FORTE BIOSCIENCES, INC., 10-K filed on 3/31/2023
Annual Report
v3.23.1
Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Mar. 24, 2023
Jun. 30, 2022
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2022    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Entity Interactive Data Current Yes    
Trading Symbol FBRX    
Entity Current Reporting Status Yes    
Entity Registrant Name FORTE BIOSCIENCES, INC.    
Entity Central Index Key 0001419041    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Shell Company false    
ICFR Auditor Attestation Flag false    
Entity Small Business true    
Entity Emerging Growth Company false    
Title of 12(b) Security Common Stock    
Security Exchange Name NASDAQ    
Entity File Number 001-38052    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 26-1243872    
Entity Address, Address Line One 3060 Pegasus Park Drive, Building 6    
Entity Address, City or Town Dallas    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 75247    
City Area Code 310    
Local Phone Number 618-6994    
Document Annual Report true    
Document Transition Report false    
Entity Public Float     $ 17.5
Entity Common Stock, Shares Outstanding   21,007,069  
Auditor Name Mayer Hoffman McCann P.C.    
Auditor Firm ID 199    
Auditor Location San Diego, California    
Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission, or SEC, subsequent to the date hereof pursuant to Regulation 14A in connection with the registrant’s 2023 Annual Meeting of Stockholders will be incorporated by reference into Part III of this Annual Report on Form 10-K assuming such proxy statement is filed with the SEC not later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2022. If such proxy statement is not filed on or before such date, the information called for by Part III will be filed as part of an amendment to this Annual Report on Form 10-K on or before such date.

   
v3.23.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets:    
Cash and cash equivalents $ 41,100 $ 42,044
Prepaid expenses and other current assets 411 476
Total current assets 41,511 42,520
Other assets 486 786
Total assets 41,997 43,306
Current liabilities:    
Accounts payable 1,153 946
Accrued liabilities 2,026 812
Total current liabilities 3,179 1,758
Commitments and contingencies (Note 5)
Stockholders’ equity    
Common stock, $0.001 par value: 200,000,000 shares authorized as of December 31, 2022 and December 31, 2021; 21,000,069 and 14,754,447 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 21 15
Additional paid-in capital 125,841 114,698
Accumulated deficit (87,044) (73,165)
Total stockholders’ equity 38,818 41,548
Total liabilities and stockholders' equity $ 41,997 $ 43,306
v3.23.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2022
Dec. 31, 2021
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 21,000,069 14,754,447
Common stock, shares outstanding 21,000,069 14,754,447
v3.23.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Operating expenses:    
Research and development $ 5,594 $ 13,853
General and administrative 8,302 7,633
Total operating expenses 13,896 21,486
Loss from operations (13,896) (21,486)
Other income (expenses), net 17 (222)
Net loss $ (13,879) $ (21,708)
Net loss per share - basic $ (0.80) $ (1.55)
Net loss per share - diluted $ (0.80) $ (1.55)
Weighted average shares outstanding, basic 17,383,531 13,967,818
Weighted average shares outstanding, diluted 17,383,531 13,967,818
v3.23.1
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Beginning balance at Dec. 31, 2020 $ 58,980 $ 13 $ 110,424 $ (51,457)
Beginning balance, shares at Dec. 31, 2020   12,830,598    
Exercise of employee stock options 62   62  
Exercise of employee stock options, shares   29,575    
Cashless exercise of warrants   $ 2 (2)  
Cashless exercise of warrants, shares   1,889,274    
Issuance of common stock upon vesting of restricted stock units, shares   5,000    
Stock-based compensation 4,214   4,214  
Net loss (21,708)     (21,708)
Ending Balance at Dec. 31, 2021 41,548 $ 15 114,698 (73,165)
Ending balance, shares at Dec. 31, 2021   14,754,447    
Exercise of employee stock options $ 1   1  
Exercise of employee stock options, shares 1,098 1,098    
Issuance of common stock under ESPP $ 11   11  
Issuance of common stock under ESPP, shares   5,716    
Issuance of common stock through public equity offering, net of offering costs of $595 7,122 $ 6 7,116  
Issuance of common stock through public equity offering, net of offering costs of $595, shares   6,142,158    
Issuance of common stock upon vesting of restricted stock units, shares   96,650    
Stock-based compensation 4,015   4,015  
Net loss (13,879)     (13,879)
Ending Balance at Dec. 31, 2022 $ 38,818 $ 21 $ 125,841 $ (87,044)
Ending balance, shares at Dec. 31, 2022   21,000,069    
v3.23.1
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Parenthetical)
$ in Thousands
12 Months Ended
Dec. 31, 2022
USD ($)
Statement of Stockholders' Equity [Abstract]  
Offering costs $ 595
v3.23.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities:    
Net loss $ (13,879) $ (21,708)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense   36
Impairment of property and equipment   61
Stock based compensation expense 4,015 4,214
Changes in operating assets and liabilities:    
Prepaid expenses and other assets 258 1,221
Accounts payable 207 (294)
Accrued liabilities 1,214 (207)
Net cash used in operating activities (8,185) (16,677)
Cash flows from financing activities:    
Proceeds from issuance of common stock, net of issuance costs 7,229  
Proceeds from exercise of employee stock options and ESPP 12 62
Prepaid financing costs   (106)
Net cash provided by financing activities 7,241 (44)
Net decrease in cash (944) (16,721)
Cash and cash equivalents — beginning of period 42,044 58,765
Cash and cash equivalents — end of period $ 41,100 $ 42,044
v3.23.1
Organization and Description of Business
12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business

1. Organization and Description of Business

 

Forte Biosciences, Inc. (www.fortebiorx.com) and its subsidiaries, referred to herein as the “Company”, is a biopharmaceutical company focused on developing its FB-102 program which the Company believes has potentially broad applications for autoimmune diseases. FB-102 is currently in preclinical development.‌

 

The Company merged with Tocagen, Inc. ("Merger"), a publicly traded biotechnology company, on June 15, 2020. Prior to the Merger, Forte was a privately held company incorporated in Delaware on May 3, 2017. The Company’s common stock is traded on the Nasdaq stock exchange under the ticker symbol “FBRX”‌. On February 12, 2021, the Company incorporated Forte Biosciences Emerald Limited in Dublin, Ireland. This subsidiary was dissolved on April 1, 2022.

Liquidity and Risks

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The consolidated financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. Since inception, the Company has incurred losses and negative cash flows from operations. As of December 31, 2022, the Company had an accumulated deficit of $87.0 million. The Company used $8.2 million of cash in operating activities during the year ended December 31, 2022. Management expects to continue to incur additional losses in the foreseeable future as the Company focuses its development efforts on advancing FB-102 through preclinical trials.

The Company had cash and cash equivalents of approximately $41.1 million as of December 31, 2022. The Company’s cash and cash equivalents are held at financial institutions and exceed federally insured limits. The Company believes that its existing cash and cash equivalents will be sufficient to allow the Company to fund its operations for at least 12 months from the filing date of this Form 10-K.

The Company will continue to need to raise additional capital or obtain financing from other sources. Management may fund future operations through the sale of equity and debt financings and may also seek additional capital through arrangements with strategic partners or other sources. There can be no assurance that additional funding will be available on terms acceptable to the Company, if at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it may be forced to delay or reduce the scope of its research and development programs and/or limit or cease its operations. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the conflicts in Eastern Europe, and otherwise.

There are numerous risks and uncertainties associated with pharmaceutical development and the Company is unable to predict the timing or amount of increased expenses on the development of future product candidates or when or if it will start to generate revenues. Even if the Company does generate revenues, it may not be able to achieve or maintain profitability. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then it may be unable to continue its operations at planned levels and may be forced to reduce its operations.

The pandemic caused by outbreaks of new strains of coronaviruses, or COVID-19 and its variants, has resulted, and may continue to result, in significant national and global economic disruption and may adversely affect the Company’s operations. The Company is actively monitoring the impact of COVID-19 and the possible effects on its financial condition, liquidity, operations, suppliers, industry, and workforce. However, the full extent, consequences, and duration of the COVID-19 pandemic and the resulting impact on the Company cannot currently be predicted. The Company will continue to evaluate the impact that these events could have on its operations, financial position, results of operations and cash flows for the foreseeable future.

v3.23.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as found in the Accounting Standards Codification (“ASC”), the Accounting Standards Update

(“ASU”), of the Financial Accounting Standards Board (“FASB”), and the rules and regulations of the US Securities and Exchange Commission (“SEC”).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Forte Subsidiary, Inc. and Forte Biosciences Emerald Limited. All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements.

Use of Estimates

The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. Significant management estimates that affect the reported amounts of assets, liabilities and expenses include stock-based compensation expense and accruals for clinical trials and drug manufacturing. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Segment Information

The Company operates as a single operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources, making operating decisions and evaluating financial performance.

Cash and cash equivalents

Cash and cash equivalents include money market funds and deposits with commercial banks. Cash equivalents are defined as short-term, highly liquid investments with original maturities of 90 days or less at the date of purchase.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a three-level hierarchy that prioritizes the inputs used in determining fair value by their reliability and preferred use as follows:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities.

 

Level 2 – Valuations based on quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data.

 

Level 3 – Valuations based on inputs that are both significant to the fair value measurements and are unobservable.

To the extent that a valuation is based on models or inputs that are less observable, or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

There have been no significant changes to the valuation methods utilized by the Company during the periods presented. There have been no transfers between Level 1, Level 2, and Level 3 in any periods presented.

The carrying amounts of financial instruments consisting of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued liabilities included in the Company’s financial statements are reasonable estimates of fair value, primarily due to their short maturities.

The Company had $5.0 million in money market funds as of December 31, 2022 and 2021, which are classified within Level 1. Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. Money market funds were included as cash and cash equivalents in the consolidated balance sheets at December 31, 2022 and 2021.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and benefits of research and development personnel, costs related to research activities, preclinical studies, clinical trials and drug manufacturing. Non-refundable advance payments for goods or services that will be used in future research and development activities are deferred and capitalized and are only expensed when the goods have been received or when the service has been performed rather than when the payment is made.

Drug manufacturing and clinical trial costs are a component of research and development expenses. The Company expenses costs for its drug manufacturing activities performed by Contract Manufacturing Organizations (“CMOs”), preclinical and clinical trial costs performed by Contract Research Organizations (“CROs”) and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the percentage of completion and therefore the expense to be incurred.

Patent Costs

Costs to secure, defend and maintain patents are expensed as incurred, and are classified as general and administrative expenses due to the uncertainty of future benefits.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents.

Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock and common stock equivalents outstanding during the period in accordance with the treasury stock method. The following number of unexercised stock options, restricted stock units and warrants, which are common stock equivalents, have been excluded from the diluted net loss calculation as their effect would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2022

 

 

2021

 

Options

 

 

 

2,363,195

 

 

 

1,281,396

 

Restricted stock units

 

 

 

162,201

 

 

 

258,851

 

Warrants

 

 

 

4,434

 

 

 

4,434

 

Total

 

 

 

2,529,830

 

 

 

1,544,681

 

 

Stock-Based Compensation

The Company issues stock-based awards to employees, directors and non-employees, generally in the form of stock options, restricted stock units or rights granted to employees under the Employee Stock Purchase Plan (“ESPP”). The Company accounts for stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation.

The Company measures compensation cost for all equity awards for employees, directors and non-employees at their grant-date fair value and recognizes compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period. The grant-date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant-date fair value of restricted stock units is determined using the Company’s closing stock price on the date of grant. Forfeitures are recognized as they occur.

Stock-based compensation expense for an award with a performance condition is recognized when the achievement of the performance condition has been determined to be probable. If the outcome of such performance condition has not been determined to be probable, or has not been met, no compensation expense is recognized and any previously recognized compensation expense is reversed. For rights granted under the ESPP, the fair value of each purchase is estimated at the beginning of the offering period using the Black-Scholes option pricing model.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s salary and related costs are classified in the case of employees, or in which the award recipient’s service payments are classified in the case of directors and non-employees.

Foreign Currency Transactions

The Company is subject to foreign currency risk with respect to contracts denominated in currencies other than the U.S. dollar. Payments for contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded to other expenses, net in the consolidated statements of operations.

Income Taxes

The Company uses an asset and liability approach to account for income taxes. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to be in effect for the years in which differences are expected to reverse.

Valuation allowances are provided when the expected realization of deferred tax assets does not meet a “more likely than not” criterion. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with its plans and estimates. Should the actual amounts differ from those estimates, the amount of the valuation allowance could be materially impacted. Changes in these estimates may result in significant increases or decreases to the Company’s tax provision in a period in which such estimates are changed, which in turn would affect net income or loss.

The Company recognizes tax benefits from uncertain tax positions if it believes the position is more likely than not to be sustained on examination by the taxing authorities based on the technical merits of the position. The Company makes adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of any reserves for tax positions that are not more likely than not to be sustained, as well as the related net interest and penalties.

Impairment of Property and Equipment

The Company reviews its property and equipment for impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to future net undiscounted cash flows that the assets or the asset groups are expected to generate. If such assets are considered impaired, the impairment to be recognized is measured by the amount the book value of the assets exceed their fair value, which is measured based on the estimated discounted future net cash flows arising from the assets or asset groups. No impairment losses on property and equipment have been recorded for the year ended December 31, 2022. Impairment losses on property and equipment of $61,000 have been recorded for the year ended December 31, 2021.

Comprehensive Loss

Comprehensive loss includes net loss and other comprehensive loss for the periods presented. The Company did not have other comprehensive loss items such as unrealized gains and losses and so for the years ended December 31, 2022 and 2021, comprehensive loss was equal to the net loss.

Recently Issued Accounting Standards Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of a specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations.

In August 2020, the FASB issued ​ASU 2020-06​, ​Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in an Entity’s Own Equity (Subtopic 815-40)​ (“ASU 2020-06”). ​ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted earnings per share computation. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but not earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements and does not expect the adoption of this amended guidance to have a material impact on the Company’s consolidated financial statements.

v3.23.1
Balance Sheet Components
12 Months Ended
Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]  
Balance Sheet Components

3. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of December 31, 2022 and 2021 consist of the following (in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Prepaid insurance

 

$

341

 

 

$

387

 

Other

 

 

70

 

 

 

89

 

Total Prepaid Expenses and Other Current Assets

 

$

411

 

 

$

476

 

 

Other Assets

Other assets as of December 31, 2022 and 2021 consist of the following (in thousands).

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Prepaid insurance

 

$

473

 

 

$

667

 

Prepaid offering costs

 

 

-

 

 

 

106

 

Other

 

 

13

 

 

 

13

 

Total Other Assets

 

$

486

 

 

$

786

 

 

Accrued Liabilities

Accrued liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 Accrued legal and professional fees

 

$

643

 

 

$

75

 

 Accrued compensation

 

 

890

 

 

 

681

 

 Accrued manufacturing and clinical expenses

 

 

485

 

 

 

40

 

 Accrued other expenses

 

 

8

 

 

 

16

 

Total Accrued Liabilities

 

$

2,026

 

 

$

812

 

v3.23.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

4. Commitments and Contingencies

Concentrations of Credit Risk

Bank accounts in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company’s cash accounts significantly exceed FDIC limits.

Indemnifications

As permitted under Delaware law, the Company indemnifies its officers, directors, and employees for certain events and occurrences while the officer, employee or director is, or was, serving at the Company’s request in such capacity.

License to Patented Technology

In December 2017, the Company entered into an exclusive license agreement with the Department of Health and Human Services (“DHHS”). Under the agreement, the DHHS granted the Company an exclusive, sublicensable, worldwide license to certain patent rights under which the Company may develop and commercialize pharmaceutical and biological compositions comprising Gram-negative bacteria for the topical treatment of dermatological diseases and conditions (the “DHHS License”). The Company terminated the license agreement with DHHS effective April 2, 2022 without meeting any milestones.

The Company incurred $25,000 and 100,000 in minimum royalty expenses for the years ended December 31, 2022 and 2021, respectively.

Lease Agreement

In April 2019, the Company entered into a lease agreement for certain office and laboratory space in Torrance, California. The lease in Torrance was terminated in December 2021 and replaced with a new lease for office and laboratory space in Dallas, Texas in December 2021. The lease in Dallas is cancellable by the Company at any time with a 30-day notice. In June 2021, the Company entered into a lease agreement for additional office space at a separate location for an initial lease of 6 months after which the lease term will be month-to-month. Total rent expense was $19,000 for the year ended December 31, 2022. Total rent expense for all locations for the year ended December 31, 2021 was $5,000, which included a credit of $9,000 from a refund for operating expenses from a previous Tocagen facility.

 

Preclinical Services‌

 

The Company has entered into various agreements with third party vendors for preclinical services. The estimated remaining commitments as of December 31, 2022 under these agreements were approximately $2.3 million.

 

Legal Proceedings

 

In November 2022, a stockholder of the Company filed a complaint in the Delaware Court of Chancery to access certain books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law, as well as to seek attorney fees (the “Books and Records Action”). The Books and Records Action remains pending. The Company believes that it has meritorious defenses to the claims asserted in the Books and Records Action and intends to vigorously defend against it and may be entitled to attorney fees should the stockholder not determine to dismiss the action.

v3.23.1
Equity
12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Equity

5. Equity

Preferred Stock

The Company has 10 million authorized shares of Series A Preferred Stock, par value $0.001, with no shares oustanding as of December 31, 2022 and 2021.

Common Stock

In June 2021, the Company filed a shelf registration statement on Form S-3 that went effective in June 2021 which will allow the Company to raise up to $300 million in additional capital. On March 31, 2022, the Company entered into an “at-the-market” equity offering program (“ATM Facility”) whereby the Company may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility. On April 1, 2022, the Company filed a prospectus supplement to the June 2021 Form S-3 relating to the offer and sale of the shares pursuant to the ATM Facility covering sales of up to $7.0 million of shares of common stock. On August 12, 2022, the Company filed an additional prospectus supplement relating to the offer and sale of shares pursuant to the ATM Facility covering sales of up to an additional $2.7 million of shares of common stock. The Company is not obligated to sell any shares under the ATM Facility. The ATM Facility may be terminated at any time upon ten days’ prior notice, or at any time in certain circumstances, including the occurrence of a material adverse effect on the Company. The Company has agreed to pay the sales agent a commission equal to 3.0% of the gross proceeds from the sales of shares under the ATM Facility and has agreed to provide the sales agent with customary indemnification and contribution rights. The Company issued 6.1

million shares of common stock for gross proceeds of approximately $7.7 million under the ATM Facility from July 1, 2022 through December 31, 2022 and incurred $595,000 in issuance costs related to the ATM Facility and shelf registration statement.

In connection with the Merger in June 2020, the Company issued warrants to purchase 2,752,546 shares (“Concurrent Financing Warrants”) of the Company’s common stock at an exercise price of $10.56 per share. All Concurrent Financing Warrants were subsequently exercised on a cashless basis in 2021 resulting in 1,889,274 additional shares of common stock being issued. As of December 31, 2022, no Concurrent Financing Warrants were outstanding.

Warrants to purchase 4,434 shares of the Company’s common stock at an exercise price of $140.25 per share which were previously issued by Tocagen, survived the Merger and remained outstanding as of December 31, 2022 and 2021. These warrants have an expiration date of October 30, 2025.

 

Rights Plan

On July 11, 2022, the Company authorized and declared a dividend distribution of one right (each, a “Right”) for each outstanding share of common stock of the Company to stockholders of record as of the close of business on July 21, 2022. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Participating Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of the Company at an exercise price of $16.00 per one one-thousandth of a share of Preferred Stock, subject to adjustment. The Rights are not exercisable until the Distribution Date. The Distribution Date is the 10th business day after the public announcement that a person or group of affiliated or associated persons has acquired beneficial ownership of 10 percent or more of our common stock or the 10th business day after a person or group announces a tender or exchange offer that would result in ownership by a person or group of 10 percent or more of our common stock.

The Rights will be redeemable at the Company’s option for $0.001 per Right at any time on or prior to the 10th business day after the public announcement that an Acquiring Person has acquired beneficial ownership of 10 percent or more of the Common Stock.

The Rights expire on the earliest of July 12, 2023 or on the redemption or exchange of the Rights. There is no financial statement impact until such time as the rights become exercisable.

v3.23.1
Stock-Based Compensation
12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

6. Stock-Based Compensation

Equity Plans

The Company inherited the 2017 Equity Incentive Plan (the "2017 Plan") as part of its merger with Tocagen, Inc. in June 2020. The 2017 Plan was terminated in May 2021 and replaced by the 2021 Equity Incentive Plan (the “2021 Plan”). The 2017 Plan will continue to govern outstanding awards issued under the 2017 Plan. The 2021 Plan had an initial reserve of 1,000,000 shares available for grant. The 2021 Plan was amended in June 2022 to increase the shares available for grant by an additional 1,500,000 shares. The 2021 Plan provides for the grant of incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, other forms of equity compensation and performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants of the Company and its affiliates. Service-based awards generally vested over a four-year period, with the first 25% of such awards vesting following twelve months of continued employment or service with the remaining awards vesting monthly in equal installments over the following thirty-six months. For certain service-based awards to the board of directors, vesting occurs in thirty-six equal monthly installments over a three-year period for initial grants and in twelve equal monthly installments over a twelve-month period for subsequent grants. As of December 31, 2022, there were 1,337,277 shares available for issuance under the 2021 Plan.

On July 26, 2020, the Company adopted the 2020 Inducement Equity Incentive Plan (the “2020 Inducement Plan”) and reserved 500,000 shares for future grant under the 2020 Inducement Plan. As of December 31, 2022, there were 115,000 shares available for issuance under the 2020 Inducement Plan.

Stock Options

The risk-free interest rate assumption for stock options is based on the U.S. Treasury yield curve rate at the date of grant with a maturity approximating the expected term of the option.

The expected term assumption for options granted to employees is determined using the simplified method that represents the average of the contractual term of the option and the weighted average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term.

Due to the Company’s limited trading of its common stock and lack of company-specific historical or implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies in the life sciences industry whose shares are publicly traded. The Company selects the peer group based on comparable characteristics, including development stage, product pipeline, and market capitalization. The Company computes historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until sufficient amount of historical information regarding the volatility of its own stock price become available.

The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The fair value per share of common stock is the closing stock price on the option grant date.

The weighted average grant-date fair value of stock options granted to employees and non-employees for the years ended December 31, 2022 and 2021 was $0.91 and $21.89, respectively. The weighted-average assumptions used to value these stock options using the Black-Scholes option-pricing model were as follows.

 

 

 

Year ended
December 31, 2022

 

 

Year Ended December 31, 2021

 

Fair value of common stock and exercise price

 

$

1.47

 

 

$

35.78

 

Risk-free interest rate

 

 

2.31

%

 

 

0.94

%

Dividend yield

 

 

0.00

%

 

 

0.00

%

Expected term of options (years)

 

 

5.88

 

 

 

5.95

 

Volatility

 

 

68.75

%

 

 

69.02

%

 

 

 

The table below summarizes the stock option activity during the year ended December 31, 2022:

 

 

 

Number of
Shares
Outstanding

 

 

Weighted-
Average
Exercise Price

 

 

Weighted-
Average
Remaining
Contractual
Term
(Years)

 

 

Aggregate
Intrinsic
Value (in thousands)

 

Balances at December 31, 2021

 

 

1,281,396

 

 

$

18.18

 

 

 

7.94

 

 

 

617

 

Granted

 

 

1,199,166

 

 

$

1.47

 

 

 

 

 

 

 

Exercised

 

 

(1,098

)

 

$

1.06

 

 

 

 

 

$

-

 

Cancelled/Forfeited

 

 

(116,269

)

 

$

26.78

 

 

 

 

 

 

 

Balances at December 31, 2022

 

 

2,363,195

 

 

$

9.29

 

 

8.22

 

 

$

65

 

Vested and expected to vest at December 31, 2022

 

 

2,363,195

 

 

$

9.29

 

 

8.22

 

 

$

65

 

Exercisable at December 31, 2022

 

 

546,916

 

 

$

19.97

 

 

 

8.05

 

 

$

6

 

 

The aggregate intrinsic value of stock options as of December 31, 2022 is based on the Company’s closing stock price of $1.00 per share.

 

Restricted Stock Unit Awards

 

The restricted stock units granted during the year ended December 31, 2021 have performance-based vesting. The Company concluded that as of December 31, 2021, it was probable the performance criteria would be met and $252,000 in expense was recorded in the Consolidated Statement of Operations for the year ended December 31, 2021.

 

There were no restricted stock units granted during the year ended December 31, 2022. The Company made a change in accounting estimate during the year ended December 31, 2022 related to the vesting of performance-based restricted stock units. As a result of this change in accounting estimate, $158,000 of expense that had been previously recognized in 2021 was reversed during the year ended December 31, 2022.

Restricted stock unit award transactions during the year ended December 31, 2022 were as follows:

 

 

 

 

 

 

Weighted Avg

 

 

 

 

 

 

Grant Date

 

 

 

Shares

 

 

Fair Value

 

Outstanding at December 31, 2021

 

 

258,851

 

 

$

 

3.36

 

Granted

 

 

 

 

 

 

 

Forfeited/Cancelled

 

 

 

 

 

 

 

Issued as Common Stock

 

 

(96,650

)

 

 

 

3.36

 

Outstanding at December 31, 2022

 

 

162,201

 

 

$

 

3.36

 

2017 Employee Stock Purchase Plan

In May 2021, the Company’s board of directors reactivated the Company’s 2017 Employee Stock Purchase Plan (“ESPP”) which had previously been suspended. The ESPP allows eligible employees to withhold up to 15% of their earnings to purchase shares of the Company’s common stock at a price per share equal to the lower of (i) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. The Company had 318,522 shares available for future issuance under the ESPP as of December 31, 2022. The number of shares of common stock reserved for issuance will automatically increase on January 1 of each calendar year through January 1, 2027, by the lesser of (a) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (b) 300,000 shares, or (c) a number determined by the Company’s board of directors that is less than (a) and (b). The Company issued 5,716 shares under the ESPP during the year ended December 31, 2022. The ESPP is considered a compensatory plan. The Company recorded stock-based compensation expense related to its ESPP of $3 thousand and $25 thousand for the years ended December 31, 2022 and 2021, respectively.

 

 

The fair value of the rights granted to employees under the ESPP was estimated using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions:

 

 

Year ended
December 31, 2022

 

 

Year Ended December 31, 2021

 

Fair value of common stock and exercise price

 

$

1.32

 

 

$

34.97

 

Risk-free interest rate

 

 

2.52

%

 

 

0.05

%

Dividend yield

 

 

0.00

%

 

 

0.00

%

Expected term of options (years)

 

 

0.51

 

 

 

0.51

 

Volatility

 

 

76.71

%

 

 

64.08

%

 

Stock-Based Compensation Expense

Stock-based compensation expenses included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021 are as follows (in thousands):

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Research and development

 

$

1,270

 

 

$

1,448

 

General and administrative

 

 

2,745

 

 

 

2,766

 

Total

 

$

4,015

 

 

$

4,214

 

 

As of December 31, 2022, there was unrecognized stock-based compensation expense of $6.2 million related to stock options with service conditions, which is expected to be recognized over a weighted-average period of 2.15 years. Total unrecognized stock-based compensation as of December 31, 2022 was approximately $233 thousand related to stock options and restricted stock units with performance based vesting.

v3.23.1
Income Taxes
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

7. Income Taxes

 

For the years ended December 31, 2022 and 2021, the Company did not record a current or deferred income tax expense or benefit due to a valuation allowance position.

The benefit for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income as a result of the following differences (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Income tax expense (benefit) at federal statutory rate

 

$

(2,915

)

 

21.0

%

 

$

(4,558

)

 

21.0

%

Increase/(decrease) in tax resulting from:

 

 

 

 

 

 

 

 

 

 

State income taxes

 

 

(79

)

 

0.6

%

 

 

479

 

 

-2.2

%

Change in valuation allowance

 

 

2,628

 

 

-18.9

%

 

 

3,807

 

 

-17.5

%

Transaction adjustments

 

 

 

 

0.0

%

 

 

281

 

 

-1.3

%

Stock-based compensation

 

 

370

 

 

-2.7

%

 

 

58

 

 

-0.3

%

Other

 

 

(4

)

 

0.0

%

 

 

(67

)

 

0.3

%

Total

 

$

 

 

0.0

%

 

$

 

 

0.0

%

 

The primary components of temporary differences which give rise to the Company’s net deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows:

 

 

Year Ended December 31,

 

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

Accrual to cash adjustment

$

480

 

 

$

268

 

Start-up costs

 

2,949

 

 

 

2,111

 

Patent costs

 

40

 

 

 

40

 

Stock option expense

 

1,391

 

 

 

944

 

Net operating loss

 

6,039

 

 

 

5,968

 

Capitalized R&D

 

978

 

 

 

 

Other deferred taxes

 

10

 

 

 

10

 

R&D credits

 

328

 

 

 

245

 

Total noncurrent deferred tax assets

 

12,215

 

 

 

9,586

 

Valuation Allowance

 

(12,215

)

 

 

(9,586

)

Net deferred tax assets after valuation allowance

$

 

 

$

 

 

Beginning January 1, 2022, the Tax Cuts and Jobs Act (the "Tax Act”) eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to capitalize such expenses pursuant to Internal Revenue Code (“IRC”) Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. As a result of this provision of the Tax Act, deferred tax assets related to capitalized research expenses increased by $978 thousand.

 

The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based upon the Company’s history of operating losses, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2022 and 2021. During 2022 and 2021, the valuation allowance increased by $2.6 million and $3.8 million, respectively.

 

The Company has federal and California net operating loss carryforwards which may be available to offset future income tax liabilities. As of December 31, 2022, the Company has federal net operating losses of $24.9 million some of which begin to expire in 2037 unless utilized. The Company has state net operating carryforwards of $11.6 million that begin to expire in 2037 unless previously utilized.

 

As of December 31, 2022, the Company has federal and California research and development tax credit carryforwards of approximately $268 thousand and $254 thousand, respectively. The federal research and development tax credits begin to expire in 2041 unless previously utilized. The California credits do not expire.

 

The Company is subject to taxation in the U.S. and California. As of December 31, 2022, Tocagen’s tax years beginning 2007 to date are subject to examination by federal and California taxing authorities due to the carry forward of unutilized net operating losses and research and development tax credits. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period.

 

Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of a company’s net operating loss and tax credit carryforwards may be limited if there is a cumulative change in ownership of greater than 50% (by value) within a three-year period. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed several equity offerings since its inception which may have resulted in a change in control as defined by Sections 382 and 383 of the IRC, or could result in a change in control in the future. The Company has not completed an IRC Section 382 and 383 analysis regarding the limitation of net operating loss and research and development credit carryforwards. Until such an analysis has been completed, the Company has removed the deferred tax assets for net operating losses of $74.2 million and federal and California research and development credits of approximately $36.3 million from its deferred tax asset schedule and has recorded a corresponding decrease to its valuation allowance. When this analysis is finalized, the Company plans to update its unrecognized tax benefits accordingly. The Company does not expect this analysis to be completed within the next 12 months and, as a result, the Company does not expect that the unrecognized tax benefits will change within 12 months of this reporting date. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact the Company’s effective tax rate.

 

The Company’s policy is to record interest and penalties relating to uncertain tax positions as a component of income tax expense should the Company believe there is an uncertain tax position liability. As of December 31, 2022, and 2021, there was no accrued interest or penalties for uncertain positions.

v3.23.1
Related Party Transactions
12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Related Party Transactions

8. Related Party Transactions

Two members of the Company’s board of directors received cash payments of $9 thousand and $7 thousand for scientific consulting services during the year ended December 31, 2022. The Company had no outstanding accounts payable to either of these directors as of December 31, 2022.

One member of the Company’s board of directors received a cash payment of $1,000 for scientific consulting services during the year ended December 31, 2021. The Company had no outstanding accounts payable to this director as of December 31, 2021.

v3.23.1
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as found in the Accounting Standards Codification (“ASC”), the Accounting Standards Update

(“ASU”), of the Financial Accounting Standards Board (“FASB”), and the rules and regulations of the US Securities and Exchange Commission (“SEC”).

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Forte Subsidiary, Inc. and Forte Biosciences Emerald Limited. All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements.

Use of Estimates

Use of Estimates

The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. Significant management estimates that affect the reported amounts of assets, liabilities and expenses include stock-based compensation expense and accruals for clinical trials and drug manufacturing. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Segment Information

Segment Information

The Company operates as a single operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources, making operating decisions and evaluating financial performance.

Cash and Cash Equivalents

Cash and cash equivalents

Cash and cash equivalents include money market funds and deposits with commercial banks. Cash equivalents are defined as short-term, highly liquid investments with original maturities of 90 days or less at the date of purchase.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a three-level hierarchy that prioritizes the inputs used in determining fair value by their reliability and preferred use as follows:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities.

 

Level 2 – Valuations based on quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data.

 

Level 3 – Valuations based on inputs that are both significant to the fair value measurements and are unobservable.

To the extent that a valuation is based on models or inputs that are less observable, or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

There have been no significant changes to the valuation methods utilized by the Company during the periods presented. There have been no transfers between Level 1, Level 2, and Level 3 in any periods presented.

The carrying amounts of financial instruments consisting of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued liabilities included in the Company’s financial statements are reasonable estimates of fair value, primarily due to their short maturities.

The Company had $5.0 million in money market funds as of December 31, 2022 and 2021, which are classified within Level 1. Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. Money market funds were included as cash and cash equivalents in the consolidated balance sheets at December 31, 2022 and 2021.

Research and Development Costs

Research and Development Costs

Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and benefits of research and development personnel, costs related to research activities, preclinical studies, clinical trials and drug manufacturing. Non-refundable advance payments for goods or services that will be used in future research and development activities are deferred and capitalized and are only expensed when the goods have been received or when the service has been performed rather than when the payment is made.

Drug manufacturing and clinical trial costs are a component of research and development expenses. The Company expenses costs for its drug manufacturing activities performed by Contract Manufacturing Organizations (“CMOs”), preclinical and clinical trial costs performed by Contract Research Organizations (“CROs”) and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the percentage of completion and therefore the expense to be incurred.

Patent Costs

Patent Costs

Costs to secure, defend and maintain patents are expensed as incurred, and are classified as general and administrative expenses due to the uncertainty of future benefits.

Net Loss Per Share

Net Loss Per Share

Basic net loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents.

Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock and common stock equivalents outstanding during the period in accordance with the treasury stock method. The following number of unexercised stock options, restricted stock units and warrants, which are common stock equivalents, have been excluded from the diluted net loss calculation as their effect would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2022

 

 

2021

 

Options

 

 

 

2,363,195

 

 

 

1,281,396

 

Restricted stock units

 

 

 

162,201

 

 

 

258,851

 

Warrants

 

 

 

4,434

 

 

 

4,434

 

Total

 

 

 

2,529,830

 

 

 

1,544,681

 

Stock-Based Compensation

Stock-Based Compensation

The Company issues stock-based awards to employees, directors and non-employees, generally in the form of stock options, restricted stock units or rights granted to employees under the Employee Stock Purchase Plan (“ESPP”). The Company accounts for stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation.

The Company measures compensation cost for all equity awards for employees, directors and non-employees at their grant-date fair value and recognizes compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period. The grant-date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant-date fair value of restricted stock units is determined using the Company’s closing stock price on the date of grant. Forfeitures are recognized as they occur.

Stock-based compensation expense for an award with a performance condition is recognized when the achievement of the performance condition has been determined to be probable. If the outcome of such performance condition has not been determined to be probable, or has not been met, no compensation expense is recognized and any previously recognized compensation expense is reversed. For rights granted under the ESPP, the fair value of each purchase is estimated at the beginning of the offering period using the Black-Scholes option pricing model.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s salary and related costs are classified in the case of employees, or in which the award recipient’s service payments are classified in the case of directors and non-employees.

Foreign Currency Transactions

Foreign Currency Transactions

The Company is subject to foreign currency risk with respect to contracts denominated in currencies other than the U.S. dollar. Payments for contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded to other expenses, net in the consolidated statements of operations.

Income Taxes

Income Taxes

The Company uses an asset and liability approach to account for income taxes. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to be in effect for the years in which differences are expected to reverse.

Valuation allowances are provided when the expected realization of deferred tax assets does not meet a “more likely than not” criterion. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with its plans and estimates. Should the actual amounts differ from those estimates, the amount of the valuation allowance could be materially impacted. Changes in these estimates may result in significant increases or decreases to the Company’s tax provision in a period in which such estimates are changed, which in turn would affect net income or loss.

The Company recognizes tax benefits from uncertain tax positions if it believes the position is more likely than not to be sustained on examination by the taxing authorities based on the technical merits of the position. The Company makes adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of any reserves for tax positions that are not more likely than not to be sustained, as well as the related net interest and penalties.

Impairment of Property and Equipment

Impairment of Property and Equipment

The Company reviews its property and equipment for impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to future net undiscounted cash flows that the assets or the asset groups are expected to generate. If such assets are considered impaired, the impairment to be recognized is measured by the amount the book value of the assets exceed their fair value, which is measured based on the estimated discounted future net cash flows arising from the assets or asset groups. No impairment losses on property and equipment have been recorded for the year ended December 31, 2022. Impairment losses on property and equipment of $61,000 have been recorded for the year ended December 31, 2021.

Comprehensive Loss

Comprehensive Loss

Comprehensive loss includes net loss and other comprehensive loss for the periods presented. The Company did not have other comprehensive loss items such as unrealized gains and losses and so for the years ended December 31, 2022 and 2021, comprehensive loss was equal to the net loss.
Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of a specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations.

In August 2020, the FASB issued ​ASU 2020-06​, ​Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in an Entity’s Own Equity (Subtopic 815-40)​ (“ASU 2020-06”). ​ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted earnings per share computation. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but not earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements and does not expect the adoption of this amended guidance to have a material impact on the Company’s consolidated financial statements.

v3.23.1
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Schedule of Common Stock Equivalents Excluded from Diluted Net Loss Calculation The following number of unexercised stock options, restricted stock units and warrants, which are common stock equivalents, have been excluded from the diluted net loss calculation as their effect would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2022

 

 

2021

 

Options

 

 

 

2,363,195

 

 

 

1,281,396

 

Restricted stock units

 

 

 

162,201

 

 

 

258,851

 

Warrants

 

 

 

4,434

 

 

 

4,434

 

Total

 

 

 

2,529,830

 

 

 

1,544,681

 

v3.23.1
Balance Sheet Components (Tables)
12 Months Ended
Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]  
Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of December 31, 2022 and 2021 consist of the following (in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Prepaid insurance

 

$

341

 

 

$

387

 

Other

 

 

70

 

 

 

89

 

Total Prepaid Expenses and Other Current Assets

 

$

411

 

 

$

476

 

Schedule of Other Assets

Other assets as of December 31, 2022 and 2021 consist of the following (in thousands).

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Prepaid insurance

 

$

473

 

 

$

667

 

Prepaid offering costs

 

 

-

 

 

 

106

 

Other

 

 

13

 

 

 

13

 

Total Other Assets

 

$

486

 

 

$

786

 

Components of Accrued Liabilities

Accrued liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 Accrued legal and professional fees

 

$

643

 

 

$

75

 

 Accrued compensation

 

 

890

 

 

 

681

 

 Accrued manufacturing and clinical expenses

 

 

485

 

 

 

40

 

 Accrued other expenses

 

 

8

 

 

 

16

 

Total Accrued Liabilities

 

$

2,026

 

 

$

812

 

v3.23.1
Stock-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2022
Summary of Weighted-Average Assumptions Used to Value Stock Options The weighted-average assumptions used to value these stock options using the Black-Scholes option-pricing model were as follows.

 

 

 

Year ended
December 31, 2022

 

 

Year Ended December 31, 2021

 

Fair value of common stock and exercise price

 

$

1.47

 

 

$

35.78

 

Risk-free interest rate

 

 

2.31

%

 

 

0.94

%

Dividend yield

 

 

0.00

%

 

 

0.00

%

Expected term of options (years)

 

 

5.88

 

 

 

5.95

 

Volatility

 

 

68.75

%

 

 

69.02

%

Summary of Stock Option Activity

The table below summarizes the stock option activity during the year ended December 31, 2022:

 

 

 

Number of
Shares
Outstanding

 

 

Weighted-
Average
Exercise Price

 

 

Weighted-
Average
Remaining
Contractual
Term
(Years)

 

 

Aggregate
Intrinsic
Value (in thousands)

 

Balances at December 31, 2021

 

 

1,281,396

 

 

$

18.18

 

 

 

7.94

 

 

 

617

 

Granted

 

 

1,199,166

 

 

$

1.47

 

 

 

 

 

 

 

Exercised

 

 

(1,098

)

 

$

1.06

 

 

 

 

 

$

-

 

Cancelled/Forfeited

 

 

(116,269

)

 

$

26.78

 

 

 

 

 

 

 

Balances at December 31, 2022

 

 

2,363,195

 

 

$

9.29

 

 

8.22

 

 

$

65

 

Vested and expected to vest at December 31, 2022

 

 

2,363,195

 

 

$

9.29

 

 

8.22

 

 

$

65

 

Exercisable at December 31, 2022

 

 

546,916

 

 

$

19.97

 

 

 

8.05

 

 

$

6

 

Summary of Restricted Stock Unit Award Transactions

Restricted stock unit award transactions during the year ended December 31, 2022 were as follows:

 

 

 

 

 

 

Weighted Avg

 

 

 

 

 

 

Grant Date

 

 

 

Shares

 

 

Fair Value

 

Outstanding at December 31, 2021

 

 

258,851

 

 

$

 

3.36

 

Granted

 

 

 

 

 

 

 

Forfeited/Cancelled

 

 

 

 

 

 

 

Issued as Common Stock

 

 

(96,650

)

 

 

 

3.36

 

Outstanding at December 31, 2022

 

 

162,201

 

 

$

 

3.36

 

Summary of Stock-Based Compensation Expenses

Stock-based compensation expenses included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021 are as follows (in thousands):

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Research and development

 

$

1,270

 

 

$

1,448

 

General and administrative

 

 

2,745

 

 

 

2,766

 

Total

 

$

4,015

 

 

$

4,214

 

ESPP  
Summary of Weighted-Average Assumptions Used to Value Stock Options

The fair value of the rights granted to employees under the ESPP was estimated using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions:

 

 

Year ended
December 31, 2022

 

 

Year Ended December 31, 2021

 

Fair value of common stock and exercise price

 

$

1.32

 

 

$

34.97

 

Risk-free interest rate

 

 

2.52

%

 

 

0.05

%

Dividend yield

 

 

0.00

%

 

 

0.00

%

Expected term of options (years)

 

 

0.51

 

 

 

0.51

 

Volatility

 

 

76.71

%

 

 

64.08

%

 

v3.23.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Summary of Reconciliations of Income Tax

The benefit for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income as a result of the following differences (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Income tax expense (benefit) at federal statutory rate

 

$

(2,915

)

 

21.0

%

 

$

(4,558

)

 

21.0

%

Increase/(decrease) in tax resulting from:

 

 

 

 

 

 

 

 

 

 

State income taxes

 

 

(79

)

 

0.6

%

 

 

479

 

 

-2.2

%

Change in valuation allowance

 

 

2,628

 

 

-18.9

%

 

 

3,807

 

 

-17.5

%

Transaction adjustments

 

 

 

 

0.0

%

 

 

281

 

 

-1.3

%

Stock-based compensation

 

 

370

 

 

-2.7

%

 

 

58

 

 

-0.3

%

Other

 

 

(4

)

 

0.0

%

 

 

(67

)

 

0.3

%

Total

 

$

 

 

0.0

%

 

$

 

 

0.0

%

Components of Net Deferred Tax Assets and Liabilities

The primary components of temporary differences which give rise to the Company’s net deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows:

 

 

Year Ended December 31,

 

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

Accrual to cash adjustment

$

480

 

 

$

268

 

Start-up costs

 

2,949

 

 

 

2,111

 

Patent costs

 

40

 

 

 

40

 

Stock option expense

 

1,391

 

 

 

944

 

Net operating loss

 

6,039

 

 

 

5,968

 

Capitalized R&D

 

978

 

 

 

 

Other deferred taxes

 

10

 

 

 

10

 

R&D credits

 

328

 

 

 

245

 

Total noncurrent deferred tax assets

 

12,215

 

 

 

9,586

 

Valuation Allowance

 

(12,215

)

 

 

(9,586

)

Net deferred tax assets after valuation allowance

$

 

 

$

 

v3.23.1
Organization and Description of Business - Additional Information (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Organization Consolidation And Presentation Of Financial Statements [Line Items]    
Accumulated deficit $ 87,044 $ 73,165
Cash used in operating activities (8,185) (16,677)
Cash and cash equivalents $ 41,100 $ 42,044
v3.23.1
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Schedule Of Significant Accounting Policies [Line Items]    
Transfers between fair value hierarchy levels   $ 0
Impairment losses on property and equipment $ 0 61,000
Other comprehensive income (loss) 0 0
Level 1    
Schedule Of Significant Accounting Policies [Line Items]    
Money market funds, at carrying value $ 5,000,000.0 $ 5,000,000.0
v3.23.1
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents Excluded from Diluted Net Loss Calculation (Details) - shares
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]    
Anti-dilutive securities excluded from diluted net loss calculation 2,529,830 1,544,681
Options    
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]    
Anti-dilutive securities excluded from diluted net loss calculation 2,363,195 1,281,396
Restricted Stock Units    
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]    
Anti-dilutive securities excluded from diluted net loss calculation 162,201 258,851
Warrants    
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]    
Anti-dilutive securities excluded from diluted net loss calculation 4,434 4,434
v3.23.1
Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]    
Prepaid insurance $ 341 $ 387
Other 70 89
Total Prepaid Expenses and Other Current Assets $ 411 $ 476
v3.23.1
Balance Sheet Components - Schedule of Other Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]    
Prepaid insurance $ 473 $ 667
Prepaid offering costs   106
Other 13 13
Total Other Assets $ 486 $ 786
v3.23.1
Balance Sheet Components - Components of Accrued Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]    
Accrued legal and professional fees $ 643 $ 75
Accrued compensation 890 681
Accrued manufacturing and clinical expenses 485 40
Accrued other expenses 8 16
Total Accrued Liabilities $ 2,026 $ 812
v3.23.1
Merger - Additional Information (Details) - shares
Dec. 31, 2022
Dec. 31, 2021
Business Acquisition [Line Items]    
Common stock, shares outstanding 21,000,069 14,754,447
Vested restricted stock awards outstanding 2,363,195  
v3.23.1
Commitments and Contingencies - Additional Information (Details) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Commitments And Contingencies [Line Items]    
FDIC insured amount $ 250,000  
Royalty expenses 25,000 $ 100,000
Rent credit due to refund for operating expense   9,000
Rent expenses 19,000 $ 5,000
Contractual obligation $ 2,300,000  
v3.23.1
Equity - Additional Information (Details)
6 Months Ended 12 Months Ended
Aug. 12, 2022
USD ($)
Jul. 11, 2022
Right
$ / shares
shares
Apr. 01, 2022
USD ($)
Mar. 31, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
$ / shares
shares
Jun. 16, 2020
$ / shares
shares
Jun. 15, 2020
$ / shares
shares
Class Of Stock [Line Items]                  
Gross proceeds from issuance of common stock | $           $ 7,229,000      
New issuance of common stock | $           7,122,000      
Dividend payable, date of record   Jul. 21, 2022              
Rights Agreement                  
Class Of Stock [Line Items]                  
Percentage of beneficial ownership acquired by a person or group of affiliated or associated persons   10.00%              
Percentage of ownership by a person or group upon announcement of tender or exchange offer   10.00%              
Percentage of beneficial ownership acquired by an acquiring person after public announcement   10.00%              
At The Market Equity Offering Program                  
Class Of Stock [Line Items]                  
Gross proceeds from issuance of common stock | $       $ 25,000,000.0          
Percentage of sales commission       3.00%          
At The Market Equity Offering Program | Maximum                  
Class Of Stock [Line Items]                  
Gross proceeds from issuance of common stock | $     $ 7,000,000.0            
New issuance of common stock | $ $ 2,700,000                
Shelf Registration | Maximum                  
Class Of Stock [Line Items]                  
Additional capital raised | $           $ 300,000,000      
Common Stock                  
Class Of Stock [Line Items]                  
Common stock issued, shares | shares           6,142,158      
New issuance of common stock | $           $ 6,000      
Warrants to purchase common stock | shares               4,434  
Common stock exercise price | $ / shares               $ 140.25  
Warrants expiration date               Oct. 30, 2025  
Dividend distribution, number of right for each share | Right   1              
Common Stock | At The Market Equity Offering Program                  
Class Of Stock [Line Items]                  
Common stock issued, shares | shares         6,100,000        
Gross proceeds from issuance of common stock | $         $ 7,700,000        
Offering costs | $         $ 595,000        
Common Stock | Concurrent Financing Warrants                  
Class Of Stock [Line Items]                  
Common stock issued, shares | shares             1,889,274    
Warrants to purchase common stock | shares                 2,752,546
Common stock exercise price | $ / shares                 $ 10.56
Warrants outstanding | shares         0 0      
Series A Participating Preferred Stock                  
Class Of Stock [Line Items]                  
Preferred stock per share | $ / shares   $ 0.001              
Common stock exercise price | $ / shares   $ 16.00              
Dividend distribution, each right entitled to purchase shares | shares   0.001              
Series A Preferred Stock                  
Class Of Stock [Line Items]                  
Preferred stock authorized, shares | shares         10,000,000 10,000,000 10,000,000    
Preferred stock per share | $ / shares         $ 0.001 $ 0.001 $ 0.001    
Preferred stock outstanding, shares | shares         0 0 0    
v3.23.1
Stock-Based Compensation - Additional Information (Details) - USD ($)
1 Months Ended 12 Months Ended
May 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Jun. 30, 2022
Jul. 26, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Closing stock price   $ 1.00      
Stock-based compensation expense   $ 4,015,000 $ 4,214,000    
Unrecognized compensation expense   $ 6,200,000      
Weighted-average period over which unrecognized compensation expense is expected to be recognized   2 years 1 month 24 days      
Employees          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Weighted average grant-date fair value of stock options granted   $ 0.91 $ 21.89    
Non-employees          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Weighted average grant-date fair value of stock options granted   $ 0.91 $ 21.89    
Restricted Stock Units (RSUs)          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Stock awards granted   0      
Unrecognized compensation expense   $ 158,000,000      
Performance Based Restricted Stock Units          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Stock-based compensation expense   252,000      
Performance Stock Options and Restricted Stock Awards          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Unrecognized compensation expense   $ 233,000      
2020 Inducement Equity Incentive Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Shares reserved for future grant         500,000
Shares available for issuance   115,000      
2021 Equity Incentive Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Service-based awards, vesting period 4 years        
Service-based awards vesting description   vested over a four-year period, with the first 25% of such awards vesting following twelve months of continued employment or service with the remaining awards vesting monthly in equal installments over the following thirty-six months      
Shares available for issuance 1,000,000 1,337,277      
Additional shares available for grant       1,500,000  
2021 Equity Incentive Plan | Board of Directors          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Service-based awards, vesting period 3 years 12 months      
Service-based awards vesting description   vesting occurs in thirty-six equal monthly installments over a three-year period for initial grants and in twelve equal monthly installments over a twelve-month period for subsequent grants      
2017 Employee Stock Purchase Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Stock-based compensation expense   $ 3,000 $ 25,000    
Eligible employees withhold percentage of earnings to purchase shares of common stock 15.00%        
Shares available for future issuance   318,522      
Shares reserved for issuance increase percentage of total number of shares of common stock outstanding 1.00%        
Shares Issued under plan   5,716      
2017 Employee Stock Purchase Plan | Maximum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of shares of common stock reserved for issuance increase on of each calendar year 300,000        
2017 Employee Stock Purchase Plan | On First Date of Offering | Maximum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Percentage of fair market value of share of common stock to purchase 85.00%        
2017 Employee Stock Purchase Plan | On Date of Purchase | Maximum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Percentage of fair market value of share of common stock to purchase 85.00%        
Following Twelve Months of Service | 2021 Equity Incentive Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Service-based awards vesting percentage 25.00%        
v3.23.1
Stock-Based Compensation - Summary of Weighted-Average Assumptions Used to Value Stock Options (Details) - $ / shares
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Fair value of common stock and exercise price $ 1.47 $ 35.78
Risk-free interest rate 2.31% 0.94%
Dividend yield 0.00% 0.00%
Expected term of options (years) 5 years 10 months 17 days 5 years 11 months 12 days
Volatility 68.75% 69.02%
ESPP    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Fair value of common stock and exercise price $ 1.32 $ 34.97
Risk-free interest rate 2.52% 0.05%
Dividend yield 0.00% 0.00%
Expected term of options (years) 6 months 3 days 6 months 3 days
Volatility 76.71% 64.08%
v3.23.1
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Number of Shares Outstanding    
Outstanding, Beginning 1,281,396  
Granted 1,199,166  
Exercised (1,098)  
Cancelled/Forfeited (116,269)  
Outstanding, Ending 2,363,195 1,281,396
Vested and expected to vest 2,363,195  
Exercisable 546,916  
Weighted-Average Exercise Price    
Outstanding, Beginning $ 18.18  
Granted 1.47 $ 35.78
Exercised 1.06  
Cancelled/Forfeited 26.78  
Outstanding, Ending 9.29 $ 18.18
Vested and expected to vest 9.29  
Exercisable $ 19.97  
Weighted-Average Remaining Contractual Term (Years)    
Outstanding 8 years 2 months 19 days 7 years 11 months 8 days
Vested and expected to vest 8 years 2 months 19 days  
Exercisable 8 years 18 days  
Aggregate Intrinsic Value    
Outstanding $ 65 $ 617
Vested and expected to vest 65  
Exercisable $ 6  
v3.23.1
Stock-Based Compensation - Summary of Restricted Stock Unit Award Transactions (Details) - Restricted Stock Unit Awards
12 Months Ended
Dec. 31, 2022
$ / shares
shares
Shares  
Outstanding at December 31, 2021 258,851
Stock awards granted 0
Issued as Common Stock (96,650)
Outstanding at December 31, 2022 162,201
Weighted Avg Grant Date Fair Value  
Outstanding at December 31, 2021 | $ / shares $ 3.36
Issued as Common Stock 3.36
Outstanding at December 31, 2022 | $ / shares $ 3.36
v3.23.1
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense $ 4,015 $ 4,214
Research and Development    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense 1,270 1,448
General and Administrative    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense $ 2,745 $ 2,766
v3.23.1
Income Taxes - Additional Information (Details) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Line Items]    
Current income tax expense (benefit) $ 0 $ 0
Deferred income tax expense (benefit) 0 0
Increase in deferred tax assets related to capitalized research expenses 978,000  
Valuation allowance increase (decrease), amount $ 2,600,000 3,800,000
Cumulative change in ownership percentage 50.00%  
Period for cumulative change in ownership 3 years  
Net operating loss $ 6,039,000 5,968,000
Accruals interest for uncertain tax position 0 0
Penalties for uncertain tax positions 0 $ 0
Federal    
Income Tax Disclosure [Line Items]    
Net operating loss carryforwards $ 24,900,000  
Net operating loss carryforwards expiration year 2037  
Net operating loss $ 74,200,000  
Deferred tax assets for federal and California research and development credits 36,300,000  
Federal | Research and Development    
Income Tax Disclosure [Line Items]    
Tax credit carryforward $ 268,000  
Tax credit carryforward expiration year 2041  
State    
Income Tax Disclosure [Line Items]    
Net operating loss carryforwards $ 11,600,000  
Net operating loss carryforwards expiration year 2037  
State | Research and Development    
Income Tax Disclosure [Line Items]    
Tax credit carryforward $ 254,000  
v3.23.1
Income Taxes - Summary of Reconciliations of Income Tax (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]    
Income tax expense (benefit) at federal statutory rate $ (2,915) $ (4,558)
Increase/(decrease) in tax resulting from:    
State income taxes (79) 479
Change in valuation allowance 2,628 3,807
Transaction adjustments   281
Stock-based compensation 370 58
Other $ (4) $ (67)
Income tax benefit at federal statutory rate 21.00% 21.00%
Increase/(decrease) in tax resulting from:    
State income taxes 0.60% (2.20%)
Change in valuation allowance (18.90%) (17.50%)
Transaction adjustments 0.00% (1.30%)
Stock-based compensation (2.70%) (0.30%)
Other 0.00% 0.30%
Total 0.00% 0.00%
v3.23.1
Income Taxes - Components of Net Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets:    
Accrual to cash adjustment $ 480 $ 268
Start-up costs 2,949 2,111
Patent costs 40 40
Stock option expense 1,391 944
Net operating loss 6,039 5,968
Capitalized R&D 978  
Other Deferred Taxes 10 10
R&D Credits 328 245
Total noncurrent deferred tax assets 12,215 9,586
Valuation Allowance $ (12,215) $ (9,586)
v3.23.1
Related Party Transactions - Additional Information (Details) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Director    
Related Party Transaction [Line Items]    
Payments for scientific consulting services $ 9,000 $ 1,000
Accounts payable 0 $ 0
Director One    
Related Party Transaction [Line Items]    
Payments for scientific consulting services 7,000  
Accounts payable $ 0