the fourth quarter of each year, and whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable (see Note 8).

 

9

 

 

The Company has $37.4 million in cash and cash equivalents, short-term investments, and interest receivable to fund its operations. The Company also has $6.0 million in restricted cash to fund its financing activity. This is coupled with approximately $3.5 million of future planned sales of the Company’s State of New Jersey net operating losses. The Company believes it has sufficient capital resources to fund its operations into 2025.

 

Note 3. New Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued accounting pronouncements will not have a material impact on the Company’s condensed consolidated financial position, results of operations, and cash flows, or do not apply to our operations.

 

In May 2021, the FASB issued ASU No. 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force)”. This ASU is intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The guidance clarifies whether an issuer should account for a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as: (1) an adjustment to equity and, if so, the related earnings per share effects, if any, or (2) an expense and, if so, the manner and pattern of recognition. The amendments in this ASU affect all entities that issue freestanding written call options that are classified in equity. The amendments do not apply to modifications or exchanges of financial instruments that are within the scope of another Topic and do not affect a holder’s accounting for freestanding call options. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted for all entities, including adoption in an interim period. The Company adopted this standard during the first quarter of 2022. The adoption of ASU 2021-04 did not have an impact on the Company’s consolidated financial statements since the Company has not modified its freestanding call options.

 

Note 4. Restricted Cash

 

As a condition of the SVB Loan Facility entered into on June 18, 2021 as further discussed in Note 10, the Company is required at all times to maintain on deposit with SVB as cash collateral in a segregated money market bank account in the name of the Company, unrestricted and unencumbered cash (other than a lien in favor of SVB) in an amount of at least 100% of the aggregate outstanding amount of the SVB loan facility. SVB may restrict withdrawals or transfers by or on behalf of the Company that would violate this requirement. The required reserve totaled $6.0 million as of September 30, 2022 and December 31, 2021. This amount is presented in part as restricted cash in other non-current assets on the accompanying condensed consolidated balance sheets.

 

The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the condensed statements of cash flows:

   September 30, 2022   September 30, 2021 
Cash and cash equivalents  $26,938,090   $25,648,849 
Money market investments, restricted   6,000,000    6,000,000 
Total  $32,938,090   $31,648,849 

 

Note 5. Net Loss per Common Share

 

Basic loss per share is calculated based upon the net loss available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated after adjusting the denominator of the basic earnings per share computation for the effects of all dilutive potential common shares outstanding during the period. The dilutive effects of preferred stock, options and warrants and their equivalents are computed using the treasury stock method.

 

The total number of shares of common stock issuable upon exercise of warrants, stock option grants and equity awards were 1,346,472 and 616,690 shares for the periods ended September 30, 2022 and 2021, respectively. For the three-month and nine-month periods ended September 30, 2022 and 2021, diluted loss per common share was the same as basic loss per common share as the other warrants and equity awards that were convertible into shares of the Company’s common stock were excluded from the calculation of diluted loss per common share as their effect would have been anti-dilutive. The Company did not pay any dividends during the first nine months of 2022 or 2021.

 

10

 

 

Note 6. Investment in Debt Securities-Available for Sale

 

Investments in debt securities available for sale with a fair value of $10,414,395 and $29,803,095 as of September 30, 2022 and December 31, 2021, respectively, which consisted of U.S. Treasury securities and corporate debt securities. These investments are valued at estimated fair value, with unrealized gains and losses reported as a separate component of stockholders’ equity in accumulated other comprehensive loss.

 

Investments in debt securities available for sale are evaluated periodically to determine whether a decline in their value is other than temporary. The term “other than temporary” is not intended to indicate a permanent decline in value. Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. Management reviews criteria such as the magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding charge to earnings is recognized. A summary of the cost, fair value and maturities of the Company’s short-term investments is as follows:

 

   September 30, 2022   December 31, 2021 
   Cost   Fair Value   Cost   Fair Value 
Short-term investments                    
U.S. Treasury securities  $-   $-   $14,786,982   $14,778,705 
Corporate debt securities   10,439,820    10,414,395    15,024,087    15,024,390 
Total  $10,439,820   $10,414,395   $29,811,069   $29,803,095 

 

   September 30, 2022   December 31, 2021 
   Cost   Fair Value   Cost   Fair Value 
Short-term investment maturities                    
Within 3 months  $5,995,105   $5,985,140   $19,798,177   $19,799,835 
Between 3-12 months   4,444,715    4,429,255    10,012,892    10,003,260 
Total  $10,439,820   $10,414,395   $29,811,069   $29,803,095 

 

The following table shows the Company’s investment in debt securities available for sale gross unrealized gains (losses) and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2022 and December 31, 2021. The Company has reviewed individual securities to determine whether a decline in fair value below the amortizable cost basis is other than temporary.

  

   September 30, 2022   December 31, 2021 
Available for sale securities (all unrealized holding gains and losses are less than 12 months at date of measurement)  Fair Value  

Unrealized Holding

Gains (Losses)

   Fair Value  

Unrealized Holding

Gains (Losses)

 
                 
Investments in debt securities with unrealized gains  $3,991,260   $1,310   $8,999,580   $3,499 
Investments in debt securities with unrealized losses   6,423,135    (26,734)   20,803,515    (11,473)
Total  $10,414,395   $(25,424)  $29,803,095   $(7,974)

 

Investment (loss) income, which includes net realized losses on sales of available for sale securities and investment income interest and dividends, is summarized as follows:

   

   2022   2021 
  

For the Three Months Ended

September 30,

 
   2022   2021 
Interest and dividends accrued and paid  $163,670   $6,288 
Realized losses   (10,369)   (2,736)
Investment income, net  $153,301   $3,552 

 

11

 

 

   2022   2021 
  

For the Nine Months Ended

September 30,

 
   2022   2021 
Interest and dividends accrued and paid  $240,063   $10,135 
Realized losses   (34,303)   (4,521)
Investment income, net  $205,760   $5,614 

 

Note 7. Fair Value Measurements

 

FASB ASC Section 820, Fair Value Measurements and Disclosures establishes a three-level hierarchy for fair value measurements which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

 

Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date;

 

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

 

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions that market participants would use in pricing an asset or liability.

 

Cash and cash equivalents, other current assets, accounts payable and other accrued liabilities are reflected in the condensed consolidated balance sheets at their approximate estimated fair values primarily due to their short-term nature. The fair values of securities available for sale is determined by relying on the securities’ relationship to other benchmark quoted securities and classified its investments as Level 2 items in both 2022 and 2021. There were no transfers of assets or liabilities between Level 1 and Level 2 and no transfers in or out of Level 3 during the nine-month period ended September 30, 2022 or during the year ended December 31, 2021. The change in Level 3 liabilities in the first quarter of 2022 was the result of a change in the fair value of the earn-out milestone liability which is included in earnings and in-process R&D. During the third quarter and first nine months of 2022, there was no change in the fair value of the earn-out milestone liability. The earnout milestone liability is valued using a risk-adjusted assessment of the probability of payment of each milestone, discounted to present value using an estimated time to achieve the milestone (see Note 13).

 

Assets and liabilities measured at fair value are summarized below:

   

   Total Fair Value   Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)  

Significant Other Observable Inputs

(Level 2)

  

Significant Unobservable Inputs

(Level 3)

 
Assets:                    
                     
Recurring items as of September 30, 2022                    
Corporate debt securities, available for sale  $10,414,395   $              $10,414,395   $