Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37942 | |
Entity Registrant Name | CervoMed Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-0645032 | |
Entity Address, Address Line One | 20 Park Plaza, Suite 424 | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02216 | |
City Area Code | 617 | |
Local Phone Number | 744-4400 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CRVO | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 5,674,520 | |
Entity Central Index Key | 0001053691 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 10,424,675 | $ 4,093,579 |
Prepaid expenses and other current assets | 1,418,745 | 64,127 |
Total current assets | 11,843,420 | 4,157,706 |
Other assets | 194,443 | 0 |
Total assets | 12,037,863 | 4,157,706 |
Liabilities, Current [Abstract] | ||
Accounts payable | 533,790 | 97,302 |
Deferred grant revenue | 547,051 | 0 |
Accrued expenses and other current liabilities | 1,382,822 | 644,252 |
Convertible Notes | 0 | 12,414,000 |
Total liabilities | 2,463,663 | 13,155,554 |
Commitments and Contingencies | ||
Convertible preferred stock: | ||
Convertible preferred stock | 0 | 24,287,211 |
Equity, Attributable to Parent [Abstract] | ||
Common stock, $0.001 par value: 1,000,000,000 shares authorized, 5,674,354 and 518,140 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 5,674 | 518 |
Additional paid-in capital | 61,646,917 | 18,983,339 |
Accumulated deficit | (52,078,391) | (52,268,916) |
Total stockholders' equity (deficit) | 9,574,200 | (33,285,059) |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | 12,037,863 | 4,157,706 |
Series Preferred Stock [Member] | ||
Convertible preferred stock: | ||
Convertible preferred stock | 0 | 0 |
Series A-1 Preferred Stock [Member] | ||
Convertible preferred stock: | ||
Convertible preferred stock | 0 | 246,849 |
Series A-2 Preferred Stock [Member] | ||
Convertible preferred stock: | ||
Convertible preferred stock | 0 | 4,173,267 |
Series B Preferred Stock [Member] | ||
Convertible preferred stock: | ||
Convertible preferred stock | $ 0 | $ 19,867,095 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred Stock, Shares Authorized (in shares) | 30,000,000 | |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common Stock, Shares, Outstanding (in shares) | 5,674,354 | 518,140 |
Common Stock, Shares, Issued (in shares) | 5,674,354 | |
Series Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized (in shares) | 30,000,000 | |
Preferred Stock, Shares Issued (in shares) | 0 | 0 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
Series A-1 Preferred Stock [Member] | ||
Temporary Equity, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary Equity, Shares Authorized (in shares) | 1,960,600 | 1,960,600 |
Temporary Equity, Shares Issued (in shares) | 0 | 1,960,600 |
Temporary Equity, Shares Outstanding (in shares) | 0 | 1,960,600 |
Series A-2 Preferred Stock [Member] | ||
Temporary Equity, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary Equity, Shares Authorized (in shares) | 335,711 | 335,711 |
Temporary Equity, Shares Issued (in shares) | 0 | 335,711 |
Temporary Equity, Shares Outstanding (in shares) | 0 | 335,711 |
Series B Preferred Stock [Member] | ||
Temporary Equity, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary Equity, Shares Authorized (in shares) | 1,034,890 | 1,034,890 |
Temporary Equity, Shares Issued (in shares) | 0 | 1,034,890 |
Temporary Equity, Shares Outstanding (in shares) | 0 | 1,034,890 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Grant revenue | $ 1,526,482 | $ 0 | $ 4,654,294 | $ 0 |
Operating expenses: | ||||
Research and development | 1,791,487 | 330,543 | 5,583,149 | 955,784 |
General and administrative | 2,410,124 | 573,511 | 4,403,590 | 1,580,927 |
Total operating expenses | 4,201,611 | 904,054 | 9,986,739 | 2,536,711 |
Loss from operations | (2,675,129) | (904,054) | (5,332,445) | (2,536,711) |
Other income (expense): | ||||
Other income (expense) | 4,777,824 | (88) | 5,422,192 | (1,769,093) |
Interest income | 47,667 | 21,519 | 100,778 | 30,157 |
Total other income (expense) | 4,825,491 | 21,431 | 5,522,970 | (1,738,936) |
Net income (loss) | $ 2,150,362 | $ (882,623) | $ 190,525 | $ (4,275,647) |
Earnings Per Share [Abstract] | ||||
Net income (loss) per share of common stock - basic (in dollars per share) | $ 0.65 | $ (1.70) | $ 0.13 | $ (8.25) |
Weighted average shares outstanding - basic (in shares) | 3,308,302 | 518,140 | 1,458,415 | 518,140 |
Net income (loss) per share of common stock - diluted (in dollars per share) | $ (0.70) | $ (1.70) | $ (2.37) | $ (8.25) |
Weighted average shares outstanding - diluted (in shares) | 3,766,700 | 518,140 | 2,209,407 | 518,140 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] Series A-1 Preferred Stock [Member] | Preferred Stock [Member] Series A-2 Preferred Stock [Member] | Preferred Stock [Member] Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Series A-1 Preferred Stock [Member] | Series A-2 Preferred Stock [Member] | Series B Preferred Stock [Member] | Total |
Balance at January 1, 2023 (in shares) at Dec. 31, 2021 | 1,960,600 | 335,711 | 1,034,890 | |||||||
Balance at January 1, 2023 at Dec. 31, 2021 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at January 1, 2023 (in shares) at Dec. 31, 2021 | 518,140 | |||||||||
Balance at January 1, 2023 at Dec. 31, 2021 | $ 518 | $ 18,521,988 | $ (46,465,869) | $ (27,943,363) | ||||||
Stock-based compensation expense, including vesting of RSUs | 0 | 252,847 | 0 | 252,847 | ||||||
Net income | $ 0 | $ 0 | $ 0 | 0 | (4,275,647) | |||||
Stock-based compensation expense | $ 0 | 252,847 | 0 | 252,847 | ||||||
Balance at September 30, 2023 (in shares) at Sep. 30, 2022 | 1,960,600 | 335,711 | 1,034,890 | |||||||
Balance at September 30, 2023 at Sep. 30, 2022 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at September 30, 2023 (in shares) at Sep. 30, 2022 | 518,140 | |||||||||
Balance at September 30, 2023 at Sep. 30, 2022 | $ 518 | 18,902,352 | (50,741,516) | (31,838,646) | ||||||
Contributed capital in lieu of executive compensation | 0 | 0 | 0 | 0 | 127,517 | 0 | 127,517 | |||
Unrealized loss on marketable securities | $ 0 | $ 0 | $ 0 | $ 0 | (4,275,647) | |||||
Balance at January 1, 2023 (in shares) at Jun. 30, 2022 | 1,960,600 | 335,711 | 1,034,890 | |||||||
Balance at January 1, 2023 at Jun. 30, 2022 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at January 1, 2023 (in shares) at Jun. 30, 2022 | 518,140 | |||||||||
Balance at January 1, 2023 at Jun. 30, 2022 | $ 518 | 18,819,968 | (49,858,893) | (31,038,407) | ||||||
Stock-based compensation expense, including vesting of RSUs | 0 | 0 | 0 | 0 | 82,384 | 0 | 82,384 | |||
Net income | 0 | 0 | 0 | 0 | 0 | (882,623) | (882,623) | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 | 82,384 | 0 | 82,384 | |||
Balance at September 30, 2023 (in shares) at Sep. 30, 2022 | 1,960,600 | 335,711 | 1,034,890 | |||||||
Balance at September 30, 2023 at Sep. 30, 2022 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at September 30, 2023 (in shares) at Sep. 30, 2022 | 518,140 | |||||||||
Balance at September 30, 2023 at Sep. 30, 2022 | $ 518 | 18,902,352 | (50,741,516) | (31,838,646) | ||||||
Unrealized loss on marketable securities | $ 0 | $ 0 | $ 0 | $ 0 | 0 | (882,623) | (882,623) | |||
Balance at January 1, 2023 (in shares) at Dec. 31, 2022 | 1,960,600 | 335,711 | 1,034,890 | 1,960,600 | 335,711 | 1,034,890 | ||||
Balance at January 1, 2023 at Dec. 31, 2022 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at January 1, 2023 (in shares) at Dec. 31, 2022 | 518,140 | |||||||||
Balance at January 1, 2023 at Dec. 31, 2022 | $ 518 | 18,983,339 | (52,268,916) | (33,285,059) | ||||||
Net income | (1,959,837) | |||||||||
Balance at September 30, 2023 (in shares) at Jun. 30, 2023 | 1,960,600 | 335,711 | 1,034,890 | |||||||
Balance at September 30, 2023 at Jun. 30, 2023 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at September 30, 2023 (in shares) at Jun. 30, 2023 | 518,140 | |||||||||
Balance at September 30, 2023 at Jun. 30, 2023 | $ 518 | 19,116,831 | (54,228,753) | (35,111,404) | ||||||
Unrealized loss on marketable securities | (1,959,837) | |||||||||
Balance at January 1, 2023 (in shares) at Dec. 31, 2022 | 1,960,600 | 335,711 | 1,034,890 | 1,960,600 | 335,711 | 1,034,890 | ||||
Balance at January 1, 2023 at Dec. 31, 2022 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at January 1, 2023 (in shares) at Dec. 31, 2022 | 518,140 | |||||||||
Balance at January 1, 2023 at Dec. 31, 2022 | $ 518 | 18,983,339 | (52,268,916) | (33,285,059) | ||||||
Conversion of preferred stock to common stock (in shares) | (1,960,600) | (335,711) | (1,034,890) | |||||||
Conversion of preferred stock to common stock | $ (246,849) | $ (4,173,267) | $ (19,867,095) | (24,287,211) | ||||||
Conversion of preferred stock to common stock (in shares) | 2,936,566 | |||||||||
Conversion of preferred stock to common stock | $ 246,849 | $ 4,173,267 | $ 19,867,095 | 24,287,211 | ||||||
Issuance of common stock upon settlement of convertible promissory note (in shares) | 0 | 0 | 0 | 795,905 | ||||||
Issuance of common stock upon settlement of convertible promissory note | $ 0 | $ 0 | $ 0 | $ 796 | 6,988,953 | 0 | 6,989,749 | |||
Issuance of common stock to Diffusion stockholders in reverse recapitalization, net of issuance costs | $ 0 | $ 0 | $ 0 | $ 1,360 | 10,337,754 | 0 | $ 10,339,114 | |||
Issuance of common stock to Diffusion stockholders in reverse recapitalization, net of issuance costs (in shares) | 0 | 1,360,244 | 1,360,244 | |||||||
Sale of common stock (in shares) | 0 | 0 | 0 | 63,422 | ||||||
Sale of common stock | $ 0 | $ 0 | $ 0 | $ 63 | 809,937 | 0 | $ 810,000 | |||
Stock-based compensation expense, including vesting of RSUs | 0 | 0 | 0 | $ 0 | 242,660 | 0 | 242,660 | |||
Stock-based compensation expense, including vesting of RSUs (in shares) | 77 | |||||||||
Net income | 0 | 0 | 0 | $ 0 | 0 | 190,525 | 190,525 | |||
Conversion of convertible preferred stock to common stock | 2,937 | 24,284,274 | 0 | 24,287,211 | ||||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 | 242,660 | 0 | 242,660 | |||
Balance at September 30, 2023 (in shares) at Sep. 30, 2023 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Balance at September 30, 2023 at Sep. 30, 2023 | $ 0 | $ 0 | $ 0 | |||||||
Balance at September 30, 2023 (in shares) at Sep. 30, 2023 | 5,674,354 | |||||||||
Balance at September 30, 2023 at Sep. 30, 2023 | $ 5,674 | 61,646,917 | (52,078,391) | 9,574,200 | ||||||
Unrealized loss on marketable securities | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 190,525 | 190,525 | |||
Balance at January 1, 2023 (in shares) at Jun. 30, 2023 | 1,960,600 | 335,711 | 1,034,890 | |||||||
Balance at January 1, 2023 at Jun. 30, 2023 | $ 246,849 | $ 4,173,267 | $ 19,867,095 | |||||||
Balance at January 1, 2023 (in shares) at Jun. 30, 2023 | 518,140 | |||||||||
Balance at January 1, 2023 at Jun. 30, 2023 | $ 518 | 19,116,831 | (54,228,753) | (35,111,404) | ||||||
Conversion of preferred stock to common stock (in shares) | (1,960,600) | (335,711) | (1,034,890) | |||||||
Conversion of preferred stock to common stock | $ (246,849) | $ (4,173,267) | $ (19,867,095) | $ (2,937) | (24,284,274) | 0 | (24,287,211) | |||
Conversion of preferred stock to common stock (in shares) | 2,936,566 | |||||||||
Conversion of preferred stock to common stock | $ 246,849 | $ 4,173,267 | $ 19,867,095 | $ 2,937 | 24,284,274 | 0 | 24,287,211 | |||
Issuance of common stock upon settlement of convertible promissory note (in shares) | 0 | 0 | 0 | 795,905 | ||||||
Issuance of common stock upon settlement of convertible promissory note | $ 0 | $ 0 | $ 0 | $ 796 | 6,988,953 | 0 | 6,989,749 | |||
Issuance of common stock to Diffusion stockholders in reverse recapitalization, net of issuance costs | $ 0 | $ 0 | $ 0 | $ 1,360 | 10,337,754 | 0 | 10,339,114 | |||
Issuance of common stock to Diffusion stockholders in reverse recapitalization, net of issuance costs (in shares) | 1,360,244 | |||||||||
Sale of common stock (in shares) | 0 | 0 | 0 | 63,422 | ||||||
Sale of common stock | $ 0 | $ 0 | $ 0 | $ 63 | 809,937 | 0 | 810,000 | |||
Stock-based compensation expense, including vesting of RSUs | 0 | 0 | 0 | $ 0 | 109,168 | 0 | 109,168 | |||
Stock-based compensation expense, including vesting of RSUs (in shares) | 77 | |||||||||
Net income | 0 | 0 | 0 | $ 0 | 0 | 2,150,362 | 2,150,362 | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 | 109,168 | 0 | 109,168 | |||
Balance at September 30, 2023 (in shares) at Sep. 30, 2023 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Balance at September 30, 2023 at Sep. 30, 2023 | $ 0 | $ 0 | $ 0 | |||||||
Balance at September 30, 2023 (in shares) at Sep. 30, 2023 | 5,674,354 | |||||||||
Balance at September 30, 2023 at Sep. 30, 2023 | $ 5,674 | 61,646,917 | (52,078,391) | 9,574,200 | ||||||
Unrealized loss on marketable securities | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 2,150,362 | $ 2,150,362 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Unrealized loss on marketable securities | $ 190,525 | $ (4,275,647) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Stock-based compensation expense | 242,660 | 252,847 |
Capital in lieu of executive compensation | 0 | 127,516 |
Change in fair value of convertible debt | (5,424,251) | 1,769,000 |
Increase (Decrease) in Operating Capital [Abstract] | ||
Prepaid expenses, deposits and other assets | (1,549,061) | 111,496 |
Accounts payable | 382,675 | 57,347 |
Deferred grant revenue | 547,051 | 0 |
Net cash used in operating activities | (4,911,393) | (1,880,229) |
Net assets assumed in connection with reverse recapitalization | 11,887,757 | 0 |
Proceeds from sale of common stock | 810,000 | 0 |
Payment of reverse recapitalization costs | (1,455,268) | 0 |
Net cash provided by financing activities | 11,242,489 | 0 |
Net increase (decrease) in cash and cash equivalents | 6,331,096 | (1,880,229) |
Cash and cash equivalents at beginning of period | 4,093,579 | 6,666,338 |
Cash and cash equivalents at end of period | 10,424,675 | 4,786,109 |
Noncash Investing and Financing Items [Abstract] | ||
Conversion of preferred stock to common stock | 24,287,211 | |
Merger cost in accounts payable and accrued expenses | 93,375 | |
Conversion of Debt into Common Stock [Member] | ||
Noncash Investing and Financing Items [Abstract] | ||
Conversion of Convertible Notes | $ 6,989,749 | $ 0 |
Note 1 - The Company and Descri
Note 1 - The Company and Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | 1. The Company and Description of Business The Company, a corporation organized under the laws of the state of Delaware and headquartered in Boston, Massachusetts, is a clinical-stage biotechnology company developing treatments for degenerative diseases of the brain. The Company is currently developing its product candidate neflamapimod, an investigational orally administered small molecule brain penetrant that inhibits p38α. Neflamapimod has the potential to treat synaptic dysfunction, the reversible aspect of the underlying neurodegenerative processes that cause disease in DLB and certain other major neurological disorders, and is currently being evaluated in a Phase 2b study in patients with DLB. On March 30, 2023, the Company, Merger Sub, and EIP entered into the Merger Agreement (Note 4), pursuant to which, at the Effective Time, Merger Sub merged with and into EIP, with EIP surviving the Merger as a wholly-owned subsidiary of the Company. In connection with the Merger, on August 16, 2023, the Company changed its corporate name from “Diffusion Pharmaceuticals Inc.” to “CervoMed Inc.” On August 16, 2023, Diffusion approved a one-for-1.5 reverse stock split which was consummated for historical Diffusion shares in connection with the Merger. In addition, upon consummation of the Merger, all historical EIP shares were adjusted using an exchange ratio of .1151. All information in the accompanying unaudited condensed consolidated interim financial statements and notes thereto regarding share amounts of common stock, price per share of common stock and the conversion factor for preferred stock into common stock have been adjusted to reflect the application of the reverse stock split and the exchange ratio on a retroactive basis. All shares of EIP common stock outstanding immediately prior to the Effective Time, after giving effect to the conversion of EIP preferred stock and the Convertible Notes (and excluding shares held as treasury stock by EIP, shares held or owned by the Company and any dissenting shares), converted into the right to receive, in the aggregate, 4,314,033 shares of the Company’s common stock and prefunded warrants to purchase 495,995, based on an exchange ratio of 0.1151. |
Note 2 - Liquidity and Capital
Note 2 - Liquidity and Capital Resources | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Liquidity Disclosure [Text Block] | 2. Liquidity and Capital Resources The Company has generated negative cash flows from operations and, as of September 30, 2023, had an accumulated deficit of approximately $52.1 million. In January 2023, the Company was awarded a $21.0 million grant from the NIA to support its ongoing Phase 2b study of neflamapimod in DLB, which is expected to be received over a three-year Based on our current operating plan, we believe that the Company’s existing cash and cash equivalents on hand as of September 30, 2023, along with the remaining funds to be received from the NIA grant, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of these unaudited condensed consolidated interim financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through a debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs, including our development or commercialization activities for neflamapimod. We might also be required to seek funds through arrangements with third parties that require us to relinquish certain of our rights to neflamapimod or otherwise agree to terms unfavorable to us. Operations of the Company are subject to certain additional risks and uncertainties as well, and any one or more of these factors could materially affect the Company’s financial condition, future operations and liquidity needs. Many of these risks and uncertainties are outside of the Company’s control, including internal and external factors that may affect the success or failure of the Company’s research and development efforts, the length of time and cost of developing and commercializing the Company’s current or future product candidates, whether and when any such product candidates become approved drugs, and how significant a drug’s market share will be, if approved, among others. The Company expects that its existing cash and cash equivalents as of September 30, 2023 will enable it to fund its operating expenses and capital expenditure requirements, including expected costs related to the ongoing Phase 2b trial for at least twelve months following the issuance of these condensed consolidated interim financial statements. |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | 3. Summary of Significant Accounting Policies Basis of presentation The unaudited condensed consolidated interim financial statements have been prepared in conformity with US GAAP as defined by the FASB. Unaudited condensed consolidated interim financial statements The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company in accordance with US GAAP for interim information and pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in unaudited condensed consolidated interim financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2022, which begin on page F-30 of the Difffusions Amended Registration Statement on Form S-4 as filed with the SEC on July 11, 2023. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. Consolidation The unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of estimates The preparation of unaudited condensed consolidated interim financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, grant revenue, expenses, and related disclosures. On an ongoing basis, the Company’s management evaluates its estimates, including estimates related to money market accounts, clinical trial accruals, stock-based compensation expense, grant revenue, Convertible Notes, and expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ significantly from those estimates or assumptions. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains its cash and cash equivalent balances with financial institutions that management believes are creditworthy. The Company has no financial instruments with off-balance-sheet risk of loss. The Company has not experienced any losses in such accounts. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash and cash equivalents. Cash equivalents, which consist of amounts invested in money market funds, are stated at fair value. There are no unrealized gains or losses on the money market funds for the period ended September 30, 2023. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, accounts payable, previously outstanding c n c n c n c s c s The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 Level 2 Level 3 The following table presents the Company’s assets that are measured at fair value on a recurring basis: September 30, 2023 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (money market accounts) $ 10,424,675 $ - $ - Total assets measured at fair value $ 10,424,675 $ - $ - December 31, 2022 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (money market accounts) $ 4,093,579 $ - $ - Total assets measured at fair value $ 4,093,579 $ - $ - Liabilities Convertible Notes $ - $ - $ 12,414,000 Total liabilities measured at fair value $ - $ - $ 12,414,000 The following table presents a roll-forward of the fair value of the Convertible Notes (Note 9) for which fair value is determined by Level 3 inputs: Nine Months Ended September 30, 2023 September 30, 2022 Beginning balance $ 12,414,000 $ 10,025,000 Fair value adjustment (5,424,251 ) 2,389,000 Reclassification to additional paid in capital upon conversion (6,989,749 ) - Ending balance $ - $ 12,414,000 Three Months Ended September 30, 2023 September 30, 2022 Beginning balance $ 11,768,000 $ 12,414,000 Fair value adjustment (4,778,251 ) - Reclassification to additional paid in capital upon conversion (6,989,749 ) - Ending balance $ - $ 12,414,000 Valuation techniques used to measure fair value maximize the use of relevant observable inputs and minimize the use of unobservable inputs (Note 9). The Company’s c n There were no transfers among Level 1, Level 2 or Level 3 categories in the nine months ended September 30, 2023 or in the year ended December 31, 2022. The fair value of the 2020 N N N N N N N N Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases”, which establishes a ROU model. That requires a lessee to recognize an ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the Statement of Operations as well as the reduction of the ROU asset. The new standard provides a number of optional practical expedients in transition. The Company has elected to apply (i) the practical expedient, which allows us to not separate lease and non-lease components, for new leases and (ii) the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new standard. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has elected to combine lease and non-lease components as a single component. Operating leases will be recognized on the unaudited interim condensed consolidated balance sheet as ROU assets, lease liabilities current and lease liabilities non-current. Fixed rent payments are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis. Research and Development Research and development costs are expensed as incurred and consist primarily of new product development. Research and development costs include salaries and benefits, consultants’ fees, process development costs and stock-based compensation, as well as fees paid to third parties that conduct certain research and development activities on the Company’s behalf. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers. The Company records accrued expenses for estimated preclinical study and clinical trial expenses. Estimates are based on the services performed pursuant to contracts with research institutions, contract research organizations in connection with clinical studies, investigative sites in connection with clinical studies, vendors in connection with preclinical development activities, and contract manufacturing organizations in connection with the production of materials for clinical trials. Further, the Company accrues expenses related to clinical trials based on the level of subject enrollment and activity according to the related agreement. The Company monitors subject enrollment levels and related activity to the extent reasonably possible and makes judgments and estimates in determining the accrued balance in each reporting period. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development. If the Company underestimates or overestimates the level of services performed or the costs of these services, actual expenses could differ from estimates. To date, the Company has not experienced significant changes in its estimates of preclinical studies and clinical trial accruals. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the unaudited interim condensed consolidated statement of operations. Stock-based Compensation Stock-based compensation for employee and non-employee awards is measured on the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period. The fair value of stock options to purchase common stock are measured using the Black-Scholes option pricing model. The Company accounts for forfeitures as they occur. The fair value of stock options is determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and estimation by management. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Rate Revenue Recognition The Company generates revenue from government contracts that reimburse the Company for certain allowable costs for funded projects. The Company recognizes funding received as grant revenue for the Company’s grant from the NIA, rather than as a reduction of research and development expenses, because the Company is the principal in conducting the research and development activities and these contracts are central to its ongoing operations. Revenue is recognized as the qualifying expenses related to the contracts are incurred. Revenue recognized upon incurring qualifying expenses in advance of receipt of funding is recorded in the Company’s unaudited interim condensed consolidated balance sheet as accounts receivable. Amounts received in advance of services rendered are recorded as deferred grant revenue. The related costs incurred by the Company are included in research and development expense in the Company’s unaudited interim condensed consolidated statements of operations. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated interim financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to recover or settle. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income for the period that includes the enactment date. The deferred tax assets are recognized to the extent the Company believes that these assets are more likely than not to be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance. The Company records uncertain tax positions using a two-step process. First, the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position. Second, for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits on the interest expense line and other expense line, respectively, in the accompanying statements of operations. Accrued interest and penalties are included on the related liability lines in the unaudited interim condensed consolidated balance sheet. Net Income ( l p s Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during each period. Diluted net income (loss) per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, Convertible Notes (inclusive of change in fair value of Convertible Notes), stock options, and warrants, which would result in the issuance of incremental shares of common stock. For diluted net loss per share in periods where the Company has a net loss, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation. For the three and nine months ended September 30, 2023, the Company was in a net income position and calculated the diluted net income per share by dividing the Company’s net income by the dilutive weighted average number of share outstanding during the periods, determined using the treasury stock method and the average stock price during the period. The pre-funded warrants to purchase common stock issued in connection with the Merger are included in the calculation of basic and diluted net loss per share as the exercise price of $0.001 per share is non-substantive and is virtually assured. The pre-funded warrants are more fully described in Note 11. A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share calculations are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 2,150,362 $ (882,623 ) $ 190,525 $ (4,275,647 ) Change in fair value of c n (4,778,251 ) - (5,424,251 ) - Adjusted net income (loss) $ (2,627,889 ) $ (882,623 ) $ (5,233,726 ) $ (4,275,647 ) Denominator Weighted average shares outstanding, basic 3,308,302 518,140 1,458,415 518,140 Weighted average c n 458,398 - 750,992 - Weighted average shares outstanding, diluted 3,766,700 518,140 2,209,407 518,140 Net income (loss), basic $ 0.65 $ (1.70 ) $ 0.13 $ (8.25 ) Net income (loss), dilutive $ (0.70 ) $ (1.70 ) $ (2.37 ) $ (8.25 ) The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive: Three and Nine Months Ended September 30, 2023 2022 Preferred Series A-1 - 1,960,600 Preferred Series A-2 - 335,711 Preferred Series B - 1,034,890 Warrants 598,457 43,618 Stock options 329,340 141,831 Total 927,797 3,516,650 Segments The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a condensed consolidated basis for purposes of allocating resources. Recently Issued But Not Yet Adopted Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in US GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company elected to early adopt ASU 2020-06 during the year ended December 31, 2022 using the modified retrospective method, which did not have a material impact on the financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted ASU No. 2016-13 on January 1, 2023 which did not have a material impact on the financial statements. In January 2021, the FASB issued ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope” (“ASU 2021-01”), which was effective immediately and permits entities to elect certain optional expedients and exceptions when accounting for derivatives and certain hedging relationships affected by changes in interest rates and the transition. Additionally, ASU 2022-06 “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. The new guidance is effective for fiscal years beginning after December 31, 2024. The Company does not currently believe that this transition from LIBOR will have a material impact on its financial statements. |
Note 4 - Merger
Note 4 - Merger | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | 4. Merger On August 16, 2023, the Company completed the Merger of EIP and Merger Sub as discussed in Note 1. For financial reporting purposes, EIP was determined to be the accounting acquirer based upon the terms of the Merger and other factors, including: (i) EIP securityholders immediately prior to the Merger owning approximately 76% of the Company immediately following the Merger, (ii) EIP appointing the majority (five of seven) of the Company’s board of directors immediately following the Merger and (iii) former EIP management holding the majority of key positions of management, including the Chief Executive Officer and Chairman of the Board of Directors positions, immediately following the Merger. The Merger was also accounted for as a reverse recapitalization under US GAAP because the primary assets of the Company immediately prior to the Merger were cash and cash equivalents. Accordingly, (i) for all periods prior to the Merger, EIP’s historical financial statements and results of operations replace and are deemed to be the Company’s financial statement and results of operations for such periods, (ii) the Merger was treated as the equivalent of EIP issuing shares of common stock to the holders of the Company's common stock immediately prior to the Merger as consideration to acquire the net assets of the Company, and (iii) the net assets of the Company as of immediately prior to the Merger were recorded at their acquisition-date fair value in the condensed consolidated financial statements of EIP. Immediately after the Merger, there were approximately 5,674,277 shares of the Company’s common stock outstanding. The following table shows the net assets acquired in the Merger: August 16, 2023 Cash and cash equivalents $ 12,705,140 Prepaid and other assets 406,488 Accounts payable and accrued expenses (1,223,871 ) Total net assets assumed 11,887,757 Minus: Transaction costs (1,548,643 ) Total net assets assumed minus transaction costs $ 10,339,114 |
Note 5 - Significant Agreements
Note 5 - Significant Agreements and Contracts | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Collaborative Arrangement Disclosure [Text Block] | 5. Significant Agreements and Contracts Vertex Option and License Agreement In August 2012, the Company entered the License Agreement, as amended, to acquire an exclusive license to develop and commercialize a drug candidate “VX-745” from Vertex. In August 2014, the Company exercised its option to acquire the license and paid an option fee of $100,000, which was expensed as incurred as a component of research and development expense. The License Agreement granted the Company the exclusive worldwide use of VX-745 in the field of diagnosis, treatment and prevention of Alzheimer’s disease and related central nervous system disorders in humans. As part of the License Agreement, the Company is obligated to make certain payments totaling up to approximately $117.0 million upon achievement of certain regulatory and sales milestones, and royalties on net sales of products on indications covered by the License Agreement. The first expected milestone events concern filing of an NDA, with the FDA for marketing approval of neflamapimod, in the U.S., or a similar filing for a non-U.S. major market, as specified in the Vertex Agreement, and such royalties will be on a sliding scale of percentages of net sales in the low- to mid-teens, depending on the amount of net sales in the applicable years. We are also obligated to make a milestone payment to Vertex upon net sales reaching a certain specified amount in any 12-month period. The Vertex Agreement states that royalties will be reduced by 50% during any portion of the royalty term when there is no valid claim of an issued patent within specified patent rights covering the licensed product. We also have the right to deduct, on a country by country basis, from royalties otherwise payable to Vertex under the terms of the Vertex Agreement, 50% of all royalties, upfront fees, milestones and other payments paid by us or any of our affiliates or sublicensees to third parties under licenses that are necessary for the development, manufacture, sale or use of a licensed product, provided that in no event will the royalty payable to Vertex be reduced to less than 50% of the rates specified in the Vertex Agreement, subject to certain adjustments specified therein. The Company has made a total of $100,000 in payments to Vertex related to the License Agreement. No payments were made during the three and nine months ended September 30, 2023. National Institute of Aging Grant In January 2023, the Company was awarded a $21.0 million grant from the NIA to support a Phase 2b study of neflamapimod in dementia with Lewy bodies. The grant monies are expected to be received over a period of three years including $6.7 million in 2023, $8.1 million in 2024 and $6.2 million in 2025. The total revenue recognized from the NIA grant was $1.6 million and $4.7 million for the three and nine months ended September 30, 2023. As of September 30, 2023, total cash funding of $5.2 million has been received from the NIA grant, resulting in approximately $15.8 million in funding remaining. Of the $5.2 million funding received to date, $0.5 million has been recorded as deferred revenue in the interim condensed consolidated balance sheet at September 30, 2023. |
Note 6 - Prepaid Expenses and O
Note 6 - Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Prepaid Expenses and Other Current Assets [Text Block] | 6. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: September 30, December 31, 2023 2022 Prepaid clinical expenses $ 670,851 $ - Insurance 604,275 9,937 Rent - 2,455 Other 143,619 51,735 Total $ 1,418,745 $ 64,127 |
Note 7 - Accrued Expenses and O
Note 7 - Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | 7. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2023 2022 Professional fees $ 492,772 $ 206,675 Employee compensation costs 696,570 364,070 Clinical development costs 71,979 23,185 Other 121,501 50,322 Total $ 1,382,822 $ 644,252 |
Note 8 - Line of Credit
Note 8 - Line of Credit | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 8. Line of Credit The Company established a line of credit with a lender during the year ended December 31, 2020 in the amount of $2.5 million with a variable interest rate of 1.75% over the 30-day LIBOR (7.19 No no |
Note 9 - Convertible Notes
Note 9 - Convertible Notes | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Long-Term Debt [Text Block] | 9. Convertible Notes In December 2020, EIP issued the 2020 Notes to predominantly related party investors for proceeds of $5.1 million. In December 2021, EIP issued the 2021 Notes to predominantly related party investors for proceeds of $6.0 million. Upon issuance, the Company elected the fair value option for the Convertible Notes in accordance with ASC 825, “Financial Instruments,” pursuant to which the entire instrument, including interest expense, is measured at fair value with the initial change in fair value deemed to be a capital contribution and any subsequent changes in fair value being recorded to other income (expense). The fair value adjustments recognized in other income (expense) were $4.8 million and $0 million for the three months ended September 30, 2023 and 2022, respectively. The fair value adjustments recognized in other income (expense) were $5.4 million and $ (1.8) In June 2023, EIP entered into the 2023 Notes Amendment which amended the conversion price of the Convertible Notes to $1.47 per share of EIP Common Stock upon effectiveness of the Merger with the Company or a 30% conversion discount upon the occurrence of any other reverse merger. Further, the amendment provided that if the Merger with the Company resulted in a holder of these notes beneficially owning more than 9.99% of the outstanding voting stock of the Company, then, the holder of these notes shall be granted pre-funded warrants in lieu of the Company’s common stock for the conversion of any principal and accrued but unpaid interest in excess of such threshold. The exercise price of one share of the Company’s common stock under this pre-funded warrant is equal to $0.001 (Note 11). The 2023 Notes Amendment qualified as a modification in accordance with FASB ASC 470 Debt As a result of the Merger (Note 4), pursuant to the terms thereof, the Convertible Notes converted into shares of EIP Common Stock which were subsequently converted into the right to exchange such shares for 897,272 shares of the Company’s common stock and, in certain cases, pre-funded warrants to purchase the Company’s common stock. Accordingly, the c n |
Note 10 - Commitments and Conti
Note 10 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 10. Commitments and Contingencies Operating Leases The Company has a short-term agreement to utilize membership-based co-working space in Charlottesville, Virginia and a short-term lease for office space in Boston, Massachusetts. Rent expense related to the Company’s short-term agreements was approximately $8,000 and $3,000 for the three months ended September 30, 2023 and 2022, respectively. Rent expense related to the Company’s short-term agreements was approximately $23,000 and $38,000 for the nine months ended September 30, 2023 and 2022, respectively. Research and Development Arrangements In the course of normal business operations, the Company would enter into agreements with universities and CROs to assist in the performance of research and development activities and contract manufacturers to assist with chemistry, manufacturing, and controls related expenses. Expenditures to CROs represented a significant cost in clinical development for the Company. The Company could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of cash. Defined Contribution Retirement Plan The Company has established its 401(k) Plan, which covers all employees who qualify under the terms of the plan. Eligible employees may elect to contribute to the 401(k) Plan up to 90% of their compensation, limited by the IRS-imposed maximum. The Company provides a safe harbor match with a maximum amount of 4% of the participant’s compensation. The Company made matching contributions under the 401(k) Plan of approximately $3,946 for the three and nine months ended September 30, 2023. Legal Proceedings On August 7, 2014, a complaint was filed in the Superior Court of Los Angeles County, California by Paul Feller, the former Chief Executive Officer of the Company’s legal predecessor under the caption Paul Feller v. RestorGenex Corporation, Pro Sports & Entertainment, Inc., ProElite, Inc. and Stratus Media Group, GmbH (Case No. BC553996). The complaint asserts various causes of action, including, among other things, promissory fraud, negligent misrepresentation, breach of contract, breach of employment agreement, breach of the covenant of good faith and fair dealing, violations of the California Labor Code and common counts. The plaintiff is seeking, among other things, compensatory damages in an undetermined amount, punitive damages, accrued interest and an award of attorneys’ fees and costs. On December 30, 2014, the Company filed a petition to compel arbitration and a motion to stay the action. On April 1, 2015, the plaintiff filed a petition in opposition to the Company’s petition to compel arbitration and a motion to stay the action. After a related hearing on April 14, 2015, the court granted the Company’s petition to compel arbitration and a motion to stay the action. On January 8, 2016, the plaintiff filed an arbitration demand with the American Arbitration Association. On November 19, 2018 at an Order to Show Cause Re Dismissal Hearing, the court found sufficient grounds not to dismiss the case and an arbitration hearing was scheduled, originally for November 2020 but later postponed due to the COVID-19 pandemic and related restrictions on gatherings in the State of California. In addition, following the November 2018 hearing, an automatic stay was placed on the arbitration in connection with the plaintiff filing for personal bankruptcy protection. On October 22, 2021, following a determination by the bankruptcy trustee not to pursue the claims and release them back to the plaintiff, the parties entered into a stipulation to abandon arbitration and return the matter to state court. A case management conference was held on February 23, 2022 at which an initial trial date of May 24, 2023 was set, and the parties have agreed to stipulate to mediation in advance of the trial. On October 20, 2022, the parties filed a joint stipulation to continue the trial and certain deadlines related to the mediation in order to allow plaintiff’s counsel to continue to seek treatment for an ongoing medical issue. On November 1, 2022, based on the parties joint stipulation, the court entered an order continuing the trial date to October 25, 2023 and, on October 6, 2023, the court entered an order further continuing the trial date to April 24, 2024. The Company believes that is has meritorious defenses to the claims alleged in this matter and is defending itself vigorously. However, at this stage, the Company is unable to predict the outcome and possible loss or range of loss, if any, associated with its resolution or any potential effect the matter may have on the Company’s financial position. Depending on the outcome or resolution of this matter, it could have a material effect on the Company’s financial position, results of operations and cash flows. |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity and Common Stock Warrants | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Equity [Text Block] | 11. Stockholders’ Equity (Deficit) and Common Stock Warrants On August 16, 2023 in connection with the closing of the Merger, the following is reflected on the condensed consolidated interim financial statements of convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2023: (i) the issuance of 795,905 shares of common stock and 101,367 pre-funded warrants upon the settlement of the Convertible Notes, (ii) the conversion of 3,331,201 shares of convertible preferred stock into 2,936,566 shares of common stock and 394,628 prefunded warrants, and (iii) the issuance of 1,360,244 shares of common stock to Diffusion stockholders as consideration for the Merger. In July 2023, EIP sold 63,422 shares of common stock at $12.78 per share (as adjusted for the Exchange Ratio) for net proceeds of approximately $0.8 million. Warrants As of September 30, 2023, the Company had the following warrants outstanding to acquire shares of its common stock: Warrants Exercise Outstanding Price Expiration Date Historical Diffusion common stock warrants 58,844 $26.27-$459.06 May 2024 through February 2026 Historical EIP common stock warrants 43,618 $ 19.81 April 2028 Pre-funded warrants issued related to closing of reverse recapitalization 495,995 $ 0.001 None 598,457 Upon completion of the Merger, the Convertible Notes and outstanding shares of EIP preferred stock converted into shares of EIP Common Stock which were subsequently converted into the right to exchange such shares for shares of the Company’s common stock or, in certain cases, pre-funded warrants to purchase the Company’s common stock. |
Note 12 - Stock-based Compensat
Note 12 - Stock-based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | 12. Stock-Based Compensation 2015 Equity Plan The 2015 Equity Plan provides for increases to the number of shares reserved for issuance thereunder each January 1 equal to 4.0% of the total shares of the Company’s common stock outstanding as of the immediately preceding December 31, unless a lesser amount is stipulated by the Compensation Committee of the Company’s b d 2018 Employee, Director and Consultant Equity Incentive Plan On March 28, 2018, EIP adopted the 2018 Plan, which was assumed by the Company pursuant to and in accordance with the terms of the Merger Agreement. Under the 2018 Plan, the Company may issue incentive stock options, non-qualified stock options, stock grants, and other stock-based awards to employees, directors, and consultants, as specified in the 2018 Plan and subject to applicable SEC and Nasdaq ten four-year one-year no The Company recorded stock-based compensation expense in the following expense categories of its unaudited interim condensed consolidated statements of operations for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Research and development $ 30,737 $ 41,546 $ 101,885 $ 134,559 General and administrative 78,431 40,838 140,775 118,288 Total stock-based compensation expense $ 109,168 $ 82,384 $ 242,660 $ 252,847 The following table summarizes the activity related to all stock option grants for the nine months ended September 30, 2023: Number of Options Weighted average exercise price per share Balance at January 1, 2023 114,516 $ 25.98 Options assumed in the Merger 52,574 $ 313.67 Granted 162,250 $ 5.33 Outstanding at September 30, 2023 329,340 $ 61.73 Exercisable at September 30, 2023 148,912 $ 111.77 The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: September 30, 2023 2022 Expected term (in years) 5.75 6.00 Risk-free interest rate 4.4% 1.9% Expected volatility 81.7% 80.3% Dividend yield 0.0% 0.0% No |
Note 13 - Restatement of Precio
Note 13 - Restatement of Preciously Issued (Unaudited) Interim Financial Statements | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Error Correction [Text Block] | 13. Restatement of Previously Issued (Unaudited) Interim Financial Statements While undergoing a review of its unaudited condensed consolidated interim financial statements as of September 30, 2023, the Company determined it had incorrectly expensed costs directly associated with the Merger during various periods in 2023. Fees such as accounting and legal related to the Merger should have been capitalized and net against proceeds of the Merger. This impacted previously reported amounts for deferred offering costs and general and administrative expense, among other line items in the unaudited condensed consolidated interim financial statements as of and for the three months ended March 31, 2023 and as of and for the six months ended June 30, 2023. The following tables set forth the effects of the error corrections on affected items within the Company’s previously reported unaudited interim condensed consolidated balance sheet as of the periods indicated had the adjustments been made in the corresponding quarter: June 30, 2023 As reported Adjusted As restated Deferred offering costs $ - $ 1,059,768 $ 1,059,768 Accumulated deficit $ (55,288,521 ) $ 1,059,768 $ (54,228,753 ) Total assets $ 2,304,448 $ 1,059,768 $ 3,364,216 Total liabilities, convertible preferred stock and stockholder’s deficit $ 2,304,448 $ 1,059,768 $ 3,364,216 Total stockholders’ deficit $ (36,171,172 ) $ 1,059,768 $ (35,111,404 ) March 31, 2023 As reported Adjusted As restated Deferred offering costs $ - $ 638,018 $ 638,018 Accumulated deficit $ (53,441,270 ) $ 638,018 $ (52,803,252 ) Total assets $ 3,305,477 $ 638,018 $ 3,943,495 Total liabilities, convertible preferred stock and stockholder’s deficit $ 3,305,477 $ 638,018 $ 3,943,495 Total stockholders’ deficit $ (34,386,173 ) $ 638,018 $ (33,748,155 ) The following tables set forth the effects of the error corrections on affected items within the Company’s previously reported unaudited interim condensed statements of operations for the periods indicated had the adjustments been made in the corresponding quarters: Six Months Ended June 30, 2023 As reported Adjusted As restated General and administrative expense $ 3,053,234 $ (1,059,768 ) $ 1,993,466 Total operating expenses $ 6,844,896 $ (1,059,768 ) $ 5,785,128 Loss from operations $ (3,717,084 ) $ 1,059,768 $ (2,657,316 ) Net loss $ (3,019,605 ) $ 1,059,768 $ (1,959,837 ) Net loss per share of common stock, basic and diluted $ (0.67 ) $ 0.23 $ (0.44 ) Three Months Ended March 31, 2023 As reported Adjusted As restated General and administrative expense $ 1,638,931 $ (638,018 ) $ 1,000,913 Total operating expenses $ 3,472,205 $ (638,018 ) $ 2,834,187 Loss from operations $ (2,064,337 ) $ 638,018 $ (1,426,319 ) Net loss $ (1,172,354 ) $ 638,018 $ (534,336 ) Net loss per share of common stock, basic and diluted $ (0.26 ) $ 0.14 $ (0.12 ) |
Note 14 - Subsequent Events
Note 14 - Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 14. Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated interim financial statements. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of presentation The unaudited condensed consolidated interim financial statements have been prepared in conformity with US GAAP as defined by the FASB. |
Fiscal Period, Policy [Policy Text Block] | Unaudited condensed consolidated interim financial statements The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company in accordance with US GAAP for interim information and pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in unaudited condensed consolidated interim financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2022, which begin on page F-30 of the Difffusions Amended Registration Statement on Form S-4 as filed with the SEC on July 11, 2023. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. |
Consolidation, Policy [Policy Text Block] | Consolidation The unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Use of estimates The preparation of unaudited condensed consolidated interim financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, grant revenue, expenses, and related disclosures. On an ongoing basis, the Company’s management evaluates its estimates, including estimates related to money market accounts, clinical trial accruals, stock-based compensation expense, grant revenue, Convertible Notes, and expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ significantly from those estimates or assumptions. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains its cash and cash equivalent balances with financial institutions that management believes are creditworthy. The Company has no financial instruments with off-balance-sheet risk of loss. The Company has not experienced any losses in such accounts. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash and cash equivalents. Cash equivalents, which consist of amounts invested in money market funds, are stated at fair value. There are no unrealized gains or losses on the money market funds for the period ended September 30, 2023. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, accounts payable, previously outstanding c n c n c n c s c s The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 Level 2 Level 3 The following table presents the Company’s assets that are measured at fair value on a recurring basis: September 30, 2023 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (money market accounts) $ 10,424,675 $ - $ - Total assets measured at fair value $ 10,424,675 $ - $ - December 31, 2022 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (money market accounts) $ 4,093,579 $ - $ - Total assets measured at fair value $ 4,093,579 $ - $ - Liabilities Convertible Notes $ - $ - $ 12,414,000 Total liabilities measured at fair value $ - $ - $ 12,414,000 The following table presents a roll-forward of the fair value of the Convertible Notes (Note 9) for which fair value is determined by Level 3 inputs: Nine Months Ended September 30, 2023 September 30, 2022 Beginning balance $ 12,414,000 $ 10,025,000 Fair value adjustment (5,424,251 ) 2,389,000 Reclassification to additional paid in capital upon conversion (6,989,749 ) - Ending balance $ - $ 12,414,000 Three Months Ended September 30, 2023 September 30, 2022 Beginning balance $ 11,768,000 $ 12,414,000 Fair value adjustment (4,778,251 ) - Reclassification to additional paid in capital upon conversion (6,989,749 ) - Ending balance $ - $ 12,414,000 Valuation techniques used to measure fair value maximize the use of relevant observable inputs and minimize the use of unobservable inputs (Note 9). The Company’s c n There were no transfers among Level 1, Level 2 or Level 3 categories in the nine months ended September 30, 2023 or in the year ended December 31, 2022. The fair value of the 2020 N N N N N N N N |
Lessee, Leases [Policy Text Block] | Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases”, which establishes a ROU model. That requires a lessee to recognize an ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the Statement of Operations as well as the reduction of the ROU asset. The new standard provides a number of optional practical expedients in transition. The Company has elected to apply (i) the practical expedient, which allows us to not separate lease and non-lease components, for new leases and (ii) the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new standard. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has elected to combine lease and non-lease components as a single component. Operating leases will be recognized on the unaudited interim condensed consolidated balance sheet as ROU assets, lease liabilities current and lease liabilities non-current. Fixed rent payments are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Research and development costs are expensed as incurred and consist primarily of new product development. Research and development costs include salaries and benefits, consultants’ fees, process development costs and stock-based compensation, as well as fees paid to third parties that conduct certain research and development activities on the Company’s behalf. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers. The Company records accrued expenses for estimated preclinical study and clinical trial expenses. Estimates are based on the services performed pursuant to contracts with research institutions, contract research organizations in connection with clinical studies, investigative sites in connection with clinical studies, vendors in connection with preclinical development activities, and contract manufacturing organizations in connection with the production of materials for clinical trials. Further, the Company accrues expenses related to clinical trials based on the level of subject enrollment and activity according to the related agreement. The Company monitors subject enrollment levels and related activity to the extent reasonably possible and makes judgments and estimates in determining the accrued balance in each reporting period. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development. If the Company underestimates or overestimates the level of services performed or the costs of these services, actual expenses could differ from estimates. To date, the Company has not experienced significant changes in its estimates of preclinical studies and clinical trial accruals. |
Legal Costs, Policy [Policy Text Block] | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the unaudited interim condensed consolidated statement of operations. |
Share-Based Payment Arrangement [Policy Text Block] | Stock-based Compensation Stock-based compensation for employee and non-employee awards is measured on the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period. The fair value of stock options to purchase common stock are measured using the Black-Scholes option pricing model. The Company accounts for forfeitures as they occur. The fair value of stock options is determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and estimation by management. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Rate |
Revenue [Policy Text Block] | Revenue Recognition The Company generates revenue from government contracts that reimburse the Company for certain allowable costs for funded projects. The Company recognizes funding received as grant revenue for the Company’s grant from the NIA, rather than as a reduction of research and development expenses, because the Company is the principal in conducting the research and development activities and these contracts are central to its ongoing operations. Revenue is recognized as the qualifying expenses related to the contracts are incurred. Revenue recognized upon incurring qualifying expenses in advance of receipt of funding is recorded in the Company’s unaudited interim condensed consolidated balance sheet as accounts receivable. Amounts received in advance of services rendered are recorded as deferred grant revenue. The related costs incurred by the Company are included in research and development expense in the Company’s unaudited interim condensed consolidated statements of operations. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated interim financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to recover or settle. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income for the period that includes the enactment date. The deferred tax assets are recognized to the extent the Company believes that these assets are more likely than not to be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance. The Company records uncertain tax positions using a two-step process. First, the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position. Second, for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits on the interest expense line and other expense line, respectively, in the accompanying statements of operations. Accrued interest and penalties are included on the related liability lines in the unaudited interim condensed consolidated balance sheet. |
Earnings Per Share, Policy [Policy Text Block] | Net Income ( l p s Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during each period. Diluted net income (loss) per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, Convertible Notes (inclusive of change in fair value of Convertible Notes), stock options, and warrants, which would result in the issuance of incremental shares of common stock. For diluted net loss per share in periods where the Company has a net loss, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation. For the three and nine months ended September 30, 2023, the Company was in a net income position and calculated the diluted net income per share by dividing the Company’s net income by the dilutive weighted average number of share outstanding during the periods, determined using the treasury stock method and the average stock price during the period. The pre-funded warrants to purchase common stock issued in connection with the Merger are included in the calculation of basic and diluted net loss per share as the exercise price of $0.001 per share is non-substantive and is virtually assured. The pre-funded warrants are more fully described in Note 11. A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share calculations are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 2,150,362 $ (882,623 ) $ 190,525 $ (4,275,647 ) Change in fair value of c n (4,778,251 ) - (5,424,251 ) - Adjusted net income (loss) $ (2,627,889 ) $ (882,623 ) $ (5,233,726 ) $ (4,275,647 ) Denominator Weighted average shares outstanding, basic 3,308,302 518,140 1,458,415 518,140 Weighted average c n 458,398 - 750,992 - Weighted average shares outstanding, diluted 3,766,700 518,140 2,209,407 518,140 Net income (loss), basic $ 0.65 $ (1.70 ) $ 0.13 $ (8.25 ) Net income (loss), dilutive $ (0.70 ) $ (1.70 ) $ (2.37 ) $ (8.25 ) The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive: Three and Nine Months Ended September 30, 2023 2022 Preferred Series A-1 - 1,960,600 Preferred Series A-2 - 335,711 Preferred Series B - 1,034,890 Warrants 598,457 43,618 Stock options 329,340 141,831 Total 927,797 3,516,650 |
Segment Reporting, Policy [Policy Text Block] | Segments The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a condensed consolidated basis for purposes of allocating resources. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued But Not Yet Adopted Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in US GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company elected to early adopt ASU 2020-06 during the year ended December 31, 2022 using the modified retrospective method, which did not have a material impact on the financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted ASU No. 2016-13 on January 1, 2023 which did not have a material impact on the financial statements. In January 2021, the FASB issued ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope” (“ASU 2021-01”), which was effective immediately and permits entities to elect certain optional expedients and exceptions when accounting for derivatives and certain hedging relationships affected by changes in interest rates and the transition. Additionally, ASU 2022-06 “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. The new guidance is effective for fiscal years beginning after December 31, 2024. The Company does not currently believe that this transition from LIBOR will have a material impact on its financial statements. |
Note 3 - Summary of Significa_2
Note 3 - Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | September 30, 2023 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (money market accounts) $ 10,424,675 $ - $ - Total assets measured at fair value $ 10,424,675 $ - $ - December 31, 2022 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (money market accounts) $ 4,093,579 $ - $ - Total assets measured at fair value $ 4,093,579 $ - $ - Liabilities Convertible Notes $ - $ - $ 12,414,000 Total liabilities measured at fair value $ - $ - $ 12,414,000 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Nine Months Ended September 30, 2023 September 30, 2022 Beginning balance $ 12,414,000 $ 10,025,000 Fair value adjustment (5,424,251 ) 2,389,000 Reclassification to additional paid in capital upon conversion (6,989,749 ) - Ending balance $ - $ 12,414,000 Three Months Ended September 30, 2023 September 30, 2022 Beginning balance $ 11,768,000 $ 12,414,000 Fair value adjustment (4,778,251 ) - Reclassification to additional paid in capital upon conversion (6,989,749 ) - Ending balance $ - $ 12,414,000 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 2,150,362 $ (882,623 ) $ 190,525 $ (4,275,647 ) Change in fair value of c n (4,778,251 ) - (5,424,251 ) - Adjusted net income (loss) $ (2,627,889 ) $ (882,623 ) $ (5,233,726 ) $ (4,275,647 ) Denominator Weighted average shares outstanding, basic 3,308,302 518,140 1,458,415 518,140 Weighted average c n 458,398 - 750,992 - Weighted average shares outstanding, diluted 3,766,700 518,140 2,209,407 518,140 Net income (loss), basic $ 0.65 $ (1.70 ) $ 0.13 $ (8.25 ) Net income (loss), dilutive $ (0.70 ) $ (1.70 ) $ (2.37 ) $ (8.25 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Three and Nine Months Ended September 30, 2023 2022 Preferred Series A-1 - 1,960,600 Preferred Series A-2 - 335,711 Preferred Series B - 1,034,890 Warrants 598,457 43,618 Stock options 329,340 141,831 Total 927,797 3,516,650 |
Note 4 - Merger (Tables)
Note 4 - Merger (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | August 16, 2023 Cash and cash equivalents $ 12,705,140 Prepaid and other assets 406,488 Accounts payable and accrued expenses (1,223,871 ) Total net assets assumed 11,887,757 Minus: Transaction costs (1,548,643 ) Total net assets assumed minus transaction costs $ 10,339,114 |
Note 6 - Prepaid Expenses and_2
Note 6 - Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | September 30, December 31, 2023 2022 Prepaid clinical expenses $ 670,851 $ - Insurance 604,275 9,937 Rent - 2,455 Other 143,619 51,735 Total $ 1,418,745 $ 64,127 |
Note 7 - Accrued Expenses and_2
Note 7 - Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Other Current Liabilities [Table Text Block] | September 30, December 31, 2023 2022 Professional fees $ 492,772 $ 206,675 Employee compensation costs 696,570 364,070 Clinical development costs 71,979 23,185 Other 121,501 50,322 Total $ 1,382,822 $ 644,252 |
Note 11 - Stockholders' Equit_2
Note 11 - Stockholders' Equity and Common Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Warrants Exercise Outstanding Price Expiration Date Historical Diffusion common stock warrants 58,844 $26.27-$459.06 May 2024 through February 2026 Historical EIP common stock warrants 43,618 $ 19.81 April 2028 Pre-funded warrants issued related to closing of reverse recapitalization 495,995 $ 0.001 None 598,457 |
Note 12 - Stock-based Compens_2
Note 12 - Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Research and development $ 30,737 $ 41,546 $ 101,885 $ 134,559 General and administrative 78,431 40,838 140,775 118,288 Total stock-based compensation expense $ 109,168 $ 82,384 $ 242,660 $ 252,847 |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Number of Options Weighted average exercise price per share Balance at January 1, 2023 114,516 $ 25.98 Options assumed in the Merger 52,574 $ 313.67 Granted 162,250 $ 5.33 Outstanding at September 30, 2023 329,340 $ 61.73 Exercisable at September 30, 2023 148,912 $ 111.77 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | September 30, 2023 2022 Expected term (in years) 5.75 6.00 Risk-free interest rate 4.4% 1.9% Expected volatility 81.7% 80.3% Dividend yield 0.0% 0.0% |
Note 13 - Restatement of Prec_2
Note 13 - Restatement of Preciously Issued (Unaudited) Interim Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | June 30, 2023 As reported Adjusted As restated Deferred offering costs $ - $ 1,059,768 $ 1,059,768 Accumulated deficit $ (55,288,521 ) $ 1,059,768 $ (54,228,753 ) Total assets $ 2,304,448 $ 1,059,768 $ 3,364,216 Total liabilities, convertible preferred stock and stockholder’s deficit $ 2,304,448 $ 1,059,768 $ 3,364,216 Total stockholders’ deficit $ (36,171,172 ) $ 1,059,768 $ (35,111,404 ) March 31, 2023 As reported Adjusted As restated Deferred offering costs $ - $ 638,018 $ 638,018 Accumulated deficit $ (53,441,270 ) $ 638,018 $ (52,803,252 ) Total assets $ 3,305,477 $ 638,018 $ 3,943,495 Total liabilities, convertible preferred stock and stockholder’s deficit $ 3,305,477 $ 638,018 $ 3,943,495 Total stockholders’ deficit $ (34,386,173 ) $ 638,018 $ (33,748,155 ) Six Months Ended June 30, 2023 As reported Adjusted As restated General and administrative expense $ 3,053,234 $ (1,059,768 ) $ 1,993,466 Total operating expenses $ 6,844,896 $ (1,059,768 ) $ 5,785,128 Loss from operations $ (3,717,084 ) $ 1,059,768 $ (2,657,316 ) Net loss $ (3,019,605 ) $ 1,059,768 $ (1,959,837 ) Net loss per share of common stock, basic and diluted $ (0.67 ) $ 0.23 $ (0.44 ) Three Months Ended March 31, 2023 As reported Adjusted As restated General and administrative expense $ 1,638,931 $ (638,018 ) $ 1,000,913 Total operating expenses $ 3,472,205 $ (638,018 ) $ 2,834,187 Loss from operations $ (2,064,337 ) $ 638,018 $ (1,426,319 ) Net loss $ (1,172,354 ) $ 638,018 $ (534,336 ) Net loss per share of common stock, basic and diluted $ (0.26 ) $ 0.14 $ (0.12 ) |
Note 1 - The Company and Desc_2
Note 1 - The Company and Description of Business (Details Textual) | Aug. 16, 2023 shares | Sep. 30, 2023 shares |
Pre-funded Warrants [Member] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | 495,995 | |
Merger Agreement [Member] | ||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 4,314,033 | |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 0.1151 | |
Reverse Stock Split [Member ] | ||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 1.5 |
Note 2 - Liquidity and Capita_2
Note 2 - Liquidity and Capital Resources (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||
Aug. 16, 2023 | Jul. 31, 2023 | Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Retained Earnings (Accumulated Deficit) | $ (52,078,391) | $ (54,228,753) | $ (52,803,252) | $ (52,268,916) | ||||
Government Assistance, Amount, Cumulative | $ 21,000,000 | |||||||
Government Assistance, Transaction Duration | 3 years | |||||||
Proceeds from Issuance of Common Stock | $ 800,000 | $ 810,000 | $ 0 | |||||
Merger Agreement [Member] | ||||||||
Cash Acquired from Acquisition | $ 12,700,000 |
Note 3 - Summary of Significa_3
Note 3 - Summary of Significant Accounting Policies (Details Textual) | 9 Months Ended | |
Sep. 30, 2023 $ / shares | Jun. 30, 2023 $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0% | |
Prefunded Warrant [Member] | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.001 | $ 0.001 |
Convertible Debt [Member] | Measurement Input, Expected Term [Member] | ||
Debt Instrument, Measurement Input | 0.94 | |
Convertible Debt [Member] | Measurement Input, Price Volatility [Member] | ||
Debt Instrument, Measurement Input | 0.800 | |
Convertible Debt [Member] | Measurement Input, Cost to Sell [Member] | ||
Debt Instrument, Measurement Input | 0.552 |
Note 3 - Summary of Significa_4
Note 3 - Summary of Significant Accounting Policies - Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Inputs, Level 1 [Member] | ||
Cash equivalents (money market accounts) | $ 10,424,675 | $ 4,093,579 |
Total assets measured at fair value | 10,424,675 | 4,093,579 |
Convertible Notes | 0 | |
Total liabilities measured at fair value | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Cash equivalents (money market accounts) | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Convertible Notes | 0 | |
Total liabilities measured at fair value | 0 | |
Fair Value, Inputs, Level 3 [Member] | ||
Cash equivalents (money market accounts) | $ 0 | 0 |
Total assets measured at fair value | 0 | |
Convertible Notes | 12,414,000 | |
Total liabilities measured at fair value | $ 12,414,000 |
Note 3 - Summary of significa_5
Note 3 - Summary of significant Accounting Policies - Roll-forward of Convertible Notes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Beginning balance | $ 11,768,000 | $ 12,414,000 | $ 12,414,000 | $ 10,025,000 |
Fair value adjustment | (4,778,251) | 0 | (5,424,251) | 2,389,000 |
Reclassification to additional paid in capital upon conversion | (6,989,749) | 0 | (6,989,749) | 0 |
Ending balance | $ 0 | $ 12,414,000 | $ 0 | $ 12,414,000 |
Note 3 - Summary of Significa_6
Note 3 - Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net income | $ 2,150,362 | $ (534,336) | $ (882,623) | $ (1,959,837) | $ 190,525 | $ (4,275,647) |
Change in fair value of convertible notes | 4,778,251 | 0 | 5,424,251 | 0 | ||
Adjusted net income (loss) | $ (2,627,889) | $ (882,623) | $ (5,233,726) | $ (4,275,647) | ||
Weighted average shares outstanding, basic (in shares) | 3,308,302 | 518,140 | 1,458,415 | 518,140 | ||
Weighted average dilutive stock options (in shares) | 458,398 | 0 | 750,992 | 0 | ||
Weighted average shares outstanding, diluted (in shares) | 3,766,700 | 518,140 | 2,209,407 | 518,140 | ||
Net income (loss), basic (in dollars per share) | $ 0.65 | $ (0.12) | $ (1.70) | $ (0.44) | $ 0.13 | $ (8.25) |
Net income (loss), dilutive (in dollars per share) | $ (0.70) | $ (1.70) | $ (2.37) | $ (8.25) |
Note 3 - Summary of Significa_7
Note 3 - Summary of Significant Accounting Policies - Outstanding Dilutive Securities (Details) - shares | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive securities (in shares) | 927,797 | 3,516,650 |
Series A-1 Preferred Stock [Member] | ||
Antidilutive securities (in shares) | 0 | 1,960,600 |
Series A-2 Preferred Stock [Member] | ||
Antidilutive securities (in shares) | 0 | 335,711 |
Series B Preferred Stock [Member] | ||
Antidilutive securities (in shares) | 0 | 1,034,890 |
Warrant [Member] | ||
Antidilutive securities (in shares) | 598,457 | 43,618 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive securities (in shares) | 329,340 | 141,831 |
Note 4 - Merger (Details Textua
Note 4 - Merger (Details Textual) - shares | Sep. 30, 2023 | Aug. 16, 2023 | Dec. 31, 2022 |
Common Stock, Shares, Outstanding | 5,674,354 | 5,674,277 | 518,140 |
Merger Agreement [Member] | |||
Business Acquisition, Percentage Stock Owned by Legacy Holders | 76% |
Note 4 - Merger - Details of Me
Note 4 - Merger - Details of Merger (Details) - Merger Agreement [Member] | Aug. 16, 2023 USD ($) |
Cash and cash equivalents | $ 12,705,140 |
Prepaid and other assets | 406,488 |
Accounts payable and accrued expenses | (1,223,871) |
Total net assets assumed | 11,887,757 |
Minus: Transaction costs | (1,548,643) |
Total net assets assumed minus transaction costs | $ 10,339,114 |
Note 5 - Significant Agreemen_2
Note 5 - Significant Agreements and Contracts (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2014 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | |
Research and Development Expense | $ 1,791,487 | $ 330,543 | $ 5,583,149 | $ 955,784 | ||||||
Government Assistance, Amount, Cumulative | $ 21,000,000 | |||||||||
Revenues | 1,526,482 | $ 0 | 4,654,294 | $ 0 | ||||||
Deferred Revenue, Current | 547,051 | 547,051 | $ 0 | |||||||
Vertex Option and License Agreement [Member] | ||||||||||
Research and Development Expense | $ 100,000 | |||||||||
Contractual Obligation | 117,000,000 | 117,000,000 | ||||||||
Payments for License Agreement | $ 100,000 | |||||||||
National Institute of Aging Grant [Member] | ||||||||||
Government Assistance, Amount, Cumulative | $ 21,000,000 | |||||||||
Revenues | 1,600,000 | 4,700,000 | ||||||||
Proceeds From Grants | 5,200,000 | |||||||||
Grant Funding Remaining | 15,800,000 | 15,800,000 | ||||||||
Deferred Revenue, Current | $ 500,000 | $ 500,000 | ||||||||
National Institute of Aging Grant [Member] | Forecast [Member] | ||||||||||
Government Assistance, Amount | $ 6,200,000 | $ 8,100,000 | $ 6,700,000 |
Note 6 - Prepaid Expenses and_3
Note 6 - Prepaid Expenses and Other Current Assets - Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid clinical expenses | $ 670,851 | $ 0 |
Insurance | 604,275 | 9,937 |
Rent | 0 | 2,455 |
Other | 143,619 | 51,735 |
Total | $ 1,418,745 | $ 64,127 |
Note 7 - Accrued Expenses and_3
Note 7 - Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Employee compensation costs | $ 492,772 | $ 206,675 |
Professional fees | 696,570 | 364,070 |
Clinical development costs | 71,979 | 23,185 |
Other | 121,501 | 50,322 |
Total | $ 1,382,822 | $ 644,252 |
Note 8 - Line of Credit (Detail
Note 8 - Line of Credit (Details Textual) - Line of Credit [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500 | ||
Line of Credit Facility, Interest Rate at Period End | 6.93% | 6.08% | |
Long-Term Line of Credit | $ 0 | $ 0 | |
Debt Issuance Costs, Line of Credit Arrangements, Net | $ 0 | $ 0 | |
LIBOR [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% |
Note 9 - Convertible Notes (Det
Note 9 - Convertible Notes (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Aug. 16, 2023 shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | Jun. 30, 2023 $ / shares | |
Liabilities, Fair Value Adjustment | $ (5,424,251) | $ 1,769,000 | ||||||
Conversion of Debt into Common Stock [Member] | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 795,905 | 795,905 | ||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | shares | 101,367 | 101,367 | ||||||
Prefunded Warrant [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Convertible Debt [Member] | ||||||||
Liabilities, Fair Value Adjustment | $ 4,800,000 | $ 0 | $ 5,400,000 | $ (1,800,000) | ||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 1.47 | |||||||
Debt Instrument, Convertible, Discount | 30% | |||||||
Debt Instrument, Convertible, Maximum Beneficial Ownership | 9.99% | |||||||
Payments of Debt Issuance Costs | 50,000 | |||||||
Debt Instrument, Convertible, Number of Equity Instruments | 897,272 | |||||||
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature | $ 7,000,000 | |||||||
The 2020 Notes [Member] | ||||||||
Proceeds from Issuance of Long-Term Debt | $ 5,100,000 | |||||||
The 2021 Notes [Member] | ||||||||
Proceeds from Issuance of Long-Term Debt | $ 6,000,000 |
Note 10 - Commitments and Con_2
Note 10 - Commitments and Contingencies (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Lease, Expense | $ 8,000 | $ 3,000 | $ 23,000 | $ 38,000 |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 90% | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4% | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 3,946 |
Note 11 - Stockholders' Equit_3
Note 11 - Stockholders' Equity and Common Stock Warrants (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Aug. 16, 2023 | Jul. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Warrant or Right, Outstanding | 598,457 | |||
Stock Issued During Period, Shares, Acquisitions | 1,360,244 | |||
Stock Issued During Period, Shares, New Issues | 63,422 | |||
Shares Issued, Price Per Share | $ 12.78 | |||
Proceeds from Issuance of Common Stock | $ 800,000 | $ 810,000 | $ 0 | |
Pre-funded Warrants [Member] | ||||
Class of Warrant or Right, Outstanding | 394,628 | |||
Conversion of Preferred Stock into Common Stock [Member] | ||||
Conversion of Stock, Shares Converted | 3,331,201 | |||
Conversion of Stock, Shares Issued | 2,936,566 | |||
Conversion of Debt into Common Stock [Member] | ||||
Debt Conversion, Converted Instrument, Shares Issued | 795,905 | 795,905 | ||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 101,367 | 101,367 |
Note 11 - Stockholders' Equit_4
Note 11 - Stockholders' Equity and Common Stock Warrants - Warrants Outstanding to Acquire Shares of Its Common Stock (Details) - $ / shares | Sep. 30, 2023 | Jun. 30, 2023 |
Warrants outstanding (in shares) | 598,457 | |
Historical Diffusion Common Stock Warrants [Member] | ||
Warrants outstanding (in shares) | 58,844 | |
Historical Diffusion Common Stock Warrants [Member] | Minimum [Member] | ||
Exercise price of warrants (in dollars per share) | $ 26.27 | |
Historical Diffusion Common Stock Warrants [Member] | Maximum [Member] | ||
Exercise price of warrants (in dollars per share) | $ 459.06 | |
Historical EIP Common Stock Warrants [Member] | ||
Warrants outstanding (in shares) | 43,618 | |
Exercise price of warrants (in dollars per share) | $ 19.81 | |
Prefunded Warrant [Member] | ||
Warrants outstanding (in shares) | 495,995 | |
Exercise price of warrants (in dollars per share) | $ 0.001 | $ 0.001 |
Note 12 - Stock-based Compens_3
Note 12 - Stock-based Compensation (Details Textual) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 0 | 0 |
Share-Based Payment Arrangement, Option [Member] | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 1 | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 3 months 18 days | |
Equity Incentive Plan 2015 [Member] | ||
Percentage of Total Shares Eligible for Plan Reserve, On an Annual Basis | 4% | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 614 | |
The 2018 Employee, Director and Consultant Equity Incentive Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 0 | |
The 2018 Employee, Director and Consultant Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 10 years | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 4 years | |
The 2018 Employee, Director and Consultant Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 1 year | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 25% |
Note 12 - Stock-based Compens_4
Note 12 - Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share based compensation expense | $ 109,168 | $ 82,384 | $ 242,660 | $ 252,847 |
Research and Development Expense [Member] | ||||
Share based compensation expense | 30,737 | 41,546 | 101,885 | 134,559 |
General and Administrative Expense [Member] | ||||
Share based compensation expense | $ 78,431 | $ 40,838 | $ 140,775 | $ 118,288 |
Note 12 - Stock-based Compens_5
Note 12 - Stock-based Compensation - Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Balance, number of shares (in shares) | shares | 114,516 |
Balance, weighted average exercise price (in dollars per share) | $ / shares | $ 25.98 |
Granted, number of shares (in shares) | shares | 52,574 |
Granted, weighted average exercise price (in dollars per share) | $ / shares | $ 313.67 |
Outstanding , number of shares (in shares) | shares | 162,250 |
Outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 5.33 |
Vested and expected to vest, number of shares (in shares) | shares | 329,340 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares | $ 61.73 |
Exercisable, number of shares (in shares) | shares | 148,912 |
Exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 111.77 |
Note 12 - Share-based Compensat
Note 12 - Share-based Compensation - Assumptions (Details) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Dividend yield | 0% | |
Share-Based Payment Arrangement, Option [Member] | ||
Expected term (in years) (Year) | 5 years 9 months | 6 years |
Risk-free interest rate | 4.40% | 1.90% |
Expected volatility | 81.70% | 80.30% |
Dividend yield | 0% | 0% |
Note 13 - Restatement of Previo
Note 13 - Restatement of Previously Issued (Unaudited) Interim Financial Statements - Schedule of Error Corrections (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Deferred offering costs | $ 1,059,768 | $ 1,059,768 | $ 638,018 | |||||
General and administrative | $ 2,410,124 | 1,000,913 | $ 573,511 | 1,993,466 | $ 4,403,590 | $ 1,580,927 | ||
Accumulated deficit | (52,078,391) | (54,228,753) | (54,228,753) | (52,078,391) | (52,803,252) | $ (52,268,916) | ||
Total operating expenses | 4,201,611 | 2,834,187 | 904,054 | 5,785,128 | 9,986,739 | 2,536,711 | ||
Total assets | 12,037,863 | 3,364,216 | 3,364,216 | 12,037,863 | 3,943,495 | 4,157,706 | ||
Loss from operations | (2,675,129) | (1,426,319) | (904,054) | (2,657,316) | (5,332,445) | (2,536,711) | ||
Total liabilities, convertible preferred stock and stockholder’s deficit | 12,037,863 | 3,364,216 | 3,364,216 | 12,037,863 | 3,943,495 | 4,157,706 | ||
Net income | 2,150,362 | (534,336) | $ (882,623) | (1,959,837) | 190,525 | $ (4,275,647) | ||
Total stockholders’ deficit | $ 9,574,200 | $ (35,111,404) | $ (35,111,404) | $ 9,574,200 | (33,748,155) | $ (33,285,059) | ||
Net income (loss) per share of common stock - basic (in dollars per share) | $ 0.65 | $ (0.12) | $ (1.70) | $ (0.44) | $ 0.13 | $ (8.25) | ||
Previously Reported [Member] | ||||||||
Deferred offering costs | $ 0 | $ 0 | 0 | |||||
General and administrative | 1,638,931 | 3,053,234 | ||||||
Accumulated deficit | (55,288,521) | (55,288,521) | (53,441,270) | |||||
Total operating expenses | 3,472,205 | 6,844,896 | ||||||
Total assets | 2,304,448 | 2,304,448 | 3,305,477 | |||||
Loss from operations | (2,064,337) | (3,717,084) | ||||||
Total liabilities, convertible preferred stock and stockholder’s deficit | 2,304,448 | 2,304,448 | 3,305,477 | |||||
Net income | (1,172,354) | (3,019,605) | ||||||
Total stockholders’ deficit | $ (36,171,172) | $ (36,171,172) | (34,386,173) | |||||
Net income (loss) per share of common stock - basic (in dollars per share) | $ (0.26) | $ (0.67) | ||||||
Revision of Prior Period, Error Correction, Adjustment [Member] | ||||||||
Deferred offering costs | $ 1,059,768 | $ 1,059,768 | 638,018 | |||||
General and administrative | (638,018) | (1,059,768) | ||||||
Accumulated deficit | 1,059,768 | 1,059,768 | 638,018 | |||||
Total operating expenses | (638,018) | (1,059,768) | ||||||
Total assets | 1,059,768 | 1,059,768 | 638,018 | |||||
Loss from operations | 638,018 | 1,059,768 | ||||||
Total liabilities, convertible preferred stock and stockholder’s deficit | 1,059,768 | 1,059,768 | 638,018 | |||||
Net income | 638,018 | 1,059,768 | ||||||
Total stockholders’ deficit | $ 1,059,768 | $ 1,059,768 | $ 638,018 | |||||
Net income (loss) per share of common stock - basic (in dollars per share) | $ 0.14 | $ 0.23 |