☒

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

☐

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

Delaware

82-2142067

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

149 Fifth Avenue

Suite 500

New York, NY

10010

(Address of principal executive offices)

(Zip Code)

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.00001 per share

INKT

Nasdaq Capital Market

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☒

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

1

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 and 2022

2

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2023 and 2022

3

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

5

Notes to Unaudited Interim Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

16

Item 4.

Controls and Procedures

16

PART II.

OTHER INFORMATION

17

Item 1.

Legal Proceedings

17

Item 1A.

Risk Factors

17

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

17

Item 6.

Exhibits

18

Signatures

19

June 30,
2023

December 31,
2022

ASSETS

Cash and cash equivalents

$

10,622,186

$

19,635,725

Prepaid expenses

265,847

298,667

Other current assets

166,026

470,300

Total current assets

11,054,059

20,404,692

Equipment, net of accumulated depreciation of $385,632 and $283,682 at
   June 30, 2023 and December 31, 2022, respectively

1,057,864

1,066,910

Total assets

$

12,111,923

$

21,471,602

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Accounts payable

$

4,885,638

$

5,823,000

Accrued liabilities

4,249,691

4,238,555

Other current liabilities

2,329,480

2,621,611

Total current liabilities

11,464,809

12,683,166

Other long-term liabilities

79,342

108,500

Due to related parties

10,063,136

9,081,239

Commitments and contingencies

STOCKHOLDERS’ DEFICIT

Common stock, par value $0.00001 per share; 150,000,000 shares authorized;
  34,462,679 and 33,856,428 shares issued at June 30, 2023
   and December 31, 2022, respectively

345

339

Additional paid-in capital

113,728,172

110,829,900

Accumulated other comprehensive loss

(401,811

)

(292,468

)

Accumulated deficit

(122,822,070

)

(110,939,074

)

Total stockholders’ deficit

(9,495,364

)

(401,303

)

Total liabilities and stockholders’ deficit

$

12,111,923

$

21,471,602

Three Months Ended
June 30,

Six Months Ended
June 30,

2023

2022

2023

2022

Operating expenses:

Research and development

$

4,558,430

$

5,876,092

$

8,751,992

$

11,153,427

General and administrative

1,784,914

1,822,339

3,445,448

3,919,293

Operating loss

(6,343,344

)

(7,698,431

)

(12,197,440

)

(15,072,720

)

Other income, net:

Interest income, net

146,389

26,377

314,444

25,529

Other income, net

—

1,559,312

—

1,157,348

Net loss

$

(6,196,955

)

$

(6,112,742

)

$

(11,882,996

)

$

(13,889,843

)

Per common share data:

Basic and diluted net loss per common share

$

(0.18

)

$

(0.18

)

$

(0.35

)

$

(0.41

)

Weighted average number of common shares outstanding

34,409,064

33,619,449

34,189,214

33,562,278

Other comprehensive income (loss):

Foreign currency translation gain (loss)

$

(28,008

)

$

1,399,686

$

(109,343

)

$

1,922,457

Comprehensive loss

$

(6,224,963

)

$

(4,713,056

)

$

(11,992,339

)

$

(11,967,386

)

Common Stock

Treasury Stock

Accumulated

Number of
Shares

Par
Value

Additional
Paid-In
Capital

Number of
Shares

Par
Value

Other
Comprehensive
Income (Loss)

Accumulated
Deficit

Total

Balance at December 31, 2022

33,856,428

$

339

$

110,829,900

—

$

—

$

(292,468

)

$

(110,939,074

)

(401,303

)

Net loss

—

—

—

—

—

—

(5,686,041

)

(5,686,041

)

Other comprehensive loss

—

—

—

—

—

(81,335

)

—

(81,335

)

Exercise of stock options and employee share purchases

99,555

1

45,495

—

—

—

—

45,496

Vesting of nonvested shares

30,413

—

—

—

—

—

—

—

Grant and recognition of stock options

—

—

887,811

—

—

—

—

887,811

Recognition of parent stock options

—

—

33,328

—

—

—

—

33,328

Issuance of shares for employee bonuses

476,804

5

726,260

(163,759

)

(379,921

)

—

—

346,344

Retirement of treasury shares

(163,759

)

(2

)

—

163,759

379,921

—

—

379,919

Balance at March 31, 2023

34,299,441

$

343

$

112,522,794

—

$

—

$

(373,803

)

$

(116,625,115

)

$

(4,475,781

)

Net loss

—

—

—

—

—

—

(6,196,955

)

(6,196,955

)

Other comprehensive income

—

—

—

—

—

(28,008

)

—

(28,008

)

Grant and recognition of stock options

—

—

864,918

—

—

—

—

864,918

Recognition of parent stock options

—

—

33,347

—

—

—

—

33,347

Option exercises

32,211

—

22,020

—

—

—

—

22,020

Vesting of nonvested shares

46,313

1

(1

)

—

—

—

—

—

Share retirement

(192

)

—

—

—

—

—

—

—

Issuance of shares for employee bonuses

127,026

1

285,094

(42,120

)

(97,718

)

—

—

187,377

Retirement of treasury shares

(42,120

)

—

—

42,120

97,718

—

—

97,718

Balance at June 30, 2023

34,462,679

$

345

$

113,728,172

—

$

—

$

(401,811

)

$

(122,822,070

)

$

(9,495,364

)

Common Stock

Treasury Stock

Accumulated

Number of
Shares

Par
Value

Additional
Paid-In
Capital

Number of
Shares

Par
Value

Other
Comprehensive
Income (Loss)

Accumulated
Deficit

Total

Balance at December 31, 2021

33,476,523

$

335

$

107,349,265

—

$

—

$

(625,269

)

$

(82,947,862

)

$

23,776,469

Net loss

—

—

—

—

—

—

(7,777,101

)

(7,777,101

)

Other comprehensive income

—

—

—

—

—

522,771

—

522,771

Option exercises

84,391

1

688

—

—

—

—

689

Grant and recognition of stock options

—

—

741,773

—

—

—

—

741,773

Recognition of parent stock options

—

—

43,733

—

—

—

—

43,733

Balance at March 31, 2022

33,560,914

$

336

$

108,135,459

—

$

—

$

(102,498

)

$

(90,724,963

)

$

17,308,334

Net loss

—

—

—

—

—

—

(6,112,742

)

(6,112,742

)

Other comprehensive income

—

—

—

—

—

1,399,686

—

1,399,686

Grant and recognition of stock options

—

—

796,924

—

—

—

—

796,924

Recognition of parent stock options

—

—

3,886

—

—

—

—

3,886

Option exercises

48,118

—

301

—

—

—

—

301

Forfeiture of restricted stock

(20,872

)

—

(75

)

—

—

—

—

(75

)

Issuance of shares for employee bonuses

125,199

1

293,523

(43,665

)

(157,194

)

—

—

136,330

Retirement of treasury shares

(43,665

)

—

—

43,665

157,194

—

—

157,194

Balance at June 30, 2022

33,669,694

$

337

$

109,230,018

—

$

—

$

1,297,188

$

(96,837,705

)

$

13,689,838

Six Months Ended June 30,

2023

2022

Cash flows from operating activities:

Net loss

$

(11,882,996

)

$

(13,889,843

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation

97,592

55,386

Share-based compensation

1,819,404

1,586,316

Gain on forgiveness of liability

(266,780

)

(2,790,809

)

Changes in operating assets and liabilities:

Prepaid expenses

33,151

(102,694

)

Accounts payable

(965,909

)

1,610,291

Accrued liabilities and other current liabilities

1,151,422

1,558,953