0001410578-23-002343 | 10-Q | XBRL Viewer

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Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Cash equivalents	$ 49,609	$ 62,074
Total assets	49,609	62,074
Level 1
Assets:
Cash equivalents	49,609	62,074
Total assets	$ 49,609	$ 62,074

Accrued Expenses

9 Months Ended

Sep. 30, 2023

Accrued Expenses

Accrued Expenses

4. Accrued Expenses

Accrued expenses consist of the following:


	September 30,		December 31,
	2023		2022
Clinical trials	$	2,134	$	2,093
Professional fees		200		533
Payroll and related expenses		2,436		2,526
Accrued expenses	$	4,770	$	5,152

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 09, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Entity File Number	001-37990
Entity Registrant Name	LEAP THERAPEUTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-4412575
Entity Address, Address Line One	47 Thorndike St, Suite B1-1
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02141
City Area Code	617
Local Phone Number	714-0360
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	LPTX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,565,414
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001509745
Amendment Flag	false

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (13,696)	$ (15,094)	$ (68,949)	$ (42,494)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Commitments and Contingencies - Manufacturing, License and Service Agreements (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Commitments and Contingencies
Manufacturing commitments	$ 469
License and service agreements
Commitments and Contingencies
Royalties paid or accrued	0
Licensing agreements
Commitments and Contingencies
Royalties paid or accrued	$ 0

Warrants

9 Months Ended

Sep. 30, 2023

Warrants

Warrants

6. Warrants

As of September 30, 2023, the number of shares of common stock issuable upon the exercise of outstanding warrants, consisted of the following:


September 30, 2023
	Number of Common Shares
Description	Issuable	Exercise Price		Expiration Date
January 23 2017 Warrants	5,450	$	0.10	Upon M&A Event
2017 Warrants	250,227	$	10.55	November 2024
2019 Warrants	690,813	$	19.50	February 2026
March 2020 Pre-funded Warrants	824,716	$	0.01	No Expiry
March 2020 Coverage Warrants	2,594,501	$	21.10	Jan - March 2027
September 2021 Pre-funded Warrants	591,602	$	0.01	No Expiry
January 2023 Common Stock Warrants	50,830	$	6.78	February 2025
	5,008,139

2019 Warrants

During the nine months ended September 30, 2023, the Company redeemed 10,000 of the 2019 Warrants at a purchase price of $2.90 per share.

January 2023 Common Stock Warrants

In January 2023, pursuant to the Merger, the warrants held by the Flame Warrant Holders became exercisable for 6,530 shares of Leap’s common stock (the “January 2023 Common Stock Warrants”). The January 2023 Common Stock Warrants have an exercise price of $6.78 per share and expire in February 2025. The January 2023 Common Stock Warrants qualify for equity classification.

January 2023 Series X Preferred Stock Warrants

In January 2023, pursuant to the Merger, the warrants held by the Flame Warrant Holders also became exercisable for 443 shares of Series X Preferred Stock (the “January 2023 Series X Preferred Stock Warrants”). Following Stockholder Approval, each share of Series X Preferred Stock converted into 100 shares of common stock during the three months ended June 30, 2023. The January 2023 Series X Preferred Stock Warrants have an exercise price of $6.78 per share and expire in February 2025.

The Company initially recorded the January 2023 Series X Preferred Stock Warrants as a liability on its condensed consolidated balance sheet as of the Effective Date and subsequently remeasured the warrant liability to fair value at each reporting date and on the date Stockholder Approval was obtained to convert shares of Series X Preferred Stock into shares of common stock. Changes in the fair value of the warrant liability were recognized as gains (losses) in the Company’s consolidated statement of operations. During the nine months ended September 30, 2023, the Company recorded a gain of $12 in its condensed consolidated statement of operations.

During the nine months ended September 30, 2023, upon obtaining Stockholder Approval, the January 2023 Series X Preferred Stock Warrants were converted into common stock warrants and reclassified from liability to equity.

Net Loss Per Share

9 Months Ended

Sep. 30, 2023

Net Loss Per Share

Net Loss Per Share

9. Net Loss Per Share

Basic and diluted net loss per share for the three and nine months ended September 30, 2023 and 2022 was calculated as follows (in thousands except share and per share amounts).


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(13,696)	$	(15,094)	$	(68,949)	$	(42,494)
Net loss attributable to common stockholders for basic and diluted loss per share	$	(13,696)	$	(15,094)	$	(68,949)	$	(42,494)

Denominator:
Weighted average number of common shares outstanding – basic and diluted		26,987,182		11,323,909		18,240,455		11,323,909
Net loss per share attributable to common stockholders – basic and diluted	$	(0.51)	$	(1.33)	$	(3.78)	$	(3.75)

Included within weighted average common shares outstanding for the three and nine months ended September 30, 2023 and 2022 are 1,421,768 common shares issuable upon the exercise of certain warrants, which are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders.

All warrants exercisable for common stock participate on a one-for-one basis and shares and warrants exercisable for Series X Preferred Stock issued participate on an as converted basis with common stock in the distribution of dividends, if and when declared by the board of directors, on the Company’s common stock. For purposes of computing EPS, these securities are considered to participate with common stock in earnings of the Company. Therefore, the Company calculates basic and diluted EPS using the two-class method. Under the two-class method, net income for the period is allocated between common stockholders and participating securities according to dividends declared and participation rights in undistributed earnings. No income was allocated to the warrants and Series X Preferred Stock for the three and nine months ended September 30, 2023 and 2022, as results of operations were a loss for the period.

The Company’s potentially dilutive securities include RSUs, stock options and warrants. These securities were excluded from the computations of diluted net loss per share for the three and nine months ended September 30, 2023 and 2022, as the effect would be to reduce the net loss per share. The following table includes the potential shares of common stock, presented based on amounts outstanding at each period end, that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Restricted stock units to purchase common stock	285,000	358,561	285,000	358,561
Options to purchase common stock	3,425,647	1,193,270	3,425,647	1,193,270
Warrants to purchase common stock	3,586,371	3,545,567	3,586,371	3,545,567
	7,297,018	5,097,398	7,297,018	5,097,398

Acquisition of Flame Biosciences

9 Months Ended

Sep. 30, 2023

Acquisition of Flame Biosciences

Acquisition of Flame Biosciences

3. Acquisition of Flame Biosciences

Merger

On January 17, 2023 (the “Effective Date”), Leap acquired 100% of the outstanding equity of Flame, in accordance with the terms of the Agreement and Plan of Merger, dated as of the Effective Date (the “Merger Agreement”), by and among Leap, Fire Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Leap (“First Merger Sub”), Flame Biosciences LLC, a Delaware limited liability company and wholly owned subsidiary of Leap (“Second Merger Sub”), Flame, and the Stockholder Representative named therein. Pursuant to the Merger Agreement, First Merger Sub merged with and into Flame, and Flame was the surviving corporation of such merger and became a wholly owned subsidiary of Leap (the “First Merger”). Immediately following the First Merger, Flame merged with and into Second Merger Sub, and Second Merger Sub was the surviving entity of such merger (together with the First Merger, the “Merger”).

Pursuant to the Merger, Leap agreed to issue to the stockholders of Flame (the “Flame Stockholders”) 1,972,901 shares of common stock, and 136,248 shares of Series X Preferred Stock, which was a newly designated series of preferred stock that was intended to have economic rights equivalent to the common stock, but with limited voting rights, and issued to the warrant holders of Flame (the “Flame Warrant Holders”) the right to acquire 6,530 shares of common stock (the “January 2023 Common Stock Warrants”) and 443 shares of Series X Preferred Stock (the “January 2023 Series X Preferred Stock Warrants”). Each share of Series X Preferred Stock converted into 100 shares of common stock during the nine months ended September 30, 2023, as a result of the one-for-ten reverse stock split approved by the stockholders and effected by the Board of Directors. Under the terms of the Merger Agreement, Leap held back approximately 15,604 Series X Preferred shares (the “Holdback Shares”), which converted into 1,560,400 shares of common stock out of the aggregate number of shares that the Flame Stockholders otherwise would be entitled to receive pursuant to the Merger so that Leap can have recourse to the Holdback Shares for purposes of satisfying certain claims for indemnification that Leap may have against the Flame Stockholders in connection with the Merger.

On June 16, 2023, the Company obtained Stockholder Approval to convert the Series X Preferred Stock into shares of its common stock, which occurred on June 21, 2023.

The Company accounted for the acquisition of Flame as an asset acquisition allocating the purchase price under GAAP of $79,016 to net assets acquired. Although there is a presumption under SEC Rule 11-01(d) (“11-01(d)”) that when a legal entity is acquired, it represents a business acquisition, the Company concluded that, in this case, the transaction did not represent the acquisition of a business. After considering the criteria set forth in 11-01(d), the Company concluded that the acquisition of Flame by the Company was an acquisition of assets and not an acquisition of a business in accordance with 11-01(d). Specifically, the Company concluded that 1) the entity did not generate revenue and 2) there was not sufficient continuity of Flame’s operations prior to and following the transaction, in that no facilities, employees, sales force, distribution system, customer base, trade names or production techniques remained with the entity after the acquisition.

Leap primarily acquired cash of $50,362, certain working capital items ($928) and a portfolio of clinical- and pre-clinical-stage intellectual property, in connection with the acquisition of Flame. The Company accounted for the acquisition of Flame by recording the cash and any other assets and liabilities of Flame on its condensed consolidated balance sheet at their historical carrying values, which approximates fair values. The remaining fair value of the consideration transferred was allocated to the in-process research and development (“IPR&D”) assets acquired. Certain transaction costs that were not deemed to meet the criteria of costs directly attributable to the issuance of securities were capitalized in accordance with ASC 805-50-30-1 and recognized as part of fair value of assets acquired. As the Company concluded that such IPR&D does not have an alternative future use, the relative fair value allocated to acquired IPR&D of $29,582 was expensed in research and development expenses within the Company’s condensed consolidated statement of operations during the nine months ended September 30, 2023.

The following table summarizes the net assets acquired based on their estimated fair values as of January 17, 2023 (in thousands):


Acquired IPR&D	$	29,582
Cash and cash equivalents		50,362
Accounts payable and accrued liabilities		(928)
Total acquisition value	$	79,016

The fair value assigned to each component of the purchase consideration, including direct costs of the acquisition of $1,393, as of the Effective Date is set forth in the table below (in thousands, except share and per share amounts):


		Equivalent common
	Number of shares	shares	Fair Value
Leap common stock (par value $0.001 per share)	1,972,901	1,972,901	$	9,805
Leap Series X Preferred Stock (100:1)	136,248	13,624,800		67,715
Warrants on Leap common stock	6,530	6,530		13
Warrants on Leap Series X Preferred Stock (100:1)	443	44,300		90
Direct and incremental costs of the asset acquisition				1,393

Total		15,648,531	$	79,016

In addition, subject to and upon the terms and conditions set forth in the Merger Agreement, the Company may also (i) pay Contingent Merger Consideration (as defined in the Merger Agreement) that may become payable if, and only if, certain assets of Flame related to Flame’s FL-101 program and/or FL-103 program are sold after the consummation of the Merger pursuant to the FL-101/103 Disposition Agreement (as defined in the Merger Agreement), which Contingent Merger Consideration shall be 80% of the after-tax net proceeds of such sale, if any, and the payment thereof is subject to the terms and conditions set forth in the Merger Agreement and (ii) issue pursuant to the Merger additional shares of Series X Preferred Stock or common stock as a result of any applicable post-closing purchase price adjustment in the event that Flame’s actual Company Net Cash (as defined in the Merger Agreement) as of the Effective Date is determined to be greater than Flame’s estimated Company Net Cash as of the closing.

Series X Preferred Stock

Pursuant to the Merger, the Company agreed to issue 136,248 shares of Series X Preferred Stock to Flame Stockholders and January 2023 Series X Preferred Stock Warrants for 443 shares of Series X Preferred Stock to Flame Warrant Holders. The Company obtained Stockholder Approval during the nine months ended September 30, 2023 to convert each issued share of Series X Preferred Stock and each share of Series X Preferred Stock issuable pursuant to the January 2023 Series X Preferred Stock Warrants into 100 shares of its common stock. The Series X Preferred Stock was converted to common stock on June 21, 2023.

January 2023 Common Stock Warrants and January 2023 Series X Preferred Stock Warrants

Also in January 2023, pursuant to the Merger, the warrants held by the Flame Warrant Holders became exercisable for 443 shares of Series X Preferred Stock (the “January 2023 Series X Preferred Stock Warrants”). Upon obtaining Stockholder Approval for the conversion of the Series X Preferred Stock and the one-for-ten reverse stock split, each share of Series X Preferred Stock converted into 100 shares of Common Stock. The January 2023 Series X Preferred Stock Warrants have an exercise price of $6.78 per share and expire in February 2025.

The Company initially recorded the January 2023 Series X Preferred Stock Warrants as a liability on the Effective Date and the warrant liability was subsequently remeasured to fair value at each reporting date and on the date on which Stockholder Approval to convert shares of Series X Preferred Stock into shares of common stock was obtained. On June 21, 2023, after obtaining stockholder approval for the conversion of the Series X Preferred Stock into common stock, the January 2023 Series X Preferred Stock Warrants were reclassified from liability to equity.

Changes in the fair value of the warrant liability are recognized as gains (losses) in the Company’s consolidated statement of operations. During the nine months ended September 30, 2023, the Company recorded a gain of $12 in its condensed consolidated statement of operations.

Warrants (Tables)

9 Months Ended

Sep. 30, 2023

Warrants

Schedule of warrants


September 30, 2023
	Number of Common Shares
Description	Issuable	Exercise Price		Expiration Date
January 23 2017 Warrants	5,450	$	0.10	Upon M&A Event
2017 Warrants	250,227	$	10.55	November 2024
2019 Warrants	690,813	$	19.50	February 2026
March 2020 Pre-funded Warrants	824,716	$	0.01	No Expiry
March 2020 Coverage Warrants	2,594,501	$	21.10	Jan - March 2027
September 2021 Pre-funded Warrants	591,602	$	0.01	No Expiry
January 2023 Common Stock Warrants	50,830	$	6.78	February 2025
	5,008,139

Net Loss Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net Income (Loss)	$ (13,696)	$ (15,094)	$ (68,949)	$ (42,494)
Net loss attributable to common stockholders for basic loss per share	(13,696)	(15,094)	(68,949)	(42,494)
Net loss attributable to common stockholders for diluted loss per share	$ (13,696)	$ (15,094)	$ (68,949)	$ (42,494)
Denominator:
Weighted average number of common shares outstanding - basic	26,987,182	11,323,909	18,240,455	11,323,909
Weighted average number of common shares outstanding - diluted	26,987,182	11,323,909	18,240,455	11,323,909
Net loss per share attributable to common stockholders - basic	$ (0.51)	$ (1.33)	$ (3.78)	$ (3.75)
Net loss per share attributable to common stockholders - diluted	$ (0.51)	$ (1.33)	$ (3.78)	$ (3.75)
Exercise of the pre-funded warrants	1,421,768	1,421,768	1,421,768	1,421,768

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (13,696)	$ (15,094)	$ (68,949)	$ (42,494)
Other comprehensive income:
Foreign currency translation adjustments	346	596	632	957
Comprehensive loss	$ (13,350)	$ (14,498)	$ (68,317)	$ (41,537)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accrued Expenses
Clinical trials	$ 2,134	$ 2,093
Professional fees	200	533
Payroll and related expenses	2,436	2,526
Accrued expenses	$ 4,770	$ 5,152

Net Loss Per Share - Antidilutive (Details) - shares	3 Months Ended		9 Months Ended
Net Loss Per Share - Antidilutive (Details) - shares	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	7,297,018	5,097,398	7,297,018	5,097,398
Restricted stock units to purchase common stock
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	285,000	358,561	285,000	358,561
Options to purchase common stock
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	3,425,647	1,193,270	3,425,647	1,193,270
Warrants to purchase common stock
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	3,586,371	3,545,567	3,586,371	3,545,567

Nature of Business, Basis of Presentation and Liquidity

9 Months Ended

Sep. 30, 2023

Nature of Business, Basis of Presentation and Liquidity

Nature of Business, Basis of Presentation and Liquidity

1. Nature of Business, Basis of Presentation and Liquidity

Nature of Business

Leap Therapeutics, Inc. was incorporated in the state of Delaware on January 3, 2011. During 2015, HealthCare Pharmaceuticals Pty Ltd. was formed and is a wholly owned subsidiary of the Company.

On December 15, 2021, Leap Securities Corp. was formed and is a wholly owned subsidiary of the Company.

On January 17, 2023, the Company entered into a merger agreement with Flame Biosciences, Inc., a privately held, biotechnology corporation (“Flame”), whereby Flame became a wholly owned subsidiary of the Company under the name Flame Biosciences, LLC.

The Company is a biopharmaceutical company developing novel biomarker-targeted antibody therapies designed to treat patients with cancer by inhibiting fundamental tumor-promoting pathways, targeting cancer-specific cell surface molecules, and harnessing the immune system to attack cancer cells. The Company’s strategy is to identify, acquire, and develop molecules that will rapidly translate into high impact therapeutics that generate durable clinical benefit and enhanced patient outcomes. The Company’s lead clinical stage program is DKN-01, a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1. The Company is currently studying DKN-01 in multiple ongoing clinical trials in patients with esophagogastric cancer, gynecologic cancers, or colorectal cancer. Its second clinical stage program is FL-301, a monoclonal antibody that targets cells that express Claudin18.2 on their cell surface. The Company also has two preclinical antibody programs, FL-302 and FL-501.

In January 2020, the Company entered into an Option and License Agreement with BeiGene, Ltd., or BeiGene, which granted BeiGene an option to obtain an exclusive license from the Company that would grant to BeiGene the right to develop and commercialize DKN-01 in Asia (excluding Japan), Australia, and New Zealand. In March 2023, BeiGene notified the Company that it did not intend to exercise its option, and the agreement is continuing as a clinical collaboration.

Basis of Presentation

The accompanying condensed consolidated financial statements as of September 30, 2023, and for the three and nine months ended September 30, 2023 and 2022 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 24, 2023.

The condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments which are necessary for the fair presentation of the Company’s financial position as of September 30, 2023, statements of operations and statements of comprehensive loss for the three and nine months ended September 30, 2023, and 2022 and statements of cash flows for the nine months ended September 30, 2023, and 2022. Such adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023.

Liquidity

Since inception, the Company has been engaged in organizational activities, including raising capital, and research and development activities. The Company does not yet have a product that has been approved by the FDA, has not generated any product

sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the Company’s future operations are dependent on the success of the Company’s efforts to raise additional capital, its research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company’s products.

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of September 30, 2023, the Company had cash and cash equivalents of $80,743. Additionally, the Company had an accumulated deficit of $387,117 at September 30, 2023, and during the nine months ended September 30, 2023, the Company incurred a net loss of $68,949. The Company expects to continue to generate operating losses for the foreseeable future. The Company believes that its cash and cash equivalents of $80,743 as of September 30, 2023 will be sufficient to fund its operating expenses for at least the next 12 months from issuance of these financial statements.

In addition, to support its future operations, the Company will likely seek additional funding through public or private equity financings or government programs and will seek funding or development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If the Company does not obtain additional funding or development program cost-sharing, or exceeds its current spending forecasts or fails to receive the research and development tax incentive payment, the Company has the ability and would be forced to delay, reduce or eliminate certain clinical trials or research and development programs, reduce or eliminate discretionary operating expenses, and delay company and pipeline expansion, any of which could adversely affect its business prospects. The inability to obtain funding, as and when needed, could have a negative impact on the Company’s financial condition and ability to pursue its business strategies.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation.

Use of Estimates

The presentation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Research and development incentive income and receivable

The Company recognizes other income from Australian research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The research and development incentive is one of the key elements of the Australian government’s support for Australia’s innovation system and is supported by legislative law primarily in the form of the Australian Income Tax Assessment Act 1997, as long as eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive regime described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time.

Under the program, a percentage of eligible research and development expenses incurred by the Company through its subsidiary in Australia are reimbursed. The percentage was 43.5% for the year ended December 31, 2022 and for the nine months ended September 30, 2023.

The research and development incentive receivable represents an amount due in connection with the above program. The Company recorded a research and development incentive receivable of $753 and $2,099 as of September 30, 2023 and December 31, 2022, respectively, in the condensed consolidated balance sheets and other income from Australian research and development incentives of $554 and $652, respectively, for the three months ended September 30, 2023 and 2022, and $1,124 and $1,276 for the nine months ended September 30, 2023 and 2022, respectively, in the condensed consolidated statements of operations related to refundable research and development incentive program payments in Australia.

The following table shows the change in the research and development incentive receivable from January 1, 2022 to September 30, 2023 (in thousands):


Balance at January 1, 2022	$	1,189
Australian research and development incentive income		2,051
Cash received for 2021 eligible expenses		(1,064)
Foreign currency translation		(77)
Balance at December 31, 2022		2,099
Australian research and development incentive income		1,124
Cash received for 2022 eligible expenses		(2,333)
Foreign currency translation		(137)
Balance at September 30, 2023	$	753

Foreign Currency Translation

The financial statements of the Company’s Australian subsidiary are measured using the local currency as the functional currency. Assets and liabilities of this subsidiary are translated into U.S. dollars at an exchange rate as of the consolidated balance sheet date. Equity is translated at historical exchange rates. Revenues and expenses are translated into U.S. dollars at average rates of exchange in effect during the period. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders’ equity. Realized and unrealized foreign currency transaction gains and losses are included in the results of operations.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. All cash and cash equivalents are held in United States or Australian financial institutions and money market funds. At times, the Company may maintain cash balances in excess of the federally insured amount of $250 per depositor, per insured bank, for each account ownership category. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the year ended December 31, 2022 or for the nine months ended September 30, 2023.

Deposits

Deposits

As of September 30, 2023 and December 31, 2022, there were $913 and $1,108, respectively, of deposits made by the Company with certain service providers that are to be applied to future payments due under the service agreements or returned to the Company if not utilized, which were recorded in the condensed consolidated balance sheets.

Warrants

Warrants

The Company will recognize on a prospective basis the value of the effect of the down round feature in the warrants to purchase shares of common stock that were issued in a private placement in November 2017 (the “2017 Warrants”) and in the warrants that were issued in a private placement in March 2020 (the “March 2020 Coverage Warrants”) when it is triggered (i.e., when the exercise price is adjusted downward). This value is measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature)

using the reduced exercise price. The value of the effect of the down round feature will be treated as a dividend and a reduction to income available to common stockholders in the basic EPS calculation.

The Company initially classified the warrants that were exercisable for shares for Series X Non-Voting Convertible Preferred Stock (the “January 2023 Series X Preferred Stock Warrants”) as a liability on its condensed consolidated balance sheet on January 17, 2023 and subsequently remeasured the warrant liability to fair value at each reporting date until the conversion of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”) into common stock, which occurred on June 21, 2023. Changes in the fair value of the warrant liability were recognized as gains (losses) in the Company’s condensed consolidated statement of operations.

During the nine months ended September 30, 2023, in connection with obtaining Stockholder Approval to convert shares of Series X Preferred Stock into shares of common stock (“Stockholder Approval”), the January 2023 Series X Preferred Stock Warrants were reclassified from liability to equity.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

●

Level 1—Quoted prices in active markets for identical assets or liabilities.

●

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

●

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

A summary of the assets carried at fair value in accordance with the hierarchy defined above is as follows (in thousands):


	Total		Level 1		Level 2		Level 3
September 30, 2023
Assets:
Cash equivalents	$	49,609	$	49,609	$	—	$	—
Total assets	$	49,609	$	49,609	$	—	$	—

December 31, 2022
Assets:
Cash equivalents	$	62,074	$	62,074	$	—	$	—
Total assets	$	62,074	$	62,074	$	—	$	—

Cash equivalents of $49,609 and $62,074 as of September 30, 2023 and December 31, 2022, respectively, consisted of overnight investments and money market funds which are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

The carrying values of the research and development incentive receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these assets and liabilities.

Leases

Leases

The Company accounts for leases in accordance with Accounting Standards Codification, or ASC, Topic 842, Leases.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. The Company has determined that the rate implicit in the lease is not determinable and the Company does not have borrowings with similar terms and collateral. Therefore, the Company considered a variety of factors, including observable debt yields from comparable companies and the volatility in the debt market for securities with similar terms, in determining that 8% was reasonable to use as the incremental borrowing rate for purposes of the calculation of lease liabilities.

In accordance with the guidance in Topic 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components.

Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the contract consideration to the lease component only. The lease component results in an operating right-of-use asset being recorded on the consolidated balance sheets and amortized such that lease expense is recorded on a straight line basis over the term of the lease.

Net Loss per Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential shares of common stock, including the assumed exercise of stock options and warrants.

Reverse Stock Split

Reverse Stock Split

On June 21, 2023, the Company effected a one-for-ten reverse stock split of its issued and outstanding shares of common stock, which also adjusted the conversion ratio of its Series X Preferred Stock such that each share of Series X Preferred Stock became convertible into 100 shares of common stock. Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. All fractional shares resulting from the reverse stock split were paid in cash.

Subsequent Events

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements please refer to Note 2, “Summary of Significant Accounting Policies” in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2022.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 11,503	$ 12,102	$ 61,549	$ 33,931
General and administrative	3,330	3,186	10,672	8,889
Total operating expenses	14,833	15,288	72,221	42,820
Loss from operations	(14,833)	(15,288)	(72,221)	(42,820)
Interest income	1,084	360	3,089	404
Interest expense		(11)		(49)
Australian research and development incentives	554	652	1,124	1,276
Foreign currency loss	(501)	(807)	(953)	(1,305)
Change in fair value of Series X preferred stock warrant liability			12
Net loss attributable to common stockholders	$ (13,696)	$ (15,094)	$ (68,949)	$ (42,494)
Net loss per share
Basic (in dollars per share)	$ (0.51)	$ (1.33)	$ (3.78)	$ (3.75)
Diluted (in dollars per share)	$ (0.51)	$ (1.33)	$ (3.78)	$ (3.75)
Weighted average common shares outstanding
Basic (in shares)	26,987,182	11,323,909	18,240,455	11,323,909
Diluted (in shares)	26,987,182	11,323,909	18,240,455	11,323,909

Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023	Jun. 21, 2023	Jan. 31, 2023
Warrants
Exercise price of warrant	$ 6.78
Number of Common Shares Issuable	5,008,139
Change in fair value of warrant liability	$ 12
Series X Preferred Stock
Warrants
Conversion ratio		100
January 23 2017 Warrants
Warrants
Exercise price of warrant	$ 0.10
Number of Common Shares Issuable	5,450
2017 Warrants
Warrants
Exercise price of warrant	$ 10.55
Number of Common Shares Issuable	250,227
2019 Warrants
Warrants
Exercise price of warrant	$ 19.50
Number of shares redeemed	10,000
Purchase price per share	$ 2.90
Number of Common Shares Issuable	690,813
March 2020 Pre-funded Warrants
Warrants
Exercise price of warrant	$ 0.01
Number of Common Shares Issuable	824,716
March 2020 Coverage Warrants
Warrants
Exercise price of warrant	$ 21.10
Number of Common Shares Issuable	2,594,501
September 2021 Pre-funded Warrants
Warrants
Exercise price of warrant	$ 0.01
Number of Common Shares Issuable	591,602
January 2023 Common Stock Warrants
Warrants
Warrant to purchase shares of common stock			6,530
Exercise price of warrant	$ 6.78		$ 6.78
Number of Common Shares Issuable	50,830
January 2023 Series X Preferred Stock Warrants \| Series X Preferred Stock
Warrants
Warrant to purchase shares of common stock			443
Exercise price of warrant			$ 6.78
Conversion ratio			100

Common Stock

9 Months Ended

Sep. 30, 2023

Common Stock

Common Stock

7. Common Stock

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Board of Directors, if any, subject to the preferential dividend rights of the preferred stockholders. Through September 30, 2023, no dividends have been declared for shares of common stock.

Acquisition of Flame – January 2023

On January 17, Leap acquired 100% of the outstanding equity of Flame. Pursuant to the Merger, Leap issued to Flame Stockholders 1,972,901 shares of common stock. The Company also issued Series X Preferred Stock to Flame Stockholders pursuant to the Merger (see Note 3).

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-16

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

Manufacturing Agreements—The Company is party to manufacturing agreements with vendors to manufacture DKN-01, its lead product candidate, for use in clinical trials. As of September 30, 2023, there were $469 noncancelable commitments under these agreements.

License and Service Agreement—On January 3, 2011, the Company entered into a license agreement with Eli Lilly and Company (“Lilly”), a shareholder, to grant a license to the Company for certain intellectual property rights relating to pharmaceutically active compounds that may be useful in the treatment of bone healing, cancer and, potentially, other medical conditions. As defined in the license agreement, the Company would be required to pay royalties to Lilly based upon a percentage in the low single digits of net sales of developed products, if and when achieved. However, there can be no assurance that clinical or commercialization success of developed products will occur, and no royalties have been paid or accrued through September 30, 2023.

License Agreement—On May 28, 2015, the Company entered into a license agreement with Lonza Sales AG (“Lonza”), pursuant to which Lonza granted the Company a world-wide, non-exclusive license for certain intellectual property relating to a gene expression system for manufacturing DKN-01. As defined in the license agreement, the Company would be required to pay royalties to Lonza based on a percentage in the low single digits of net sales of DKN-01, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur, and no royalties have been paid or accrued through September 30, 2023.

Legal Proceedings—At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings. As of the date of this report, the Company is not currently a party to any material legal proceedings.

Indemnification Agreements—In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of September 30, 2023 or December 31, 2022.

Acquisition of Flame Biosciences - Net assets acquired (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jan. 17, 2023	Dec. 31, 2022
Acquisition of Flame Biosciences
Cash and cash equivalents	$ 80,743		$ 65,500
Flame
Acquisition of Flame Biosciences
Acquired IPR&D		$ 29,582
Cash and cash equivalents	$ 29,582	50,362
Accounts payable and accrued liabilities		(928)
Total acquisition value		$ 79,016

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Net Loss Per Share

Schedule of basic and diluted net loss per share

Basic and diluted net loss per share for the three and nine months ended September 30, 2023 and 2022 was calculated as follows (in thousands except share and per share amounts).


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(13,696)	$	(15,094)	$	(68,949)	$	(42,494)
Net loss attributable to common stockholders for basic and diluted loss per share	$	(13,696)	$	(15,094)	$	(68,949)	$	(42,494)

Denominator:
Weighted average number of common shares outstanding – basic and diluted		26,987,182		11,323,909		18,240,455		11,323,909
Net loss per share attributable to common stockholders – basic and diluted	$	(0.51)	$	(1.33)	$	(3.78)	$	(3.75)

Schedule of potentially anti-dilutive securities excluded from calculation of diluted net loss per share


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Restricted stock units to purchase common stock	285,000	358,561	285,000	358,561
Options to purchase common stock	3,425,647	1,193,270	3,425,647	1,193,270
Warrants to purchase common stock	3,586,371	3,545,567	3,586,371	3,545,567
	7,297,018	5,097,398	7,297,018	5,097,398

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Common Stock (Details) $ in Thousands		9 Months Ended
Common Stock (Details) $ in Thousands	Jan. 17, 2023 shares	Sep. 30, 2023 USD ($) Vote
Common Stock
Number of vote on common shares \| Vote		1
Dividend declared \| $		$ 0
Flame
Common Stock
Percentage of outstanding ordinary shares acquired	100.00%
Number of shares issued \| shares	1,972,901

Nature of Business, Basis of Presentation and Liquidity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Liquidity
Cash and cash equivalents	$ 80,743		$ 80,743		$ 65,500
Accumulated deficit	(387,117)		(387,117)		$ (318,168)
Net Income (Loss)	$ (13,696)	$ (15,094)	$ (68,949)	$ (42,494)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Acquisition of Flame Biosciences (Details)			1 Months Ended	9 Months Ended
Acquisition of Flame Biosciences (Details)	Jun. 21, 2023 shares	Jan. 17, 2023 USD ($) shares	Jan. 31, 2023 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($)
Acquisition of Flame Biosciences
Reverse stock split, conversion ratio	0.1
Cash \| $				$ 80,743,000	$ 65,500,000
Exercise price per share \| $ / shares				$ 6.78
Change in fair value of warrant liability \| $				$ 12,000
January 2023 Common Stock Warrants
Acquisition of Flame Biosciences
Shares issuable upon exercise of warrants			6,530
Exercise price per share \| $ / shares			$ 6.78	$ 6.78
Series X Preferred Stock
Acquisition of Flame Biosciences
Conversion ratio	100
Series X Preferred Stock \| January 2023 Series X Preferred Stock Warrants
Acquisition of Flame Biosciences
Shares issuable upon exercise of warrants			443
Conversion ratio			100
Exercise price per share \| $ / shares			$ 6.78
Flame
Acquisition of Flame Biosciences
Percentage of outstanding ordinary shares acquired		100.00%
Number of shares issued		1,972,901
Holdback shares \| $		15,604
Number of common stock held back upon conversion of Series X Preferred shares		1,560,400
Purchase price \| $		$ 79,016,000
Working capital items \| $		928,000
Cash \| $		50,362,000		$ 29,582,000
Direct and incremental costs of the asset acquisition \| $		$ 1,393,000
Percentage of contingent merger consideration on after tax net proceeds		80.00%
Flame \| January 2023 Common Stock Warrants
Acquisition of Flame Biosciences
Shares issuable upon exercise of warrants		6,530
Adjustment for amortization \| $			$ 6.78
Flame \| January 2023 Series X Preferred Stock Warrants
Acquisition of Flame Biosciences
Conversion ratio				100
Reverse stock split, conversion ratio			0.1
Flame \| Series X Non Voting Convertible Preferred Stock
Acquisition of Flame Biosciences
Number of shares issued		136,248
Flame \| Series X Preferred Stock
Acquisition of Flame Biosciences
Conversion ratio		100		100
Reverse stock split, conversion ratio		0.1
Flame \| Series X Preferred Stock \| January 2023 Common Stock Warrants
Acquisition of Flame Biosciences
Shares issuable upon exercise of warrants			6,530
Flame \| Series X Preferred Stock \| January 2023 Series X Preferred Stock Warrants
Acquisition of Flame Biosciences
Shares issuable upon exercise of warrants		443		443

Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Leases
Additional right of use asset					$ 609
Additional operating lease liability					609
Right of use assets, net	$ 363		$ 363		$ 669
Lease liability	369		369
Rent expense	$ 113	$ 116	$ 341	$ 336

Summary of Significant Accounting Policies (Details) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 21, 2023 shares	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Research and development incentive income and receivable
Research and development expenses reimbursed (as a percent)				43.50%		43.50%
Research and development incentive receivable		$ 753		$ 753		$ 2,099
Research and development incentive income and receivable
Balance at the beginning of the period				2,099	$ 1,189	1,189
Australian research and development incentive income		554	$ 652	1,124	$ 1,276	2,051
Cash received for eligible expenses				(2,333)		(1,064)
Foreign currency translation				(137)		(77)
Balance at the end of the period		753		753		2,099
Other Assets
Deposits		$ 913		$ 913		1,108
Incremental borrowing rate		8.00%		8.00%
Reverse stock split, conversion ratio	0.1
Series X Preferred Stock
Other Assets
Conversion ratio \| shares	100
License and Service
Other Assets
Deposits		$ 913		$ 913		$ 1,108

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases

Schedule of future lease payments

Future lease payments under non-cancelable operating leases as of September 30, 2023 are detailed as follows:


Future Operating Lease Payments
2023		113
2024		268
Total Lease Payments		381
Less: imputed interest		(12)
Total operating lease liabilities	$	369

Equity Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2023

Equity Incentive Plans

Schedule of stock option activity under the Equity Plans


		Weighted
		Average	Weighted	Aggregate
		Exercise Price	Average Remaining	Intrinsic
	Options	Per Share	Life in Years	Value
Outstanding at December 31, 2022	1,191,715	35.94	7.47	—
Granted	2,318,500	2.70
Forfeited	(84,568)	17.29
Outstanding at September 30, 2023	3,425,647	13.90	8.74	—
Options exercisable at September 30, 2023	1,108,400	34.72	6.80	—
Options vested and expected to vest at September 30, 2023	3,425,647	13.90	8.74	—

Schedule of assumptions used to determine grant-date fair value of stock options


	Nine Months Ended September 30,
	2023		2022

Expected volatility	90.37	%	82.70	%
Weighted average risk-free interest rate	4.05	%	3.06	%
Expected dividend yield	0.00	%	0.00	%
Expected term (in years)	6.48		6.48

Schedule of RSU activity under the 2016 Plan


		Weighted
		Average Grant
	Number of Shares	Date Fair Value
Outstanding at December 31, 2022	358,560	$	18.90
Vested	(66,060)	$	14.20
Forfeited	(7,500)	$	19.40
Outstanding at September 30, 2023	285,000	$	19.92

Schedule of recognized stock-based compensation expense related to the issuance of stock option awards and RSUs to employees and non-employees in the condensed consolidated statements of operations


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Research and development	$	737	$	634	$	2,086	$	1,805
General and administrative		563		619		1,789		1,918
Total	$	1,300	$	1,253	$	3,875	$	3,723

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital.	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Series X Non Voting Convertible Preferred Stock	Total
Balance at the beginning of the period (in shares) at Dec. 31, 2021	8,831,845
Balance at the beginning of the period at Dec. 31, 2021	$ 9	$ 371,717	$ (267)	$ (263,572)		$ 107,887
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment			957			957
Stock-based compensation		3,723				3,723
Net Income (Loss)				(42,494)		(42,494)
Issuance of common stock upon exercise of prefunded warrants	$ 1	(1)
Issuance of common stock upon exercise of prefunded warrants (in shares)	1,070,292
Balance at the end of the period at Sep. 30, 2022	$ 10	375,439	690	(306,066)		70,073
Balance at the end of the period (in shares) at Sep. 30, 2022	9,902,137
Balance at the beginning of the period (in shares) at Jun. 30, 2022	8,831,845
Balance at the beginning of the period at Jun. 30, 2022	$ 9	374,187	94	(290,972)		83,318
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment			596			596
Stock-based compensation		1,253				1,253
Net Income (Loss)				(15,094)		(15,094)
Issuance of common stock upon exercise of prefunded warrants	$ 1	(1)
Issuance of common stock upon exercise of prefunded warrants (in shares)	1,070,292
Balance at the end of the period at Sep. 30, 2022	$ 10	375,439	690	(306,066)		70,073
Balance at the end of the period (in shares) at Sep. 30, 2022	9,902,137
Balance at the beginning of the period (in shares) at Dec. 31, 2022	9,902,137
Balance at the beginning of the period at Dec. 31, 2022	$ 10	376,896	128	(318,168)		58,866
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment			632			632
Stock-based compensation		3,875				3,875
Net Income (Loss)				(68,949)		(68,949)
Conversion of Series X preferred stock to common stock	$ 14	67,702				67,716
Conversion of Series X preferred stock to common stock (in shares)	13,624,800
Issuance of Series X Preferred Stock in connection with Flame merger					$ 67,715
Issuance of Series X Preferred Stock in connection with Flame merger (in shares)					136,248
Issuance of common stock in connection with Flame merger	$ 2	9,803				9,805
Issuance of common stock in connection with Flame merger (in shares)	1,972,901
Issuance of common stock warrants in connection with Flame merger		13				13
Redemption of 2019 Warrants		(29)				(29)
Issuance of common stock upon vest of restricted stock units (in shares)	66,061
Conversion of Series X preferred stock to common stock					$ (67,715)
Conversion of Series X preferred stock to common stock (in shares)					(136,248)
Reclassification of Series X preferred stock warrants to equity		78				78
Fractional value paid in cash		1				1
Fractional shares paid in cash (in shares)	(485)
Balance at the end of the period at Sep. 30, 2023	$ 26	458,339	760	(387,117)		72,008
Balance at the end of the period (in shares) at Sep. 30, 2023	25,565,414
Balance at the beginning of the period (in shares) at Jun. 30, 2023	25,565,414
Balance at the beginning of the period at Jun. 30, 2023	$ 26	457,038	414	(373,421)		84,057
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment			346			346
Stock-based compensation		1,300				1,300
Net Income (Loss)				(13,696)		(13,696)
Fractional value paid in cash		1				1
Balance at the end of the period at Sep. 30, 2023	$ 26	$ 458,339	$ 760	$ (387,117)		$ 72,008
Balance at the end of the period (in shares) at Sep. 30, 2023	25,565,414

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	240,000,000	240,000,000
Common stock, issued shares	25,565,414	9,902,137
Common stock, outstanding shares	25,565,414	9,902,137

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies

Schedule of change in the research and development incentive receivable

The following table shows the change in the research and development incentive receivable from January 1, 2022 to September 30, 2023 (in thousands):


Balance at January 1, 2022	$	1,189
Australian research and development incentive income		2,051
Cash received for 2021 eligible expenses		(1,064)
Foreign currency translation		(77)
Balance at December 31, 2022		2,099
Australian research and development incentive income		1,124
Cash received for 2022 eligible expenses		(2,333)
Foreign currency translation		(137)
Balance at September 30, 2023	$	753

Schedule of assets and liabilities carried at fair value in accordance with the hierarchy

A summary of the assets carried at fair value in accordance with the hierarchy defined above is as follows (in thousands):


	Total		Level 1		Level 2		Level 3
September 30, 2023
Assets:
Cash equivalents	$	49,609	$	49,609	$	—	$	—
Total assets	$	49,609	$	49,609	$	—	$	—

December 31, 2022
Assets:
Cash equivalents	$	62,074	$	62,074	$	—	$	—
Total assets	$	62,074	$	62,074	$	—	$	—

Equity Incentive Plans

9 Months Ended

Sep. 30, 2023

Equity Incentive Plans

Equity Incentive Plans

8. Equity Incentive Plans

Equity Incentive Plans

In September 2012, the Company adopted the 2012 Equity Incentive Plan, as amended, which provides designated employees of the Company and its affiliates, certain consultants and advisors who perform services for the Company and its affiliates, and nonemployee members of the Board of Directors of the Company and its affiliates with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards. During the year ended December 31, 2022, the 2012 Equity Plan expired.

On January 20, 2017, the Company’s stockholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). Beginning on January 1, 2018, the number of shares of common stock authorized for issuance pursuant to the 2016 Plan was increased each January 1 by an amount equal to 4% of the Company’s outstanding common stock as of the end of the immediately preceding calendar year or such lesser amount as determined by the compensation committee of the Company’s Board of Directors.

On June 16, 2022, the Company’s stockholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for a total of 750,000 new shares of the Company’s common stock to be granted. In addition, on June 16, 2023, stockholders approved 2,250,000 new shares of the Company’s common stock to be added to the 2022 Plan for future issuance.

As of September 30, 2023, there were 952,242 shares available for grant under the Company’s equity incentive plans.

A summary of stock option activity under the Equity Plans is as follows:


		Weighted
		Average	Weighted	Aggregate
		Exercise Price	Average Remaining	Intrinsic
	Options	Per Share	Life in Years	Value
Outstanding at December 31, 2022	1,191,715	35.94	7.47	—
Granted	2,318,500	2.70
Forfeited	(84,568)	17.29
Outstanding at September 30, 2023	3,425,647	13.90	8.74	—
Options exercisable at September 30, 2023	1,108,400	34.72	6.80	—
Options vested and expected to vest at September 30, 2023	3,425,647	13.90	8.74	—

The grant date fair value of the options granted during the nine months ended September 30, 2023 and 2022 was estimated at the date of grant using the Black-Scholes option valuation model. The expected life was estimated using the “simplified” method as defined by the SEC’s Staff Accounting Bulletin 107, Share-Based Payment. The expected volatility was based on the historical volatility of the Company. The risk-free interest rate was based on the continuous rates provided by the U.S. Treasury with a term approximating the expected life of the option. The expected dividend yield was 0% because the Company does not expect to pay any dividends for the foreseeable future. The Company elected the straight-line attribution method in recognizing the grant date fair value of options issued over the requisite service periods of the awards, which are generally the vesting periods.

The weighted average grant date fair value for the stock options granted during the nine months ended September 30, 2023 and 2022 was $2.09 and $11.07 per share, respectively.

The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and directors during the nine months ended September 30, 2023 and 2022 were as follows, presented on a weighted average basis:


	Nine Months Ended September 30,
	2023		2022

Expected volatility	90.37	%	82.70	%
Weighted average risk-free interest rate	4.05	%	3.06	%
Expected dividend yield	0.00	%	0.00	%
Expected term (in years)	6.48		6.48

Stock options generally vest over a three or four year period, as determined by the compensation committee of the Board of Directors at the time of grant. The options expire 10 years from the grant date. As of September 30, 2023, there was approximately $6,607 of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average period of approximately 2.31 years.

Restricted Stock Units

During the nine months ended September 30, 2022, the Company granted 265,000 Restricted Stock Units (“RSUs”) to employees that will cliff vest and will be settled after three years of continuous service, or upon a change of control of the Company, whichever is earlier, pursuant to the 2016 Plan. The Company did not grant any RSUs during the nine months ended September 30, 2023.

The following table presents RSU activity under the 2016 Plan during the nine months ended September 30, 2023:


		Weighted
		Average Grant
	Number of Shares	Date Fair Value
Outstanding at December 31, 2022	358,560	$	18.90
Vested	(66,060)	$	14.20
Forfeited	(7,500)	$	19.40
Outstanding at September 30, 2023	285,000	$	19.92

As of September 30, 2023, there were 285,000 shares outstanding covered by RSUs that are expected to vest with a weighted average grant date fair value of $19.92 per share and an aggregate grant date fair value of approximately $5,677. As of September 30, 2023, there was approximately $2,316 of unrecognized compensation costs related to RSUs granted to employees, which are expected to be recognized as expense over a remaining weighted average period of 1.33 years.

The Company recognized stock-based compensation expense related to the issuance of stock option awards and RSUs to employees and non-employees in the condensed consolidated statements of operations during the three and nine months ended September 30, 2023 and 2022 as follows:

Stock Based Compensation Expense


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Research and development	$	737	$	634	$	2,086	$	1,805
General and administrative		563		619		1,789		1,918
Total	$	1,300	$	1,253	$	3,875	$	3,723

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 80,743	$ 65,500
Research and development incentive receivable	753	2,099
Prepaid expenses and other current assets	265	351
Total current assets	81,761	67,950
Property and equipment, net	9	20
Right of use assets, net	363	669
Deferred costs		576
Other long term assets		30
Deposits	913	1,108
Total assets	83,046	70,353
Current liabilities:
Accounts payable	5,899	5,657
Accrued expenses	4,770	5,152
Lease liability - current portion	369	416
Total current liabilities	11,038	11,225
Non current liabilities:
Lease liability, net of current portion		262
Total liabilities	11,038	11,487
Stockholders' equity:
Common stock, $0.001 par value; 240,000,000 shares authorized; 25,565,414 and 9,902,137 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	26	10
Additional paid-in capital	458,339	376,896
Accumulated other comprehensive income	760	128
Accumulated deficit	(387,117)	(318,168)
Total stockholders' equity	72,008	58,866
Total liabilities and stockholders' equity	$ 83,046	$ 70,353

Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

5. Leases

The Company has an operating lease for real estate in the United States and does not have any finance leases. The Company’s leases may contain options to renew and extend lease terms and options to terminate leases early. Reflected in the right-of-use asset and lease liability on the Company’s consolidated balance sheets are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain to not exercise.

The Company’s existing lease expires in July 2024 and includes variable lease and non-lease components that are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. Such payments primarily include common area maintenance charges and increases in rent payments that are driven by factors such as future changes in an index (e.g., the Consumer Price Index).

In calculating the present value of future lease payments, the Company utilized its incremental borrowing rate based on the lease term. The Company has elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. This will potentially result in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability for leases being greater than if the policy election was not applied. The Company has existing net leases in which the non-lease components (e.g. common area maintenance, maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. During the year ended December 31, 2022, the Company extended the term of its operating lease and recorded an additional right-of-use asset and lease liability of $609. As of September 30, 2023, a right-of-use asset of $363 and lease liability of $369 are reflected on the condensed consolidated balance sheet. The Company recorded rent expense of $113 and $116, respectively, during the three months ended September 30, 2023 and 2022, and $341 and $336, respectively, during the nine months ended September 30, 2023 and 2022.

Future lease payments under non-cancelable operating leases as of September 30, 2023 are detailed as follows:


Future Operating Lease Payments
2023		113
2024		268
Total Lease Payments		381
Less: imputed interest		(12)
Total operating lease liabilities	$	369

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

Use of Estimates

Research and development incentive income and receivable

The following table shows the change in the research and development incentive receivable from January 1, 2022 to September 30, 2023 (in thousands):


Balance at January 1, 2022	$	1,189
Australian research and development incentive income		2,051
Cash received for 2021 eligible expenses		(1,064)
Foreign currency translation		(77)
Balance at December 31, 2022		2,099
Australian research and development incentive income		1,124
Cash received for 2022 eligible expenses		(2,333)
Foreign currency translation		(137)
Balance at September 30, 2023	$	753

Foreign Currency Translation

Concentration of Credit Risk

Deposits

Warrants

Fair Value of Financial Instruments

●

Level 1—Quoted prices in active markets for identical assets or liabilities.

●

A summary of the assets carried at fair value in accordance with the hierarchy defined above is as follows (in thousands):


	Total		Level 1		Level 2		Level 3
September 30, 2023
Assets:
Cash equivalents	$	49,609	$	49,609	$	—	$	—
Total assets	$	49,609	$	49,609	$	—	$	—

December 31, 2022
Assets:
Cash equivalents	$	62,074	$	62,074	$	—	$	—
Total assets	$	62,074	$	62,074	$	—	$	—

Leases

The Company accounts for leases in accordance with Accounting Standards Codification, or ASC, Topic 842, Leases.

Net Loss per Share

Reverse Stock Split

Subsequent Events

Recent Accounting Pronouncements

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Accrued Expenses

Schedule of accrued expenses


	September 30,		December 31,
	2023		2022
Clinical trials	$	2,134	$	2,093
Professional fees		200		533
Payroll and related expenses		2,436		2,526
Accrued expenses	$	4,770	$	5,152

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (68,949)	$ (42,494)
Adjustments to reconcile net loss to net cash used in operating activities:
In-process research and development costs acquired in connection with the acquistion of Flame	29,582
Depreciation expense	11	12
Change in right-of-use asset	306	302
Stock-based compensation expense	3,875	3,723
Foreign currency transaction loss	953	1,305
Changes in operating assets and liabilities:
Prepaid expenses and other assets	83	382
Research and development incentive receivable	1,279	(212)
Accounts payable and accrued expenses	(1,006)	2,167
Lease liability	(308)	(303)
Other assets	801	(912)
Net cash used in operating activities	(33,373)	(36,030)
Cash flows from investing activities:
Cash acquired in connection with the acquistion of Flame	50,362
Payment of direct and incremental costs of the asset acquisition	(1,393)
Net cash provided by investing activities	48,969
Cash flows from financing activities:
Payment of redemption of 2019 warrants	(29)
Payment of fractional shares	(1)
Payment of deferred costs		(210)
Net cash used in financing activities	(30)	(210)
Effect of exchange rate changes on cash and cash equivalents	(323)	(368)
Net increase (decrease) in cash and cash equivalents	15,243	(36,608)
Cash and cash equivalents at beginning of period	65,500	114,916
Cash and cash equivalents at end of period	80,743	78,308
Supplemental disclosure of non-cash financing activities:
Issuance and conversion of Series X Preferred Stock issued in connection with the acquisition of Flame to common stock	67,715
Reclassification of Series X Preferred Stock Warrants from liability to equity	78
Issuance of common stock in connection with the acquisition of Flame	9,805
Issuance of warrants for the purchase of common stock in connection with the acquisition of Flame	13
Net liabilities assumed from acquistion of Flame	$ 928
Remeasurement of right-of-use asset and lease liability		$ 609

Acquisition of Flame Biosciences - Fair value assigned to each component of the purchase consideration (Details) - Flame $ in Thousands	Jan. 17, 2023 USD ($) shares
Acquisition of Flame Biosciences
Equivalent common shares	15,648,531
Direct and incremental costs of the asset acquisition \| $	$ 1,393
Total \| $	$ 79,016
Common stock
Acquisition of Flame Biosciences
Number of shares	1,972,901
Equivalent common shares	1,972,901
Fair Value (in thousands) \| $	$ 9,805
Common stock \| Warrant Liability
Acquisition of Flame Biosciences
Number of shares	6,530
Equivalent common shares	6,530
Fair Value (in thousands) \| $	$ 13
Series X Preferred Shares
Acquisition of Flame Biosciences
Number of shares	136,248
Equivalent common shares	13,624,800
Fair Value (in thousands) \| $	$ 67,715
Series X Preferred Shares \| Warrant Liability
Acquisition of Flame Biosciences
Number of shares	443
Equivalent common shares	44,300
Fair Value (in thousands) \| $	$ 90

Acquisition of Flame Biosciences (Tables)

9 Months Ended

Sep. 30, 2023

Acquisition of Flame Biosciences

Summary of net assets acquired based on their estimated fair values as of acquisition date

The following table summarizes the net assets acquired based on their estimated fair values as of January 17, 2023 (in thousands):


Acquired IPR&D	$	29,582
Cash and cash equivalents		50,362
Accounts payable and accrued liabilities		(928)
Total acquisition value	$	79,016

Schedule of fair value assigned to each component of the purchase consideration, including direct costs of the acquisition of $1,393, as of the Effective Date


		Equivalent common
	Number of shares	shares	Fair Value
Leap common stock (par value $0.001 per share)	1,972,901	1,972,901	$	9,805
Leap Series X Preferred Stock (100:1)	136,248	13,624,800		67,715
Warrants on Leap common stock	6,530	6,530		13
Warrants on Leap Series X Preferred Stock (100:1)	443	44,300		90
Direct and incremental costs of the asset acquisition				1,393

Total		15,648,531	$	79,016

Equity Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 16, 2022	Jan. 20, 2017	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Options
Outstanding balance at the beginning of the period (in shares)					1,191,715
Granted (in shares)					2,318,500
Forfeited (in shares)					(84,568)
Outstanding balance at the end of the period (in shares)			3,425,647		3,425,647		1,191,715
Options exercisable at the end of the period (in shares)			1,108,400		1,108,400
Options vested and expected to vest at end of period (in shares)			3,425,647		3,425,647
Weighted Average Exercise Price Per Share
Outstanding balance at the beginning of the period (in dollars per share)					$ 35.94
Granted (in dollars per share)					2.70
Forfeited (in dollars per share)					17.29
Outstanding balance at the end of the period (in dollars per share)			$ 13.90		13.90		$ 35.94
Options exercisable at the end of the period (in dollars per share)			34.72		34.72
Options vested and expected to vest at end of the period (in dollars per share)			13.90		$ 13.90
Weighted Average Remaining Life in Years
Outstanding balance					8 years 8 months 26 days		7 years 5 months 19 days
Options exercisable at end of period					6 years 9 months 18 days
Options vested and expected to vest at end of the period					8 years 8 months 26 days
Assumptions used to determine grant-date fair value
Expected volatility					90.37%	82.70%
Weighted average risk-free interest rate					4.05%	3.06%
Expected dividend yield					0.00%	0.00%
Expected term (in years)					6 years 5 months 23 days	6 years 5 months 23 days
Options unvested at end of period (in dollars per share)			$ 2.09	$ 11.07	$ 2.09	$ 11.07
Expiration period					10 years
Unrecognized compensation cost related to non-vested stock options			$ 6,607		$ 6,607
Weighted average period for recognition of compensation cost					2 years 3 months 21 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Non vested, Weighted Average Grant Date Fair Value
Outstanding at end(in dollars per share)			$ 2.09	$ 11.07	$ 2.09	$ 11.07
Minimum
Assumptions used to determine grant-date fair value
Vesting period					3 years
Maximum
Assumptions used to determine grant-date fair value
Vesting period					4 years
2016 Plan
Assumptions used to determine grant-date fair value
Annual increase in authorized shares (as a percent)		4.00%
2022 Plan
Assumptions used to determine grant-date fair value
Number of options or stock awards available for grant under the Plan	750,000
Additional shares approved for future issuance	2,250,000
2016 and 2022 Plan
Assumptions used to determine grant-date fair value
Number of options or stock awards available for grant under the Plan			952,242		952,242
Options to purchase common stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Non vested, Weighted Average Grant Date Fair Value
Stock Based Compensation Expense			$ 1,300	$ 1,253	$ 3,875	$ 3,723
Options to purchase common stock \| Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Non vested, Weighted Average Grant Date Fair Value
Stock Based Compensation Expense			737	634	2,086	1,805
Options to purchase common stock \| General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Non vested, Weighted Average Grant Date Fair Value
Stock Based Compensation Expense			563	$ 619	$ 1,789	$ 1,918
Restricted stock units to purchase common stock
Assumptions used to determine grant-date fair value
Weighted average period for recognition of compensation cost					1 year 3 months 29 days
Vested					$ 5,677
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Non vested, Weighted Average Grant Date Fair Value
Unrecognized compensation costs related to RSUs granted to employees			$ 2,316		$ 2,316
Restricted stock units to purchase common stock \| Employees
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Awarded						265,000
Restricted stock units to purchase common stock \| 2016 Plan
Assumptions used to determine grant-date fair value
Options unvested at end of period (in dollars per share)			$ 19.92		$ 19.92		$ 18.90
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at the beginning					358,560
Vested (in shares)					(66,060)
Forfeited (in shares)					(7,500)
Outstanding at the end			285,000		285,000		358,560
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Non vested, Weighted Average Grant Date Fair Value
Outstanding at beginning( in dollars per share)					$ 18.90
Vested(in dollars per share)					14.20
Forfeited (in dollars per share)					19.40
Outstanding at end(in dollars per share)			$ 19.92		$ 19.92		$ 18.90

Warrants - January 2023 Common Stock Warrants and January 2023 Series X Preferred Stock Warrants (Details) - $ / shares	Sep. 30, 2023	Jun. 21, 2023	Jan. 31, 2023
Warrants
Exercise price per share	$ 6.78
Series X Preferred Shares
Warrants
Conversion ratio		100
January 2023 Common Stock Warrants
Warrants
Shares issuable upon exercise of warrants			6,530
Exercise price per share	$ 6.78		$ 6.78
January 2023 Series X Preferred Stock Warrants \| Series X Preferred Shares
Warrants
Shares issuable upon exercise of warrants			443
Exercise price per share			$ 6.78
Conversion ratio			100

Leases - Future minimum lease payments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases
2023	$ 113
2024	268
Total Lease Payments	381
Less: imputed interest	(12)
Total operating lease liabilities	$ 369