UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from ____ to ____
Commission file number:
(Exact name of Registrant as specified in itscharter)
| 2834 | ||||
| (State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
(Address and telephone number of principal executiveoffices)
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(Former name, former address, and former fiscalyear, if changed since last report)
Indicate by check mark whether the registrant:(1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. ☒
Indicate by check mark whether the registranthas submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrantis 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.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes
Securities registered pursuant to Section 12(b)of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
As of August 14, 2025, there were
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Unicycive Therapeutics, Inc.
Balance Sheets
(In thousands, except for share and per shareamounts)
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2024 | 2025 | |||||||
| Assets | (Unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Right of use asset, net | ||||||||
| Property and equipment, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Warrant liability | ||||||||
| Operating lease liability - current | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability – long term | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 6) | ||||||||
| Stockholders’ equity: | ||||||||
| Series A-2 Prime preferred stock, $ | ||||||||
| Series B-2 preferred stock, $ | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the financial statements
1
Unicycive Therapeutics, Inc.
Statements of Operations
(In thousands, except for share and per shareamounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of warrant liability | ||||||||||||||||
| Total other income (expenses) | ||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Dividend to Series B-1 preferred stockholders | ( | ) | ( | ) | ||||||||||||
| Net income attributable to participating securities | ( | ) | ||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per share attributable to common stockholders, basic | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net loss per share attributable to common stockholders, diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average shares outstanding used in computing net income (loss) per share, basic | ||||||||||||||||
| Weighted-average shares outstanding used in computing net loss per share, diluted | ||||||||||||||||
See accompanying notes to the financial statements
2
Unicycive Therapeutics, Inc.
Statements of Mezzanine Equity and Stockholders’Deficit
(In thousands, except share amounts)
(Unaudited)
| Series B-1 | Series A-2 | Series A-2 Prime | Additional | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Preferred Stock | Preferred Stock | Paid-In | Accumulated | Stockholder’ | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of Series B-1 preferred stock, net of issuance costs | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Dividends on Series B-1 preferred stock | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Exchange of Series A-2 preferred stock for Series A-2 Prime preferred stock | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Conversion of Series A-2 Prime preferred stock into common stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for exercise of options | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Dividends Paid on Series B-1 preferred stock | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Conversion of Series A-2 Prime preferred stock into common stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for exercise of options | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Series A-2 Prime | Series B-2 | Series A-3 | Additional | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Preferred Stock | Preferred Stock | Paid-In | Accumulated | Stockholder’ | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Conversion of Series A-2 Prime preferred stock into common stock | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash, net of issuance costs | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | - | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of Series A-3 preferred stock upon exercise of warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Conversion of Series B-2 preferred stock into common stock | - | ( | ) | - | ||||||||||||||||||||||||||||||||||||||||
| Conversion of Series A-3 preferred stock into common stock | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for vested restricted stock units | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash, net of issuance costs | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||
See accompanying notes to the financial statements
3
Unicycive Therapeutics, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | ||||||||
| Stock-based compensation expense | ||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Amortization of operating lease right of use asset | ||||||||
| Changes in assets and liabilities: | ||||||||
| Prepaid expense and other current assets | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from secondary public offering | ||||||||
| Commissions paid on settlement | ( | ) | ||||||
| Payments on financed insurance policies | ( | ) | ( | ) | ||||
| Issuance costs related to issuance of Series B-1 preferred stock | ( | ) | ||||||
| Proceeds from issuance of Series B-1 preferred stock | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Dividends on preferred stock | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Accrued dividends on preferred stock | $ | $ | ||||||
| Deferred insurance charges included in prepaid expenses and other current assets | $ | $ | ||||||
| Deferred preclinical and other charges included in prepaid expenses and other current assets | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
See accompanying notes to the financial statements
4
Unicycive Therapeutics, Inc.
Notes to the Financial Statements (Unaudited)
1. Organization and Description of Business
Overview
Unicycive Therapeutics, Inc. (“the Company”)was incorporated in the State of Delaware on
The Company in-licensed the drug candidate UNI494 from Sphaera Pharma Pte. Ltd, a Singapore-based corporation, (“Sphaera”) (Note 3). UNI 494 is a pro-drug of Nicorandillthat is being developed as a treatment for acute kidney injury.
In September 2018, the Company purchased a seconddrug candidate, Renazorb RZB 012 and its trademark, RENALAN, and various patents from Spectrum Pharmaceuticals, Inc. (“Spectrum”)(Note 3). Renazorb (“Oxylanthanum Carbonate”) is being developed for the treatment of hyperphosphatemia in patients with ChronicKidney Disease (“CKD”).
The Company continues to evaluate the licensingof additional technologies and drugs, targeting orphan diseases and other renal, liver and other metabolic diseases affecting fibrosisand inflammation.
Liquidity
The Company is subject to risks and uncertaintiescommon to early-stage companies in the biotechnology industry including, but not limited to, development by competitors of new technologicalinnovations, protection of proprietary technology, dependence on key personnel, compliance with governmental regulations and the needto obtain additional financing to fund operations. The Company’s product candidates currently under development will require significantadditional research and development efforts prior to commercialization. Future revenue streams may consist of collaboration or licensingrevenue as well as product sales.
The Company has incurred operating losses andnegative cash flows from operations since inception and expects to continue to incur negative cash flows from operations in the future.As the Company increases its research and development activities, the operating losses are expected to increase. The Company has historicallyrelied on private equity offerings, debt financing and loans from a stockholder to fund its operations. As of December 31, 2024 and June30, 2025, the Company had an accumulated deficit of $
In connection with its initial public offering(“IPO”), on July 13, 2021, the Company began trading on the Nasdaq Capital Market under the symbol “UNCY”, andon July 15, 2021, received approximately $
On March 3, 2023, the Company entered into a securitiespurchase agreement with certain healthcare-focused institutional investors that may provide up to $
On March 13, 2024, the Company entered into asecurities purchase agreement with certain healthcare-focused institutional investors to provide $
5
On November 13, 2024, we entered into a salesagreement, with Guggenheim Securities, LLC pursuant to which, we may offer and sell shares of common stock having an aggregate offeringprice of up to $
The Company expects to continue incurring lossesin the future and will be required to raise additional capital in the future to complete its planned clinical trials, pursue product developmentinitiatives and penetrate markets for the sale of its products. Management believes that the Company will continue to have access to capitalresources through possible equity offerings, debt financings, corporate collaborations or other means. There can be no assurance thatthe Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis or at all. If the Companyis unable to secure additional capital, it may be required to curtail any clinical trials and development of new or existing productsand take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet itsobligations. Based on the Company’s currently anticipated level of expenditures, the Company believes that it has sufficient resourcessuch that there is not substantial doubt about the ability to continue operations for at least one year after the date that these financialstatements are available to be issued.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements and accompanying noteshave been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The accompanying unaudited financial statementsof the Company as of June 30, 2025 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-Xand, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted inthe “GAAP”. The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fairpresentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurringnature) which are, in the opinion of management, necessary to make the information presented not misleading. You should read these financialstatements and the accompanying notes in conjunction with the financial statements and notes thereto included in the Company’s AnnualReport on Form 10-K for the fiscal year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on March 31, 2025.
Use of Estimates
The preparation of financial statements in conformitywith GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities andthe disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses duringthe periods presented. Management believes that these estimates and assumptions are reasonable; however, actual results may differ andcould have a material effect on future results of operations and financial position. Significant items subject to such estimates and assumptionsinclude, stock-based compensation, research contract progress estimates, incremental borrowing rate for leases, useful life for assets,debt and equity transactions, and the valuation of warrant liabilities. Actual results may materially differ from those estimates.
Warrant Liability
In conjunction with the issuance of Series A-1Preferred Stock (see Note 8), the Company established a warrant liability as of March 3, 2023, representing the fair value of warrantsthat may be issued (and have since been issued – see Note 10), subject to shareholder approval, upon conversion of the Series A-1Preferred Stock. The Company accounts for these warrants as liabilities (in accordance with ASC 480, Distinguishing Liabilities fromEquity) on the balance sheets as a result of certain redemption clauses that are not within the control of the Company. The warrantliability was initially measured at fair value and is remeasured at fair value each reporting period. Changes in the fair value of thewarrant liability are recognized in earnings during each period. The warrant liability is measured using Level 3 fair value inputs. SeeNote 10 for a description of warrant liability and the related valuations.
6
Segment Information
The Company reports its segment information toreflect the manner in which the Company’s Chief Operating Decision Maker (“CODM”) reviews and assesses performance.The Company’s Chief Executive Officer has the responsibility as the CODM to review and assess the performance of the Company asa whole.
The primary financial measures used by the CODMto evaluate performance and allocate resources are net (loss) income and operating (loss) income. The CODM uses net income (loss) andoperating (loss) income to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internalplanning and forecasting processes. Information on net (loss) income and operating (loss) income is disclosed in the Statements of Operations.Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Statements of Operations.
The CODM does not evaluate performance or allocateresources based on segment assets, and therefore such information is not presented in the notes to the financial statements.
Risks and Uncertainties
The Company operates in a dynamic and highly competitiveindustry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financialposition, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industrystandards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of saleschannels; certain strategic relationships; litigation or claims against the Company related to intellectual property, product, regulatory,or other matters; and the Company’s ability to attract and retain employees necessary to support its growth.
The Company’s general business strategymay be adversely affected by any such economic, volatile business environments and continued unstable or unpredictable economic and marketconditions.
Any product candidates developed by the Companywill require approvals from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance thatthe Company’s current product candidates or any future product candidates will receive the necessary approvals. If the Company isdenied approval, approval is delayed or the Company is unable to maintain approval, it could have a materially adverse impact on the Company.
The Company has expended and will continue toexpend substantial funds to complete the research, development and clinical testing of its product candidates. The Company also will berequired to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distributionof products that receive regulatory approval. The Company will require additional funds to commercialize its products. The Company isunable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operationsor additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or developmentprograms, which would materially and adversely affect its business, financial condition and operations.
The Company is dependent upon the services ofits employees, consultants and other third parties.
Property and Equipment
Property and equipment are recorded at cost lessaccumulated depreciation. Additions, improvements, and major renewals or replacements that substantially extend the useful life of anasset are capitalized. Repairs and maintenance expenditures are expensed as incurred. Depreciation is computed using the straight-linemethod over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are amortizedon a straight-line basis over the shorter of their estimated useful lives or the remaining lease term.
Management assesses the carrying value of propertyand equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indicationof impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition.If these cash flows are less than the carrying amount of the asset, an impairment charge is recognizedin the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. During the six months endedJune 30, 2024 and 2025, management determined there were no impairments of the Company’s property and equipment.
7
Leases
The Company determines whether a contract is,or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the leaseterm, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company recordsthe right-of-use asset at the amount of the lease liability plus any prepaid rent, amounts paid for lessor-owned leasehold improvements,and initial direct costs, less any lease incentives and accrued rent. Lease liabilities are recognized at lease commencement based uponthe estimated present value of unpaid lease payments over the lease term. The right-of-use assets are reviewed for impairment wheneverevents or changes in circumstances exist that indicate the carrying amount may not be recoverable. The Company uses its incremental borrowingrate based on the information available at lease commencement in determining the present value of unpaid lease payments.
Fair Value of Financial Instruments
The Company’s financial instruments includethe warrant liability, cash and cash equivalents, accounts payable and accrued liabilities.
Fair value is defined as the price that wouldbe received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurementdate. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The fair value hierarchycontains the following levels:
| ● | Level 1 — defined as observable inputs based on unadjusted quoted prices for identical instruments in active markets; |
| ● | Level 2 — defined as inputs other than Level 1 that are either directly or indirectly observable in the marketplace for identical or similar instruments in markets that are not active; and |
| ● | Level 3 — defined as unobservable inputs in which little or no market data exists where valuations are derived from techniques in which one or more significant inputs are unobservable. |
The fair value of the warrant liability is determinedusing a Black Scholes model with parameters including (i) the exercise price of the warrants, (ii) the price of the underlying security,(iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate, and (vi)estimated probability assumptions surrounding the achievement by the Company of technical milestones associated with regulatory and commercialprogress.
These valuation techniques involve management’sestimates and judgment based on unobservable inputs and are classified in Level 3. The fair value estimates may not be indicative of theamounts that would be realized in a market exchange. Additionally, there may be inherent uncertainties or changes in the underlying assumptionsused, which could significantly affect the current or future fair value estimates. Generally, a significant increase (decrease) in theprobabilities of shareholder approval and the achievement of technical milestones would have resulted in a significantly higher (lower)fair value measurement; however, changes in other inputs such as expected term and price of the underlying common stock will have a directionallyopposite impact on fair value measurement.
The following table summarizes the fair value hierarchy of financialliabilities measured at fair value as of June 30, 2025 (in thousands):
| Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||
| (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | ||||||||||||
8
The following table summarizes the fair valuehierarchy of financial liabilities measured at fair value as of December 31, 2024 (in thousands):
| Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||
| (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | ||||||||||||
The following table summarizes the changes infair value of the warrant liability classified in Level 3. Gains and losses reported in this table include changes in fair value thatare attributable to unobservable inputs (in thousands):
| Six Months Ended June 30, 2024 | ||||
| Fair value at January 1, 2024 | $ | |||
| Change in fair value of warrants | ||||
| Fair value at March 31, 2024 | ||||
| Change in fair value of warrants | ( | ) | ||
| Fair value at June 30, 2024 | $ | |||
| Six Months Ended June 30, 2025 | ||||
| Fair value at January 1, 2025 | $ | |||
| Change in fair value of warrants | ( | ) | ||
| Fair value at March 31, 2025 | ||||
| Change in fair value of warrants | ( | ) | ||
| Fair value at June 30, 2025 | $ | |||
The expense relating to the change in fair valueof the warrant liability of $
ASC 820, Fair Value Measurement and Disclosuresrequires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicableto estimate fair value. As of December 31, 2024, and June 30, 2025, the recorded values of cash and cash equivalents, accounts payable,and accrued liabilities approximated fair value due to the short-term nature of the instruments. Cash and cash equivalents, accounts payable,and accrued liabilities are Level 1 financial instruments.
Concentration of Credit Risk
Financial instruments that potentially subjectthe Company to concentration of credit risk consist of cash and cash equivalents. The cash and cash equivalents the Company uses to satisfyworking capital and operating expense needs are held in accounts at various financial institutions. Cash balances may at times exceedfederally insured limits. Cash and cash equivalents could be adversely impacted, including the loss of uninsured deposits and other uninsuredfinancial assets, if one or more of the financial institutions in which the Company holds its cash or cash equivalents fails or is subjectto other adverse conditions in the financial or credit markets. No such losses have been incurred through June 30, 2025.
9
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets representcosts incurred that benefit future periods. These costs are amortized over specific time periods based on the agreements.
Research and Development Expenses
Substantially all the Company’s researchand development expenses consist of expenses incurred in connection with the development of the Company’s product candidates. Theseexpenses include fees paid to third parties to conduct certain research and development activities on the Company’s behalf, consultingcosts, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, includingsalaries and bonuses, employee benefit costs and stock-based compensation expenses for the Company’s research and product developmentemployees. The Company expenses both internal and external research and development expenses as incurred.
General and Administrative Expenses
General and administrative expenses representpersonnel costs for employees involved in general corporate functions, including finance, accounting, legal and human resources, amongothers. Additional costs included in general and administrative expenses consist of professional fees for legal (including patent costs),audit and other consulting services, stock-based compensation and other general corporate overhead expenses.
Patent Costs
The Company expenses all costs as incurred inconnection with patent licenses and applications (including direct application fees, and the legal and consulting expenses related tomaking such applications) and such costs are reflected in general and administrative expenses in the statements of operations.
Stock-Based Compensation
The Company accounts for stock-based compensationfor all share-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensationexpense over the requisite service period on a straight-line basis. The Company recognizes forfeitures related to stock-based compensationas they occur. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes modelrequires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, risk-freeinterest rate, and the estimated fair value (prior to the Company’s initial public offering) or the public market closing priceof the Company’s underlying common stock on the date of grant.
Income Taxes
The Company accounts for corporate income taxesin accordance with GAAP as stipulated in ASC740, Income Taxes, (“ASC 740”). This standard entails the use of the asset andliability method of computing the provision for income tax expense. Current tax expense results from corporate tax payable at the Federaland California jurisdictions for the Company, which relates to the current accounting period. Deferred tax expense results primarily fromtemporary differences between financial statement and tax return reporting, which result in additional tax payable in future periods.Deferred tax assets and liabilities are determined based on the differences between the financial statement basis and tax basis of assetsand liabilities using enacted tax rates and law. Net future tax benefits are subject to a valuation allowance when management expectsthat it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
Current and non-current tax assets and liabilitiesare based upon an estimate of taxes refundable or payable for each of the jurisdictions in which the Company is subject to tax. In theordinary course of business there is inherent uncertainty in quantifying income tax positions. The Company assess income tax positionsand record the largest amount of tax benefit with a greater than
The Tax Cuts and Jobs Act of 2017 eliminated theoption to immediately deduct research and development expenditures in the year incurred under Section 174, which became effective January1, 2022. We are monitoring legislation for any further changes to Section 174 and the impact, if any, to the financial statements in 2025.
On July 4, 2025, the “One big BeautifulBill Act (OBBBA) was signed into law. This legislation introduces a number of new changes to the Internal Revenue Code. As the Companydoes not currently generate taxable income, we do not expect the legislation to have a material impact on our tax posture. The Companywill continue to maintain a full valuation allowance against its net deferred tax assets.
Comprehensive Loss
Comprehensive loss includes all changes in equity(net assets) during a period from non-owner sources. There were no elements of other comprehensive income (loss) in the periods presented,as a result comprehensive loss is the same as net loss for each period presented.
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Net Income (Loss) per Share
Basic and diluted net income (loss) per shareis presented in conformity with the two-class method required for participating securities. Basic and diluted net income (loss)for common stock and for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each classof stock by the weighted average number of shares outstanding for each class of stock for the period. Diluted net income (loss) per shareincludes potentially dilutive securities outstanding for the period. See Note 12 for reconciliations of basic and diluted net income (loss)per share.
Recent Accounting Pronouncements
From time to time, new accounting pronouncementsare issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Companyas of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective arenot expected to have a material impact on the Company’s financial position or results of operations upon adoption.
Income Taxes Disclosures – In December 2023,the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requiresdisaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. TheCompany is currently evaluating the impact of this guidance on its consolidated financial statements.
Accounting pronouncements pending adoption
On November 4, 2024, the FASB issued ASU No. 2024-03,Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income to expand income statementexpense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses.ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Companyis currently evaluating the impact of adopting the standard on its financial statements.
3. Significant Agreements
With regards to manufacturing, testing and potentialcommercial supply of Oxylanthanum Carbonate, on October 31, 2020, the Company entered into an agreement with Shilpa Medicare Ltd (“Shilpa”)based in India. Pursuant to the Agreement, Shilpa provides certain development, manufacturing, supply and other CMC-related services relatedto the development and commercialization of Oxylanthanum Carbonate (“OLC”).
In June 2024, the Company entered into the First Amendment to Manufacturingand Supply Agreement with Shilpa (the “Amendment”) in anticipation of an increased manufacturing demand for OLC. Pursuantto the Amendment, the Company has agreed to make a binding purchase order for tablets of OLC and Shilpa has agreed to deliver such orderby September 30, 2025. In addition, the Company has agreed to order additional tablets for delivery between December 31, 2025, and September30, 2026. Further, the Company has agreed to make certain milestone payments and to provide certain funding to Shilpa for a new manufacturingline. The initial term of the Agreement shall continue until the eighth (8th) anniversary of the date of receipt by the Company of FDAapproval of its NDA of OLC (the “Initial Term”). Following the Initial Term, the Agreement shall continue in effect for consecutiveperiods of four (4) years each unless earlier terminated pursuant to the terms of the Agreement.
In October 2017, the Company entered into an exclusivelicense agreement with Sphaera, a stockholder, for the rights to further develop the drug candidate, UNI 494, for commercialization. Nopayments were made upon execution of the agreement but payments for $
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In September 2018, the Company entered into anAssignment and Asset Purchase Agreement with Spectrum Pharmaceuticals, Inc. (“Spectrum Agreement”) pursuant to which the Companypurchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to RenazorbRZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together withRenalan, the “Compounds”), to further develop and commercialize Oxylanthanum Carbonate and related compounds. In partial considerationfor the Spectrum Agreement, the Company issued
On January 6, 2022, the Company entered into aMaster Services Agreement with Quotient Sciences Limited (“Quotient”), a UK based company that provides drug development andanalysis services, for the purpose of performing clinical research in support of UNI-494. The initial budget for the study is approximately$
On April 10, 2023, the Company entered into anagreement with Inotiv that provides preclinical trial and related services, for the purpose of performing research in support of UNI-494.The budget for these services is approximately $
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On July 14, 2022, the Company entered into a licenseagreement with Lee’s Pharmaceutical (HK) Limited . Under the terms of the agreement, Lee’s Pharmaceutical will be responsiblefor development, registration filing and approval for Oxylanthanum Carbonate in China, Hong Kong, and certain other Asian markets. Inaddition, Lee’s Pharmaceutical will have sole responsibility for the importation of the drug product from the Company and for thecosts of commercialization of Oxylanthanum Carbonate in the licensed territories. The Company has received an upfront payment of $
On February 1, 2023, the Company entered intoa license agreement with Lotus International Pte Ltd. (“Lotus”). Under the terms of the agreement, Lotus will be responsiblefor development, registration filing and approval for Oxylanthanum Carbonate in the licensed territory of South Korea. In addition, Lotuswill have sole responsibility for the importation of the drug product from the Company and for the costs of commercialization of OxylanthanumCarbonate in the licensed territory. The Company has received an upfront payment of $
On June 29, 2023 and October 26, 2023, the Companyentered into services agreements with Shilpa Medicare Ltd related to NDA filing support for Oxylanthanum Carbonate. The agreements providefor total payments of up to $
4. Balance Sheet Components
Prepaid expenses and other current assets as ofDecember 31, 2024 and June 30, 2025 consisted of the following (in thousands):
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2024 | 2025 | |||||||
| Prepaid directors’ and officers’ liability insurance premiums | $ | $ | ||||||
| Prepaid preclinical services | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Property and equipment as of December 31, 2024 and June 30, 2025 consistedof the following (in thousands):
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2024 | 2025 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Lab equipment | ||||||||
| Furniture and fixtures | ||||||||
| Subtotal | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Net | $ | $ | ||||||
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Accounts payable as of December 31, 2024 and June30, 2025 consisted of the following (in thousands):
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2024 | 2025 | |||||||
| Trade accounts payable | $ | $ | ||||||
| Credit card liability | ||||||||
| Total | $ | $ | ||||||
Accrued liabilities as of December 31, 2024 andJune 30, 2025 consisted of the following (in thousands):
| As of | As of | |||||||
| December 31, | June 30, | |||||||
| 2024 | 2025 | |||||||
| Accrued labor costs | $ | | $ | |||||
| Accrued drug development costs | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
5. Operating Lease
The Company leases office space under an operatinglease. In December 2021, the Company entered into a lease agreement for
The lease amendment represents a modificationof the original lease, and the Company evaluated the new agreement under ASC 842, Leases. The Company classified the lease as an operatinglease and, on July 15, 2024, determined that the present value of the lease was approximately $
During the six months ended June 30, 2024 andJune 30, 2025, the Company made cash payments on the lease of $
As of June 30, 2025, maturities of the Company’slease liabilities are as follows (in thousands, unaudited):
| Operating Lease | ||||
| Year ending December 31, 2025 | $ | |||
| Year ending December 31, 2026 | ||||
| Total lease payments | ||||
| Less imputed interest rate / present value discount | ( | ) | ||
| Present value of lease liability | ||||
| Less current portion | ( | ) | ||
| Long term portion | $ | |||
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6. Commitments and Contingencies
Contingencies
The Company is subject to claims and legal proceedingsthat arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome ofany such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effectupon the Company’s financial statements. The Company currently has no pending claims or legal proceedings.
Indemnification
In the normal course of business, the Companyenters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications,including for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectualproperty infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generallyperpetual any time after the execution of the agreement. The Company’s exposure under these agreements is unknown because it involvesclaims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claimsor been required to defend any action related to its indemnification obligations.
The Company believes that the likelihood of conditionsarising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under suchindemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. However, the Companymay record charges in the future as a result of these indemnification obligations.
Additionally, the Company has agreed to indemnifyits directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’srequest in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’sservice.
Employee Benefit Plan
In December 2021, the Company implemented a 401(k)Plan which covers all eligible employees of the Company (the “401(k) Plan”). Employer matching contributions are immediately
7. Stockholders’ Equity (Deficit)
Authorized Common Stock
The Company is authorized to issue up to
Reverse Stock Split
On June 18, 2025, the Company filed the CharterAmendment with the Secretary of State of the State of Delaware to effectuate a reverse stock split. The Company’s common stock begantrading on a split-adjusted basis at the opening of trading on the Nasdaq Capital Market on June 20, 2025. When the reverse stock splitbecame effective, every 10 shares of common stock were automatically reclassified and combined into one share of common stock. No fractionalshares were issued as a result of the split. Stockholders who would otherwise be entitled to receive a fractional share will instead automaticallyhave their fractional interests rounded up to the next whole share, after aggregating all the fractional interests of a holder resultingfrom the split. The split affects all stockholders uniformly and will not change any stockholder’s percentage ownership interestor any stockholder’s proportionate voting power, except for immaterial changes that may result from the treatment of fractionalshares. The split did not change the number of authorized shares of common stock or the par value per share of the common stock.
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As a result of the reverse stock split, proportionateadjustments were made to the per share exercise prices of, and the number of shares underlying, the Company’s outstanding stockoptions, as well as to the number of shares available for future awards granted under the Company’s stock incentive plans. In addition,proportionate adjustments were made to the per share exercise prices of, and the number of shares underlying, outstanding warrants topurchase shares of the Company’s common stock. Further, a proportionate adjustment was made to the per share conversion price ofthe Company’s series A-2 prime preferred stock, pursuant to its terms. All share and per share data in the accompanying financialstatements have been retroactively adjusted to reflect the effect of the reverse stock split.
Issuance of Common Stock and Warrants fromInitial Public Offering
During July 2021, as a result of its initial publicoffering, the Company issued
As a result of the initial public offering, theCompany’s outstanding convertible notes and unpaid accrued interest were converted into
The warrants from the initial public offeringare equity classified. The following table summarizes activity for the Company’s IPO warrants for the six months ended June 30,2025:
| Weighted- | ||||||||||||||||
| Number of | Average | |||||||||||||||
| Shares | Weighted- | Remaining | Aggregate | |||||||||||||
| Underlying | Average | Contractual | Intrinsic | |||||||||||||
| Outstanding | Exercise | Term | Value | |||||||||||||
| Warrants | Price | (in Years) | (in thousands) | |||||||||||||
| Outstanding, December 31, 2024 | ||||||||||||||||
| Warrants granted | ||||||||||||||||
| Warrants exercised | ||||||||||||||||
| Outstanding, June 30, 2025 | ||||||||||||||||
See Note 10 for information on preferred stockwarrants associated with our sale in March 2023 of Series A-1 Preferred Stock.
Issuance of Common Stock Upon Conversion of Series A and SeriesB Preferred Stock
On June 26, 2023, the Company held its annualshareholder meeting and, as a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 PreferredStock was obtained (see Notes 8 and 9). On July 11, 2023, pursuant to the Certificate of Designation of Preferences, Rights and Limitationsof the Series A Convertible Voting Preferred Stock (the “Series A Certificate of Designation”), the Company issued a totalof
On March 26, 2024, the Company issued
On June 20, 2024, we held our annual stockholdermeeting, and as a result, stockholder approval for the conversion of the Series B-1 Convertible Preferred Stock was obtained (see Note9). On July 5, 2024, pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible PreferredStock, the Company issued
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On June 25, 2024, the Company issued
On July 23, 2024, the Company issued
On July 25, 2024, the Company issued
On July 29, 2024, the Company issued
On August 14, 2024, the Company issued
On October 9, 2024, the Company issued
On October 31, 2024, the Company issued
On December 11, 2024, the Company issued
On December 18, 2024, the Company issued
On December 19, 2024, the Company issued
On February 18, 2025, the Company issued
Voting Rights of Common Stock
Each holder of shares of common stock shall beentitled to one vote for each share thereof held.
Note 8. Issuance of Series A-1 Preferred Stock
On March 3, 2023, the Company issued and sold,in a private placement,
Pursuant to the Series A Certificate of Designation,as of March 3, 2023, each share of Series A-1 Preferred Stock was, subject to approval of the Company’s stockholders, convertibleinto a unit (“Unit”) consisting of: (i) shares of common stock of the Company and, if applicable, shares of Series A-2 PreferredStock, in lieu of common stock, (ii) a tranche A warrant to acquire approximately
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The Company had designated
The Company determined that the Warrants are freestandingfrom the Series A-1 Preferred Stock, because the stock will automatically convert into shares of common stock, and the holders will beable to sell those shares while retaining the Warrants. The Company noted that at contract inception, the Warrants were contingently issuableupon the occurrence of a specified event (shareholder approval).
In connection with the Series A-1 Preferred Stockissuance, the Company recognized liabilities for the associated Warrants, which had an aggregate fair value of $
On June 26, 2023, the Company held its annualshareholder meeting and, as a result, shareholder approval for the conversion of the Series A-1 Preferred Stock was obtained. On July11, 2023, pursuant to the Series A Certificate of Designation, the Company issued
The Series A-2, A-3, A-4, and A-5 Preferred Stockhave the following rights:
Dividends: While shares of Series A PreferredStock are issued and outstanding, holders of Series A Preferred Stock shall be entitled to receive, and the Corporation shall pay, dividendson shares of Series A Preferred Stock equal (on an as-if-converted-to-common-stock basis) and in the same form as dividends(other thandividends in the form of common stock) actually paid on shares of the common stock when, as and if such dividends are paid on shares ofthe common stock.
Voting: Holders of the Series A-2, A-3,A-4, and A-5 Preferred Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis as determinedby dividing the liquidation preference with respect to such shares of Preferred Stock by the conversion price. Holders of common stockare entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Accordingly, holdersof Series A Preferred Stock will be entitled to one vote for each whole share of common stock into which their Series A Preferred Stockis then-convertible on all matters submitted to a vote of stockholders.
At the option of the holder thereof, as of the date of the issuanceof the Series A-1 Preferred on March 3, 2023, each share of Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 PreferredStock, or Series A-5 Preferred Stock shall be convertible into one share of common stock.
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Exchange Agreement
On March 13, 2024, the Company entered intoan exchange agreement (the “Exchange Agreement”) with certain accredited investors (the “Investors”), pursuantto which the Investors surrendered all shares of Series A-2 Preferred Stock held by them in exchange for an aggregate of
Concurrent with execution of the Exchange Agreement,but prior to filing of the Amended Series A Certificate of Designation with the Delaware Secretary of State, the Company filed Certificatesof Elimination for each of its Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 PreferredStock and Series A-5 Preferred Stock (collectively, the “Certificates of Elimination”) with the Delaware Secretary of State.
Concurrent with the execution of the ExchangeAgreement, the Company and each Investor have amended and restated the following warrants: (i) tranche A warrants to acquire an aggregateof
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Pursuant to the terms of the Exchange Agreement,effective March 13, 2024, the Company filed the Amended Certificate of Designation with the Delaware Secretary of State designating,
Dividends. At all times followingthe Issuance Date, while shares of Series A Preferred Stock are issued and outstanding, holders of Series A Preferred Stock shall be entitledto receive, and the Company shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-common-stockbasis and without regard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends (other thandividends in the form of common stock, which shall be made in accordance with the terms of the Amended Certificate of Designation) actuallypaid on shares of the common stock when, as and if such dividends (other than dividends in the form of common stock, which shall be madein accordance with the terms of the Amended Certificate of Designation) are paid on shares of the common stock.
Voting Rights. Subject to certainlimitations described in the Amended Certificate of Designation, the Series A Preferred Stock is voting stock. Holders of the Series APreferred Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis. Holders of common stockare entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Accordingly, holdersof Series A Preferred Stock will be entitled to one vote for each whole share of common stock into which their Series A Preferred Stockis then-convertible on all matters submitted to a vote of stockholders.
Liquidation. Upon any Liquidation, theassets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series APreferred Stock and common stock, pro rata based on the number of shares held by each such holder, treating for this purpose all sharesof Series A Preferred Stock as if they had been converted to common stock pursuant to the terms of the Amended Certificate of Designationimmediately prior to such Liquidation, without regard to any limitations on conversion set forth in the Amended Certificate of Designationor otherwise.
Conversion. Subject to the limitations setforth in the Amended Certificate of Designation, at the option of the holder, each share of Series A-2 Prime Preferred Stock, Series A-3Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock shall be convertible intoa number shares of common stock obtained by dividing the Original Per Share Price ($
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Note 9. Issuance of Series B-1 Preferred Stockand Series B-2 Preferred Stock
On March 13, 2024, the Company signed a securitiespurchase agreement with certain healthcare-focused institutional investors that provided $
Pursuant to the Certificate of Designation ofPreferences, Rights and Limitations of the Series B Convertible Preferred Stock filed with the Delaware Secretary of State on March 14,2024, as corrected by the Certificate of Correction to Series B Certificate of Designation filed with the Delaware Secretary of Stateon November 8, 2024 (the “Series B Certificate of Designation”), each share of Series B-1 Preferred Stock is, subject to approvalof the Company’s stockholders, convertible into shares of common stock of the Company and, if applicable, shares of Series B-2 ConvertiblePreferred Stock (the “Series B-2 Preferred Stock”), in lieu of common stock.
The Company has designated
On June 20, 2024, The Company held its annualstockholder meeting, and as a result, stockholder approval for the conversion of the Series B-1 Convertible Preferred Stock was obtained(“Stockholder Approval”). On July 5, 2024, pursuant to the Certificate of Designation of Preferences, Rights and Limitationsof the Series B Convertible Preferred Stock, the Company issued
The Series B-1 Preferred Stock had the followingrights:
Dividends: Prior to receiving StockholderApproval, dividends accrued, on all issued and outstanding shares of Series B-1 Preferred Stock, prior to and in preference to all othershares of capital stock of the Company, at an annual rate of eight percent (
At all times following the Issuance Date, whileshares of Series B-1 Preferred Stock are issued and outstanding, holders of Series B Preferred Stock shall be entitled to receive, andthe Company shall pay, dividends on shares of Series B-1 Preferred Stock equal (on an as-if-converted-to-Common-Stock basis and withoutregard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends (other than dividends in theform of common stock, which shall be made in accordance with the terms of the Series B Certificate of Designation) actually paid on sharesof the common stock when, as and if such dividends (other than dividends in the form of common stock, which shall be made in accordancewith the terms of the Series B Certificate of Designation) are paid on shares of the common stock. Stockholder approval was received onJune 20, 2024.
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Voting: Subject to certain limitationsdescribed in the Series B Certificate of Designation holders of the Series B-1 Preferred Stock are entitled to vote together with thecommon stock on an as-if-converted-to-common-stock basis as determined by dividing the liquidation preference with respect to such sharesof Series B-1 Preferred Stock by the conversion price. Holders of common stock are entitled to
On the tenth trading day following the announcementof the Stockholder Approval, each share of Series B-1 Preferred Stock automatically converted into a unit consisting of: (1) the numberof shares of common stock equal to the quotient of (A) the liquidation preference with respect to such share of Series B-1 Preferred Stock,divided by (B) the conversion price, provided that, to the extent the share conversion would cause such Holder’s beneficial ownershipto exceed
Liquidation Preference: The Series B-1Preferred Stock had a liquidation preference of one-times the original per share price of $
The Series B-2 Preferred Stock has the followingrights:
Dividends: Following the Issuance Date,while shares of Series B Preferred Stock are issued and outstanding, holders of Series B Preferred Stock shall be entitled to receive,and the Corporation shall pay, dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-common-stock basis andwithout regard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends (other than dividendsin the form of common stock, which shall be made in accordance with Section 7(a)) actually paid on shares of the common stock when, asand if such dividends (other than dividends in the form of common stock, which shall be made in accordance with Section 7(a)) are paidon shares of the common stock.
Voting: Subject to certain limitationsdescribed in the Series B Certificate of Designation, the Series B-2 Preferred Stock is voting stock. Holders of the SeriesB-2 PreferredStock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis. Holders of common stock are entitledto
Liquidation: Upon any Liquidation, theassets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series BPreferred Stock and common stock, pro rata based on the number of shares held by each such holder, treating for this purpose all sharesof Series B preferred Stock as if they had been converted to common stock pursuant to the terms of the Certificate of Designation immediatelyprior to such Liquidation, without regard to any limitations on conversion set forth in the Series B Certificate of Designation or otherwise.
Conversion: Subject to the limitationsset forth in the Series B Certificate of Designation, at the option of the holder thereof, each share of Series B-2 Preferred Stock, isconvertible into the number of shares of common stock equal to the quotient of (A) the stated value ($
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10. Warrant Liability
In connection with the Series A Preferred Stock Offering (see Note8), the Company issued the Warrants.
After the Warrants were legally issued as a resultof the automatic conversion of the Series A-1 Preferred Stock upon shareholder approval, they became immediately exercisable at the optionof the holder. The Company determined that the Warrants, while initially contingently issuable, qualified as derivative instruments pursuantto ASC 815-40, Contracts in an Entity’s Own Equity and that the Warrants were considered issued for accounting purposes concurrentlywith the Series A-1 Preferred Stock.
On June 26, 2023, the Company held its annualshareholder meeting, and as a result, shareholder approval for the conversion of the Series A-1 Preferred Stock was obtained. On July11, 2023, pursuant to the Series A Certificate of Designation, the Company issued, in addition to common stock and Series A-2 PreferredStock, (i) a Tranche A Warrant to acquire
In March 2024, the Company entered into an exchangeagreement with certain accredited investors, pursuant to which the accredited investors surrendered all shares of Series A-2 PreferredStock held by them in exchange for shares of new preferred stock to be known as Series A-2 Prime Preferred Stock having rights set forthin the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting PreferredStock. (See Note 8)
The Warrants are recognized as liabilities inthe balance sheets and were initially recognized at fair value at the time of issuance. The Warrants are also subject to remeasurementat each balance sheet date after issuance. Any change in fair value is recognized as a component of other income (expenses) in the statementsof operations in the period of change.
The valuation of the Warrants contains unobservableinputs that reflect the Company’s own assumptions for which there is little market data. Accordingly, the Warrants are measuredat fair value on a recurring basis using unobservable inputs and are classified as Level 3 inputs. The significant unobservable inputsused in the fair value measurement of the Company’s Warrants include, but are not limited to, probability of obtaining certain shareholderapprovals, probability of reaching certain technical milestones related to the development of Oxylanthanum Carbonate, and the estimatedterm of the Warrants. Significant increases (decreases) in any of those inputs in isolation would result in a significantly higher (lower)fair value measurement. Generally, a change in the assumption used for the probability of obtaining certain shareholder approvals is notcorrelated to a change in the probability of reaching certain technical milestones. However, a change to the assumption used for the probabilityof obtaining certain shareholder approvals or a change in the probability of reaching certain technical milestones would have been accompaniedby a directionally opposite change and a directionally similar change, respectively, in the assumption used for the estimated term.
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The fair value of the Warrants associated withthe Company’s March 2023 private placement transaction was determined as of March 3, 2023, and March 31, 2023, by using a MonteCarlo simulation technique (“MCS”) to value the embedded derivatives associated with the Warrants. The MCS methodology calculatesthe theoretical value of a warrant based on certain parameters, including: (i) the threshold of exercising the warrant, (ii) the priceof the underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v)the risk-free rate, (vi) the number of paths, (vii) estimated probability assumptions surrounding shareholder approval as well as theachievement by the Company of technical milestones associated with regulatory and commercial progress, and (viii) an estimated discountfor lack of marketability.
The MCS valuation model was used for the valuationperformed as of the transaction inception on March 3, 2023, and on March 31, 2023, due to uncertainty in the timing of shareholder approvaland the potential variability in the Warrant exercise price. On June 26, 2023, the Company held its annual shareholder meeting, and asa result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred Stock was obtained andthe exercise price for the Warrants became fixed. Therefore, as of December 31, 2024 and June 30, 2025, the fair value of the Warrantswas determined using a Black Scholes model using parameters including (i) the exercise price of the warrant, (ii) the price of the underlyingsecurity, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate,and (vi) estimated probability assumptions surrounding the achievement by the Company of technical milestones associated with regulatoryand commercial progress.
These valuation techniques involve management’sestimates and judgment based on unobservable inputs and are classified in Level 3. The fair value estimates may not be indicative of theamounts that would be realized in a market exchange. Additionally, there may be inherent uncertainties or changes in the underlying assumptionsused, which could significantly affect the current or future fair value estimates. Generally, a significant increase (decrease) in theprobabilities of shareholder approval and the achievement of technical milestones would have resulted in a significantly higher (lower)fair value measurement; however, changes in other inputs such as expected term and price of the underlying common stock will have a directionallyopposite impact on fair value measurement.
The Company uses a third-party valuation expertto assist in the determination of the fair value of the Warrants.
| Tranche A Warrant | At December 31, 2024 | At June 30, 2025 | ||||||
| Fair value of underlying stock | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Volatility | % | % | ||||||
| Risk free rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Term (in years) | ||||||||
| Discount for lack of marketability | % | % | ||||||
| Probability for FDA approval | % | % | ||||||
| Tranche B Warrant | At December 31, 2024 | At June 30, 2025 | ||||||
| Fair value of underlying stock | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Volatility | % | % | ||||||
| Risk free rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Term (in years) | ||||||||
| Discount for lack of marketability | % | % | ||||||
| Probability for FDA approval | % | % | ||||||
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| Tranche C Warrant | At December 31, 2024 | At June 30, 2025 | ||||||
| Fair value of underlying stock | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Volatility | % | % | ||||||
| Risk free rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Term (in years) | ||||||||
| Discount for lack of marketability | % | % | ||||||
| Probability for FDA approval | % | % | ||||||
As of the issuance date (March 3, 2023), the Companyestimated the fair value of the Warrants to be $
The following table summarizes activity, on anas-converted to common shares basis, for the Company’s preferred stock warrants for the six months ended June 30, 2025:
| Weighted- | ||||||||||||||||
| Number of | Average | |||||||||||||||
| Shares | Weighted- | Remaining | Aggregate | |||||||||||||
| Underlying | Average | Contractual | Intrinsic | |||||||||||||
| Outstanding | Exercise | Term | Value | |||||||||||||
| Warrants | Price | (in Years) | (in thousands) | |||||||||||||
| Outstanding, December 31, 2024 | $ | $ | ||||||||||||||
| Warrants contingently issuable | ||||||||||||||||
| Warrants exercised | ( | ) | ||||||||||||||
| Outstanding, June 30, 2025 | $ | $ | ||||||||||||||
11. Stock-based Compensation
On July 15, 2021, in connection with the completionof the Company’s IPO, the Company adopted a new comprehensive equity incentive plan, the 2021 Omnibus Equity Incentive Plan (the“2021 Plan”). Following the effective date of the 2021 Plan, no further awards may be issued under the 2018 Plan or the 2019Plan (collectively, the “Prior Plans”). However, all awards under the Prior Plans that are outstanding as of the effectivedate of the 2021 Plan will continue to be governed by the terms, conditions and procedures set forth in the Prior Plans and any applicableaward agreements. A total of
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The following table summarizes activity for stockoptions under all plans for the six months ended June 30, 2025:
| Weighted- | ||||||||||||||||
| Number of | Average | |||||||||||||||
| Shares | Weighted- | Remaining | Aggregate | |||||||||||||
| Underlying | Average | Contractual | Intrinsic | |||||||||||||
| Outstanding | Exercise | Term | Value | |||||||||||||
| Options | Price | (in Years) | (in thousands) | |||||||||||||
| Outstanding, December 31, 2024 | $ | $ | ||||||||||||||
| Options granted | $ | $ | ||||||||||||||
| Options forfeited | ( | ) | $ | $ | ||||||||||||
| Options exercised | $ | $ | ||||||||||||||
| Outstanding, June 30, 2025 | $ | $ | ||||||||||||||
| Options vested and exercisable as of June 30, 2025 | $ | $ | ||||||||||||||
The grant date fair value of options granted during the six monthsended June 30, 2025, was approximately $
As of June 30, 2025, the unrecognized compensationcost related to outstanding stock options was $
During the year ended December 31, 2021, employeesand consultants exercised a total of
During May 2022, the Company granted a consultant
During August 2023, the Company granted a consultant
During August 2024, the Company granted a consultant
The Company has recorded stock-based compensationexpense, which includes expense related to restricted stock units, allocated by functional cost as follows for the three and six monthsended June 30, 2024 and 2025 (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | ||||||||||||
Fair Value of Stock Options
The assumptions are based on the following foreach of the periods presented:
Expected Term - The expectedterm is calculated using the simplified method which is used when there is insufficient historical data about exercise patterns and post-vestingemployment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or foreach vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the maximum contractual expirationdate is used as the expected term under this method.
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Common Stock Fair Value - Thefair value of the common stock underlying the Company’s stock options prior to the initial public offering was estimated at eachgrant date and was determined on a periodic basis and based either on transactions with third parties in which common stock was soldfor cash or with the assistance of an independent third-party valuation expert. Subsequent to our initial public offering, the fair valueunderlying the Company’s common stock is determined based on the public market closing price on each date of grant. The assumptionsunderlying these valuations represented management’s best estimates, which involved inherent uncertainties and the applicationof significant levels of management judgment.
Volatility - The expected volatilitybeing used is derived from the historical stock volatilities of a representative industry peer group of comparable publicly listed companiesover a period approximately equal to the expected term of the options.
Risk-free Interest Rate - Therisk-free interest rate is based on median U.S. Treasury zero coupon issues with remaining terms similar to the expected term on the options.
Expected Dividend – ThroughJune 30, 2025, the Company has never declared nor paid any cash dividends. The Company shall modify its dividend policy to state thatthe Company intends to pay dividends to all stockholders, including holders of Series A Preferred Stock on an as-if-converted-to-common-stockbasis, on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (
The following averaged assumptions were used tocalculate the fair value of awards granted to employees, directors and non-employees for the three months ended June 30, 2024 and June30, 2025:
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2024 | 2025 | |||||||
| Expected volatility | % | |||||||
| Risk-free interest rate | % | |||||||
| Dividend yield | % | |||||||
| Expected term | ||||||||
12. Net Income (Loss) Per Share
The Company computes net income (loss) per shareusing the two-class method. The two-class method uses an earnings allocation formula that determines net income (loss) per share for commonstock and any participating securities according to dividends declared and participation rights in undistributed earnings.
Diluted net income (loss) per share includes thepotential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effectis dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units; (ii) common stock to be issuedupon the assumed exercise of the Company’s common stock warrants; (iii) convertible preferred stock; and (iv) prior to issuance,the issuable warrants related to the Company’s March private placement financing.
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The following table sets forth the computationof basic and diluted net income (loss) per share of common and preferred stock (in thousands, except share and per share data):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Basic net income (loss) per share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net loss attributable to participating securities | ( | ) | ||||||||||||||
| Dividend to Series B-1 preferred stockholders | ( | ) | ( | ) | ||||||||||||
| Net income (loss) attributable to common shares, basic | ( | ) | ( | ) | ( | ) | ||||||||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding used in computing net income (loss) per share attributable to common stockholders, basic | ||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Diluted net income (loss) per share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) attributable to common shares, basic | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Change in fair value of preferred stock warrant liability | ( | ) | ||||||||||||||
| Net (loss) attributable to common shares, diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic | ||||||||||||||||
| Weighted-average effect of diluted securities: | ||||||||||||||||
| Tranche warrants to purchase convertible preferred stock | ||||||||||||||||
| Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, diluted | ||||||||||||||||
| Net loss per share attributable to common stockholders, diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The following outstanding shares of potentiallydilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including themwould have been antidilutive:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Options to purchase common stock | ||||||||||||||||
| Warrants to purchase common stock | ||||||||||||||||
| Restricted stock units | ||||||||||||||||
| Common stock issuable upon conversion of Series B-1 convertible preferred stock | ||||||||||||||||
| Common stock issuable upon conversion of Series A-2 Prime convertible preferred stock | ||||||||||||||||
| Warrants to purchase convertible preferred stock | ||||||||||||||||
| Total | ||||||||||||||||
13. Subsequent Events
None
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
This Quarterly Report on Form 10-Q for the three-monthperiod ended June 30, 2025 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended(the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-lookingstatements contain information about our expectations, beliefs or intentions regarding our product development and commercialization efforts,business, financial condition, results of operations, strategies or prospects, and other similar matters. These forward-looking statementsare based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,risks and changes in circumstances that are difficult to predict. These statements may be identified by words such as “expects,”“plans,” “projects,” “will,” “may,” “anticipates,” “believes,”“should,” “intends,” “estimates,” and other words of similar meaning.
Actual results could differ materially from thosecontained in forward-looking statements. Many factors could cause actual results to differ materially from those in forward-looking statements,including those matters discussed below. Readers are urged to read the risk factors set forth in the Company’s recent filings withthe U. S. Securities and Exchange Commission (the “SEC”). These filings are available at the SEC’s website (www.sec.gov).
Other unknown or unpredictable factors that couldalso adversely affect our business, financial condition and results of operations may arise from time to time. Given these risks and uncertainties,the forward-looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue relianceon these forward-looking statements, which only reflect the views of the Company’s management as of the date of this report. Weundertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipatedevents or changes to future operating results or expectations, except as required by law.
The following discussion and analysis of ourfinancial condition and results of operations should be read in conjunction with our financial statements and the related notes to thosestatements included elsewhere in this quarterly report and in our previously filed Form 10-K. In addition to historical financial information,the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actualresults and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result ofmany factors, including those discussed under “Risk Factors” and elsewhere in this quarterly report. See “InformationRegarding Forward-Looking Statements.” All amounts in this report are in U.S. dollars, unless otherwise noted.
Overview
We are a clinical-stage biotechnology companyfocused on identifying, developing, and commercializing innovative therapies to address significant unmet medical needs, with an initialfocus on kidney disease. Founded in 2016, Unicycive was established to create a streamlined and efficient drug development platform capableof accelerating the advancement of promising therapies from discovery to commercialization. Currently, our two programs are focused onkidney disease, an area we believe we have the potential to offer medical benefit. Our initial focus is on developing drugs and gettingthem approved in the U.S., and then to partner with global biopharmaceutical companies in the rest of the world. As we grow the companyand build our team, we intend to focus on identifying medical conditions within and outside of kidney disease. Our business model is tolicense technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in globalmarkets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs. We believe,however, that our management team’s broad network, expertise in the biopharmaceutical industry, and successful track record givesus an advantage in identifying and bringing these assets into our company.
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Our current development programs are focused ontwo novel therapies: Oxylanthanum Carbonate, a next-generation phosphate binder for the treatment of hyperphosphatemia in chronic kidneydisease patients on dialysis, and UNI-494, a novel drug candidate in development for the treatment of acute kidney injury. OxylanthanumCarbonate and UNI-494 were initially developed by and licensed to us from Spectrum Pharmaceuticals (“Spectrum”) and SphaeraPharma, respectively. Spectrum conducted a Phase 1 clinical trial with Oxylanthanum Carbonate in 2012, prior to the grant of our licensein 2018. Sphaera conceived and performed initial characterization of various potential pro-drug linkers, including the initial patentapplication. As discussed herein, after completing IND enabling preclinical studies, we have completed a Phase I clinical study in healthyvolunteers with UNI-494 in 2024.
Chronic kidney disease (CKD) is the gradual lossof kidney (renal) function that can get worse over time leading to lasting damage and possibly Stage 5 or end-stage renal disease (ESRD).CKD affects nearly 36 million Americans; approximately 550,000 of them have end stage renal disease and require dialysis. Hyperphosphatemiais common in people with CKD and has been directly linked to increased morbidity and mortality for people on dialysis. For an estimated75% of people in the U.S. on dialysis, hyperphosphatemia remains uncontrolled due to challenges with the six currently available phosphatebinders, namely insufficient potency, pill burden and unpalatable formulations. To address this significant and growing challenge, Unicyciveis developing Oxylanthanum Carbonate, which leverages proprietary nanoparticle technology to address the shortcomings of current therapiesby delivering higher potency that enables fewer and smaller pills — all in a formulation that is more acceptable for patients becauseit is swallowed, not chewed. With OLC, if approved, people on dialysis and their physicians may have a better option to control hyperphosphatemia.
AKI is a sudden episode of kidney failure or kidneydamage (within the first 90 days of injury). After 90 days, the patient is considered to have progressed into CKD. AKI affects more than2 million U.S. patients and costs the healthcare system in excess of $9 billion per year. More than 300,000 patients per year in the U.S.die due to AKI. Currently there are no FDA approved medicines to treat DGF and/or AKI. Treatment options for AKI include continuous renalreplacement therapy, renal transplant, and dialysis. In most cases the damage to the kidney is irreversible, and the patient needs tohave a renal transplant or be on dialysis for life. Therefore, there is a high unmet medical need. If approved, UNI-494 has the potentialto be a first-in-class drug for the treatment of AKI.
Our business model is to license technologiesand drugs and pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companiesutilize similar strategies of in-licensing and then developing and commercializing drugs. We believe, however, that our management team’sbroad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringingthese assets into the Company at an attractive price with limited upfront cost.
Since our formation we have devoted substantiallyall of our resources to developing our product candidates. We have incurred significant operating losses to date. Our net losses were$11.1 million and $5.9 million for the six months ended June 30, 2024 and June 30, 2025, respectively. As of June 30, 2025, we hadan accumulated deficit of $107.1 million. We expect that our operating expenses will increase significantly as we advance our productcandidates through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization;acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual propertyportfolio; and hire additional personnel.
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We have funded our operations primarily from thesale and issuance of common and preferred stock, convertible promissory notes and from a loan, including cash and deferred salary fromour Chief Executive Officer and principal stockholder.
Our ability to generate product revenue will dependon the successful development, regulatory approval and eventual commercialization of our current product candidates and future productcandidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations throughprivate or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing.Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into agreements to raisecapital as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of ourcurrent product candidates and future product candidates.
We plan to continue to use third-party serviceproviders, including contract manufacturing organizations, to carry out our pre-clinical and clinical development and to manufacture andsupply the materials to be used during the development and commercialization of our product candidates.
Recent Developments
On June 11, 2025, we issued 300,000 shares ofcommon stock, upon conversion of 3,000 shares of our Series B-2 Preferred Stock.
In June 2025, we issued 277,000 shares of commonstock, upon conversion of shares of our Series A-3 Preferred Stock related to exercise of Tranche A warrants.
During the six months ended June 30, 2025, the Company sold 2,009,616shares of common stock pursuant to a sales agreement, with Guggenheim Securities, LLC, at an average price of $6.07 per share and paid$379,000 in commissions, resulting in net proceeds to the Company of approximately $12.2 million.
Reverse Stock Split
On June 18, 2025, the Company filed the CharterAmendment with the Secretary of State of the State of Delaware to effectuate a reverse stock split. The Company’s common stock begantrading on a split-adjusted basis at the opening of trading on the Nasdaq Capital Market on June 20, 2025. When the reverse stock splitbecame effective, every 10 shares of common stock were automatically reclassified and combined into one share of common stock. No fractionalshares were issued as a result of the split. Stockholders who would otherwise be entitled to receive a fractional share will instead automaticallyhave their fractional interests rounded up to the next whole share, after aggregating all the fractional interests of a holder resultingfrom the split. The split affects all stockholders uniformly and will not change any stockholder’s percentage ownership interestor any stockholder’s proportionate voting power, except for immaterial changes that may result from the treatment of fractionalshares. The split did not change the number of authorized shares of common stock or the par value per share of the common stock.
As a result of the reverse stock split, proportionateadjustments were made to the per share exercise prices of, and the number of shares underlying, the Company’s outstanding stockoptions, as well as to the number of shares available for future awards granted under the Company’s stock incentive plans. In addition,proportionate adjustments were made to the per share exercise prices of, and the number of shares underlying, outstanding warrants topurchase shares of the Company’s common stock. Further, a proportionate adjustment was made to the per share conversion price ofthe Company’s series A-2 prime preferred stock, pursuant to its terms. Following the reverse stock split we had 12,768,239 sharesof our common stock outstanding, which excludes approximately 49,000 shares of our common stock that were issued for rounding up fractionalshares resulting from the reverse stock split. The reverse stock Split is retroactively reflected in the Company’s condensed consolidatedbalance sheets, condensed consolidated statements of operations, condensed consolidated statements of changes in shareholders’ equityand loss per share data.
Components of Results of Operations
Research and Development Expenses
Substantially all of our research and developmentexpenses consist of expenses incurred in connection with the development of our product candidates. These expenses include fees paid tothird parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, productacquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costsand stock-based compensation expenses for our research and product development employees and allocated overheads, including informationtechnology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution clause in the purchase of in processresearch and development technology. We expense both internal and external research and development expenses as they are incurred.
We do not allocate our costs by product candidate,as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratorysupplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activitieson our behalf, are not tracked by product candidate.
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We expect our research and development expensesto increase substantially for at least the next few years, as we seek to initiate additional clinical trials for our product candidates,complete our clinical programs, pursue regulatory approval of our product candidates and prepare for the possible commercialization ofsuch product candidates. Predicting the timing or cost to complete our clinical programs or validation of our commercial manufacturingand supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example,if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, wecould be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore,we are unable to predict when or if our product candidates will receive regulatory approval with any certainty.
General and Administrative Expenses
General and administrative expenses consist principallyof payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees forlegal, consulting, accounting and tax services, including information technology costs and utilities, and other general operating expensesnot otherwise classified as research and development expenses.
We anticipate that our general and administrativeexpenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting servicescosts associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director andofficer insurance premiums associated with being a public company.
Other Expenses
Other expenses consist of the change in fair valueof our warrant liability, interest income and interest expense.
Results of Operations
Comparison of the Three Months Ended June30, 2024 and 2025
The following table summarizes our results ofoperations for the periods indicated (in thousands):
| Three Months Ended June 30, | % | |||||||||||||||
| 2024 | 2025 | Change | Change | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 4,868 | 1,750 | (3,118 | ) | (64 | )% | ||||||||||
| General and administrative | 2,533 | 5,213 | 2,680 | 106 | % | |||||||||||
| Total operating expenses | 7,401 | 6,963 | (438 | ) | (6 | )% | ||||||||||
| Loss from operations | (7,401 | ) | (6,963 | ) | 438 | (6 | )% | |||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income | 462 | 155 | (307 | ) | (66 | )% | ||||||||||
| Interest expense | (16 | ) | (13 | ) | 3 | (19 | )% | |||||||||
| Change in fair value of warrant liability | 16,810 | 374 | (16,436 | ) | (98 | )% | ||||||||||
| Total other income (expenses) | 17,256 | 516 | (16,740 | ) | (97 | )% | ||||||||||
| Net income (loss) | $ | 9,855 | $ | (6,447 | ) | (16,302 | ) | (165 | )% | |||||||
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Research and Development Expenses
Research and development expenses decreased byapproximately $3.1 million, or 64%, from approximately $4.9 million for the three months ended June 30, 2024, to approximately $1.8 millionfor the three months ended June 30, 2025.
The decrease in research and development expenseswas primarily due to a $3.1 million decrease in drug development costs, consulting and other costs of $93,000, and stock-based compensationof $23,000, partially offset by an increase in labor costs of $86,000
General and Administrative Expenses
General and administrative expenses increasedby $2.7 million , or 106%, from approximately $2.5 million for the three months ended June 30, 2024, to approximately $5.2 million forthe three months ended June 30, 2025 primarily due to an increase of $2.2 million in marketing, consulting and other expenses relatedto our commercial launch, increase of $417,000 in labor costs, increase of $201,000 of insurance, travel and other costs, partially offsetby a decrease of $47,000 in stock-based compensation.
Other Income (Expenses)
Other income (expenses) decreased $16.7 million,or 165%, from $17.3 million in the three months ended June 30, 2024 to $0.5 million for the three months ended June 30, 2025 due primarilyto the change in fair value of our warrant liability of $16.4 million and a decrease in interest income of $307,000.
Comparison of the Six Months Ended June30, 2024 and 2025
| Six Months Ended June 30, | % | |||||||||||||||
| 2024 | 2025 | Change | Change | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 11,681 | 3,936 | (7,745 | ) | (66 | )% | ||||||||||
| General and administrative | 4,925 | 11,031 | 6,106 | 124 | % | |||||||||||
| Total operating expenses | 16,606 | 14,967 | (1,639 | ) | (10 | )% | ||||||||||
| Loss from operations | (16,606 | ) | (14,967 | ) | 1,639 | (10 | )% | |||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income | 532 | 381 | (151 | ) | (28 | )% | ||||||||||
| Interest expense | (36 | ) | (13 | ) | 23 | (64 | )% | |||||||||
| Change in fair value of warrant liability | 5,002 | 8,722 | 3,720 | 74 | % | |||||||||||
| Total other income (expenses) | 5,498 | 9,090 | 3,592 | 65 | % | |||||||||||
| Net loss | $ | (11,108 | ) | $ | (5,877 | ) | 5,231 | (47 | )% | |||||||
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Research and Development Expenses
Research and development expenses decreased byapproximately $7.7 million, or 66%, from approximately $11.7 million for the six months ended June 30, 2024 to approximately $3.9 millionfor the six months ended June 30, 2025. The decrease in research and development expenses was primarily due to an $8.1 million decreasein drug development costs, partially offset by an increase in labor costs of $239,000, consulting and other costs of $110,000, and stock-basedcompensation of $13,000.
General and Administrative Expenses
General and administrative expenses increasedby $6.1 million, or 124%, from approximately $4.9 million for the six months ended June 30, 2024 to approximately $11.0 million for thesix months ended June 30, 2025 primarily due to an increase of $5.0 million in marketing, consulting and other expenses related to ourcommercial launch, increase of $884,000 in labor costs, increase of $284,000 of insurance, travel and other costs, partially offset bya decrease of $42,000 in stock-based compensation.
Other Income (Expenses)
Other income (expenses) increased by $3.6 million(income), or 65%, from $5.5 million expense in the six months ended June 30, 2024 to $9.0 million income for the six months ended June30, 2025 due primarily to the change in fair value of our warrant liability of $3.7 million, partially offset by a decrease in interestincome of $151,000.
Liquidity and Capital Resources
Sources of Liquidity
Since our formation through December 31,2020, we have funded our operations with the sale of common and preferred stock, convertible notes and from a loan from our Chief ExecutiveOfficer and principal stockholder.
As a result of our initial public offering (“IPO”),on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received approximately$22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses. We have used the net proceedsfrom the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate purposes,including hiring additional management and conducting market research and other commercial planning.
Future revenue streams may consist of collaborationor licensing revenue as well as product sales.
On March 3, 2023, we entered into a securitiespurchase agreement with certain healthcare-focused institutional investors that may provide up to $130.0 million in gross proceeds througha private placement and that included initial upfront funding of $30.0 million.
On March 13, 2024, we entered into a securitiespurchase agreement with certain accredited investors to provide $50 million in gross proceeds through a private placement. Pursuant tothe securities purchase agreement, we issued institutional purchasers $50.0 million in shares of Series B Convertible Preferred Stock.We received $46.2 million in net proceeds.
On November 13, 2024, we entered into a salesagreement, with Guggenheim Securities, LLC pursuant to which, we may offer and sell shares of common stock having an aggregate offeringprice of up to $50.0 million, subject to certain limitations and in accordance with the terms of the sales agreement, from time to timethrough or to Guggenheim Securities, LLC acting as sales agent or principal. During the six months ended June 30, 2025, the Company sold2,009,616 shares of common stock at an average price of $6.07 per share and paid $379,000 in commissions, resulting in net proceeds tothe Company of approximately $12.2 million.
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Future Funding Requirements
We have incurred net losses since our inception.For the six months ended June 30, 2025, we had a net loss of $5.9 million, and we expect to incur substantial additional losses in futureperiods. As of June 30, 2025, we had an accumulated deficit of $107.1 million.
We expect to continue incurring losses in thefuture and will be required to raise additional capital in the future to complete our clinical trials, pursue product development initiativesand penetrate markets for the sale of our products. We believe that we will continue to have access to capital resources through possibleequity offerings, debt financings, corporate collaborations or other means. There can be no assurance that we will be able to obtain additionalfinancing on terms acceptable to us, on a timely basis or at all. If we are unable to secure additional capital, we may be required tocurtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in order to conserveour cash in amounts sufficient to sustain operations and meet our obligations. Based on our current level of expenditures, we believethat we have sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one yearafter the date that these financial statements are available to be issued.
We anticipate that we will need to raise substantialadditional capital, the requirements for which will depend on many factors, including:
| ● | the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates; |
| ● | the number and scope of clinical programs we decide to pursue; |
| ● | the cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates; |
| ● | the scope and costs of development and commercial manufacturing activities; |
| ● | the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval; |
| ● | the extent to which we acquire or in-license other product candidates and technologies; |
| ● | the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; |
| ● | our ability to establish and maintain collaborations on favorable terms, if at all; |
| ● | our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval; |
| ● | the impact, if any, of the coronavirus pandemic on our business operations; |
| ● | our ability to access capital; |
| ● | our implementation of operational, financial and management systems; and |
| ● | the costs associated with being a public company. |
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A change in the outcome of any of these or othervariables with respect to the development of any of our current product candidates or future product candidates could significantly changethe costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future,and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans.If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into whichwe enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens oradditional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or assetsale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.
Adequate funding may not be available to us onacceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition andour ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce,or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others rightsto our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we arerequired to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limitour ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders,which could materially affect our business and financial condition.
Summary of Cash Flows
The following table sets forth the primary sourcesand uses of cash for each of the periods presented below (in thousands):
| Six Months Ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net cash (used in) provided by: | ||||||||
| Operating activities | $ | (12,775 | ) | $ | (17,323 | ) | ||
| Investing activities | (26 | ) | (22 | ) | ||||
| Financing activities | 44,880 | 13,530 | ||||||
| Net increase (decrease) in cash and cash equivalents | $ | 32,079 | $ | (3,815 | ) | |||
Cash Flows from Operating Activities
Net cash used in operating activities was $17.3million for the six months ended June 30, 2025. Cash used in operating activities was primarily due to the use of funds for developmentcosts associated with our drug candidates, labor costs, consulting services, and other corporate expenditures for investor relations,compliance, and legal services.
Net cash used in operating activities was $12.8million for the six months ended June 30, 2024. Cash used in operating activities was primarily due to the use of funds for developmentcosts associated with our drug candidates, labor costs, consulting services, and other corporate expenditures for investor relations,compliance, and legal services.
Cash Flows from Investing Activities
Net cash used in investing activities was $22,000for the six months ended June 30, 2025 and was due to the purchase of lab equipment.
Net cash used in investing activities was $26,000for the six months ended June 30, 2024 and was due to the purchase of furniture and fixtures for our corporate office.
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Cash Flows from Financing Activities
Net cash provided by financing activities was$13.5 million during the six months ended June 30, 2025 due primarily to the at the market public offering agreement we signed on November13, 2024 .
Net cash provided by financing activities was$44.9 million during the six months ended June 30, 2024 due primarily to the private placement financing agreement we signed on March13, 2024.
Critical Accounting Policies, Significant Judgments and Use of Estimates
Our financial statements have been prepared inaccordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requiresus to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets andliabilities at the date of the financial statements and the reported expenses incurred during the reporting periods. Our estimates arebased on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results ofwhich form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from othersources. Actual results may differ from these estimates under different assumptions or conditions. We consider our critical accountingpolicies and estimates to be related to revenue, research and development, stock-based compensation, debt and equity classification andwarrant liabilities. There have been no other material changes to our critical accounting policies and estimates during the six monthsended June 30, 2025 from those used for the year ended December 31, 2024. The below policies represent our critical accounting policies.
Revenue Recognition
We implemented ASC 606, Revenue from Contractswith Customers. This includes the development of new policies based on the five-step model provided in the new revenue standard, ongoingcontract review requirements, and gathering of information provided for disclosures. We recognize revenue from product sales or servicesrendered when control of the promised goods is transferred to a counterparty in an amount that reflects the consideration to which weexpect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identifythe contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transactionprice to performance obligations in the contract and recognize revenues when or as we satisfy a performance obligation.
Debt and Equity Classification
In conjunction with the issuance of Series A-1Preferred Stock in March 2023, and in conjunction with the issuance of Series B-1 Preferred Stock in March 2024, we initially accountfor the preferred stock as temporary, or mezzanine, equity. The Series A-1 and Series B-1 Preferred Stock do not fall within the scopeof ASC 480, Distinguishing Liabilities from Equity, do not contain any embedded derivatives that require bifurcation, and are notclassified as liabilities. However, as the Series A-1 and Series B-1 Preferred Stock, at issuance, are contingently redeemable upon theoccurrence of an event that is not solely within our control, they are required to be initially classified as mezzanine equity and measuredat the amount of net proceeds received. As the Series A-1 and Series B-1 Preferred Stock are not currently redeemable or probable of becomingredeemable, no subsequent remeasurement is required.
Warrant Liabilities
In conjunction with the issuance of Series A-1Preferred Stock (see Note 10), we established a warrant liability as of March 3, 2023, representing the fair value of warrants that maybe issued, subject to shareholder approval, upon conversion of the Series A-1 Preferred Stock. We account for these warrants as liabilities(in accordance with ASC 480, Distinguishing Liabilities from Equity) on the balance sheets as a result of certain redemption clausesthat are not within the control of the Company. The warrant liabilities are initially measured at fair value, resulting in an implieddiscount on the related preferred stock financing arrangement (recognized as a partial offset to the carrying value of the Series A-1Preferred Stock), and are remeasured at fair value each reporting period. Changes in the fair value of the warrant liabilities are recognizedin earnings during each period. The warrant liabilities are measured using Level 3 fair value inputs. See Note 10 for a description ofwarrant liabilities and the related valuations.
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Research and Development
We expense costs when incurred related to theresearch and development associated with the design, development and testing of product candidates, as well as acquisition of productcandidates or compounds. Research and development expenses include fees paid to third parties to conduct certain research and developmentactivities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll andpersonnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our researchand product development employees and allocated overheads, including information technology costs and utilities and expenses for issuanceof shares pursuant to anti-dilution clause in the purchase of IPR&D technology. We expense both internal and external research anddevelopment expenses as they are incurred.
Stock-Based Compensation
We account for stock-based compensation for allshare-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensationexpense over the requisite service period on a straight-line basis. We recognize forfeitures related to stock-based compensation as theyoccur. We estimate the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes model requires theinput of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, and the risk-freeinterest rate.
JOBS Act Accounting Election
On April 5, 2012, the JOBS Act was enacted.Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition periodprovided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerginggrowth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have chosen to take advantage of the extendedtransition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards untilthose standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may notbe comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.
Subject to certain conditions set forth in theJOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation,(i) providing an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of theSarbanes-Oxley Act and (ii) complying with the requirement adopted by the Public Company Accounting Oversight Board (“PCAOB”)regarding the communication of critical audit matters in the auditor’s report on financial statements. We will remain an “emerginggrowth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial publicoffering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv)the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
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Recent Accounting Pronouncements
See the section titled “Summary of SignificantAccounting Policies—Recent Accounting Pronouncements” in Note 2 to our financial statements included elsewhere in this quarterlyreport for additional information.
Off-Balance Sheet Arrangements
We did not have during the periods presented,and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK
As a smaller reporting company, we are not requiredto provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this QuarterlyReport on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of the Company’s management,including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosurecontrols and procedures pursuant to Exchange Act Rule 13a-15. Based upon this evaluation, the Chief Executive Officer and Chief FinancialOfficer each concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information requiredto be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported withinthe time periods specified by the SEC’s rules and forms, and that such information has been accumulated and communicated to ourmanagement, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding requireddisclosure.
Changes in Internal Control Over FinancialReporting
There have been no changes in our internal controlover financial reporting identified in connection with the evaluation that occurred during the quarter ended June 30, 2025 that have materiallyaffected, or are reasonably likely to materially affect, the internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any material legalproceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverseeffect on our business, operating results, cash flows or financial condition. We may periodically be the subject of various pending orthreatened legal actions and claims arising out of our operations in the normal course of business. Regardless of the outcome, such proceedingsor claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and therecan be no assurances that favorable outcomes will be obtained. In the opinion of management, adequate provision has been made in our financialstatements at June 30, 2025 with respect to such matters.
ITEM 1A. RISK FACTORS
There have been no material changes from the riskfactors disclosed in our Form 10-K for the year ended December 31, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIESAND USE OF PROCEEDS
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
On August 13, 2025, we filed a Certificate of Correction with the Secretaryof State of Delaware (“Certificate of Correction”) for our Amended and Restated Certificate of Designation of Preferences,Rights and Limitations of Series A Convertible Voting Preferred Stock (“Series A Certificate of Designation”) filed with theSecretary of State of Delaware on March 13, 2024. The Certificate of Correction was filed to correct certain scrivener’s errorsin the Series A Certificate of Designation with respect to adjustments for stock dividends and stock splits under Section 7(a) of theSeries A Certificate of Designation which inadvertently stated that the Conversion Price for each series of Series A Preferred Stock adjustedupon any stock dividends and stock splits if such actions occurred at any time when any shares of Series A Preferred Stock were outstandingwhereas there should only be an adjustment to the Conversion Price of a particular series of Series A Preferred Stock for any shares ofsuch series of Series A Preferred Stock outstanding at the time of the stock dividend or stock split. Pursuant to Section 103(f) of theDelaware General Corporation Law, the correction was effective as of March 14, 2024, except as to those persons who are substantiallyand adversely affected by the correction, and as to those persons the correction was effective as of August 13, 2025.
The foregoing descriptionof the Certificate of Correction is qualified in its entirety by reference to the full text of the Certificate of Correction, which isfiled herewith as Exhibit 3.1 and incorporated herein by reference.
ITEM 6. EXHIBITS
Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit were omitted by means of marking such portions with an asterisk because such information is both not material and is the type that the Company treats as private or confidential.
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SIGNATURES
Pursuant to the requirements of Section 13 or15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned,thereunto duly authorized on the 14th day of August, 2025.
| Signature | Title | Date | ||
| /s/ Shalabh Gupta | Chief Executive Officer, President and Chairman | August 14, 2025 | ||
| Shalabh Gupta | (Principal Executive Officer) | |||
| /s/ John Townsend | Chief Financial Officer | August 14, 2025 | ||
| John Townsend | (Principal Financial and Accounting Officer) |
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Exhibit 3.1
STATE OF DELAWARE
CERTIFICATE OF CORRECTION
Unicycive Therapeutics, Inc., a corporation organizedand existing under and by virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
1. The name of the corporationis Unicycive Therapeutics, Inc.
2. That the Amended and Restated Certificate of Designation of Preferences,Rights and Limitations of Series A Convertible Voting Preferred Stock (“Series A Certificate of Designation”) was filed bythe Secretary of State of Delaware on March 13, 2024, and that said Series A Certificate of Designation requires correction as permittedby Section 103 of the General Corporation Law of the State of Delaware.
3. The inaccuracy or defectof said Series A Certificate of Designation is as follows:
a. Section 7(a) of the Series A Certificate of Designation inadvertentlystated that the Conversion Price for each series of Series A Preferred Stock adjusted upon any stock dividends and stock split if suchactions occurred at any time when any shares of Series A Preferred Stock were outstanding whereas there should only be an adjustment tothe Conversion Price of a particular series of Series A Preferred Stock for any shares of such series of Series A Preferred Stock outstandingat the time of the stock dividend or stock split.
4. Section7(a) of the Series A Certificate of Designation in correct form should read in its entirety as follows:
(a) Stock Dividends and Stock Splits. If the Corporation, at any time while any shares of Series A-2 Prime PreferredStock, Series A-3 Preferred Stock, Series A-4 Preferred Stock or Series A-5 Preferred Stock are outstanding: (i) pays a stock dividendor otherwise makes a distribution or distributions payable in shares of Common Stock with respect to the then outstanding shares of CommonStock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines (including by wayof a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Price for such sharesof Series A-2 Prime Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock or Series A-5 Preferred Stock outstandingat the time of such stock dividend, stock split or reverse stock split, as the case may be, shall be multiplied by a fraction of whichthe numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediatelybefore such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event(excluding any treasury shares of the Corporation); provided, however, that if there are no shares of Series A-2 Prime PreferredStock, Series A-3 Preferred Stock, Series A-4 Preferred Stock or Series A-5 Preferred Stock at the time of such stock dividend, stocksplit or reverse stock split, as the case may be, then there shall be no adjustment to the Conversion Price for each such series of SeriesA Preferred Stock with no shares outstanding at the time of the stock dividend, stock split or reverse stock split.. Any adjustment madepursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholdersentitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivisionor combination.
IN WITNESS WHEREOF, Unicycive Therapeutics, Inc. has causedthis Certificate of Correction this 13th day of August 2025.
| /s/ Shalabh Gupta | ||
| By: | Shalabh Gupta, CEO | |
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Shalabh Gupta, M.D.,certify that:
| (1) | I have reviewed this Form 10-Q of Unicycive Therapeutics, Inc.; |
| (2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| (3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| (4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| (5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2025 | By: | /s/ Shalabh Gupta, M.D. |
| Shalabh Gupta, M.D. | ||
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Townsend, certifythat:
| (1) | I have reviewed this Form 10-Q of Unicycive Therapeutics, Inc.; |
| (2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| (3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| (4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| (5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2025 | By: | /s/ John Townsend |
| John Townsend | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the QuarterlyReport of Unicycive Therapeutics, Inc. (the “Company”) on Form 10-Q for the three month period ended June 30, 2025, as filedwith the Securities and Exchange Commission on August 14, 2025 (the “Report”), I, Shalabh Gupta, M.D., Chief Executive Officerof the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information containedin the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and forthe periods presented in the Report.
| Date: August 14, 2025 | By: | /s/ Shalabh Gupta, M.D. |
| Shalabh Gupta, M.D. | ||
| Chief Executive Officer |
A signed original of thiswritten statement required by Section 906 has been provided to the Company and will be furnished to the Securities and Exchange Commissionor its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the QuarterlyReport of Unicycive Therapeutics, Inc. (the “Company”) on Form 10-Q for the three month period ended June 30, 2025, as filedwith the Securities and Exchange Commission on August 14, 2025 (the “Report”), I, John Townsend, Chief Financial Officer ofthe Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information containedin the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and forthe periods presented in the Report.
| Date: August 14, 2025 | By: | /s/ John Townsend |
| John Townsend | ||
| Chief Financial Officer |
A signed original of thiswritten statement required by Section 906 has been provided to the Company and will be furnished to the Securities and Exchange Commissionor its staff upon request.