Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 01, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | Acer Therapeutics Inc. | |
Entity Central Index Key | 0001069308 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2023 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | ACER | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 24,463,726 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-33004 | |
Entity Tax Identification Number | 32-0426967 | |
Entity Address, Address Line One | One Gateway Center | |
Entity Address, Address Line Two | Suite 356 | |
Entity Address, Address Line Three | 300 Washington Street | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02458 | |
City Area Code | 844 | |
Local Phone Number | 902-6100 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,553,416 | $ 2,329,218 |
Inventory | 4,600,618 | |
Prepaid expenses | 583,339 | 759,292 |
Deferred financing costs | 408,000 | |
Other current assets | 14,638 | 20,188 |
Total current assets | 6,752,011 | 3,516,698 |
Property and equipment, net | 54,273 | 214,578 |
Other assets: | ||
Goodwill | 7,647,267 | 7,647,267 |
Other non-current assets | 194,725 | 245,683 |
Total assets | 14,648,276 | 11,624,226 |
Current liabilities: | ||
Accounts payable | 5,713,655 | 3,813,280 |
Accrued expenses | 4,724,835 | 3,657,394 |
Deferred collaboration funding, current | 181,888 | 8,412,971 |
Schelling Promissory Note payable to an officer | 1,000,000 | |
Other current liabilities | 742,922 | 741,425 |
Convertible note payable, current, at fair value | 13,078,200 | |
SWK Loans payable, current, at fair value | 17,986,848 | 2,326,630 |
Total current liabilities | 43,428,348 | 18,951,700 |
Deferred collaboration funding, non-current | 4,365,310 | |
SWK Loans payable, non-current, at fair value | 3,240,601 | |
Convertible note payable, at fair value | 6,047,532 | |
Other non-current liabilities | 100,836 | 145,665 |
Total liabilities | 47,894,494 | 28,385,498 |
Commitments and Contingencies (Note 8) | ||
Stockholders’ deficit: | ||
Preferred stock, $0.0001 par value; authorized 10,000,000 shares; none issued and outstanding | ||
Common stock, $0.0001 par value; authorized 150,000,000 shares; 23,421,534 and 19,624,280 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 2,446 | 1,962 |
Additional paid-in capital | 131,870,031 | 123,984,035 |
Accumulated deficit | (165,118,695) | (140,747,269) |
Total stockholders’ deficit | (33,246,218) | (16,761,272) |
Total liabilities and stockholders’ deficit | $ 14,648,276 | $ 11,624,226 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 24,463,726 | 19,624,280 |
Common stock, shares outstanding | 24,463,726 | 19,624,280 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating expenses: | ||||
Research and development (net of collaboration funding of $600,072 and $1,648,631 in the three months ended June 30, 2023 and 2022, respectively, and of $1,318,482 and $4,648,002 in the six months ended June 30, 2023 and 2022, respectively) | $ 1,440,717 | $ 3,426,773 | $ 3,861,837 | $ 6,598,412 |
General and administrative (net of collaboration funding of $1,404,695 and $3,257,701 in the three months ended June 30, 2023 and 2022, respectively, and of $2,547,291 and $5,629,876 in the six months ended June 30, 2023 and 2022, respectively) | 2,853,760 | 3,638,073 | 5,421,942 | 7,513,674 |
Total operating expenses | 4,294,477 | 7,064,846 | 9,283,779 | 14,112,086 |
Loss from operations | (4,294,477) | (7,064,846) | (9,283,779) | (14,112,086) |
Other income (expense), net: | ||||
Costs of debt issuance | (200,129) | (577,225) | (1,368,194) | |
Loss on extinguishment of debt | (350,000) | (8,541,494) | ||
Changes in fair value of debt instruments (loss) gain | (2,806,538) | 4,729,460 | (5,018,223) | 3,767,060 |
Interest and other income (expense), net | (639,610) | (139,234) | (926,147) | (142,072) |
Foreign currency transaction (loss) gain | (95) | 7,713 | (24,558) | 9,252 |
Total other income (expense), net | (3,796,243) | 4,397,810 | (15,087,647) | 2,266,046 |
Net loss | $ (8,090,720) | $ (2,667,036) | $ (24,371,426) | $ (11,846,040) |
Net loss per share - basic | $ (0.33) | $ (0.17) | $ (1.07) | $ (0.80) |
Weighted average common shares outstanding - basic | 24,462,895 | 15,273,707 | 22,765,268 | 14,794,637 |
Net loss per share - diluted | $ (0.33) | $ (0.30) | $ (1.07) | $ (0.83) |
Weighted average common shares outstanding - diluted | 24,462,895 | 17,681,400 | 22,765,268 | 16,372,537 |
Condensed Statements of Opera_2
Condensed Statements of Operations (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Research and Development | ||||
Collaboration funding amount | $ 600,072 | $ 1,648,631 | $ 1,318,482 | $ 4,648,002 |
General and Administrative | ||||
Collaboration funding amount | $ 1,404,695 | $ 3,257,701 | $ 2,547,291 | $ 5,629,876 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Deficit - USD ($) | Total | First SWK Warrant | Third SWK Warrant | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital First SWK Warrant | Additional Paid-in Capital Third SWK Warrant | Accumulated Deficit |
Beginning balance at Dec. 31, 2021 | $ (1,723,605) | $ 1,431 | $ 112,784,918 | $ (114,509,954) | ||||
Beginning balance, shares at Dec. 31, 2021 | 14,310,244 | |||||||
Stock-based compensation | 474,097 | 474,097 | ||||||
Proceeds allocated to Warrant | $ 327,031 | $ 327,031 | ||||||
Net loss | (9,179,004) | (9,179,004) | ||||||
Ending balance at Mar. 31, 2022 | (10,101,481) | $ 1,431 | 113,586,046 | (123,688,958) | ||||
Ending balance, shares at Mar. 31, 2022 | 14,310,244 | |||||||
Beginning balance at Dec. 31, 2021 | (1,723,605) | $ 1,431 | 112,784,918 | (114,509,954) | ||||
Beginning balance, shares at Dec. 31, 2021 | 14,310,244 | |||||||
Net loss | (11,846,040) | |||||||
Ending balance at Jun. 30, 2022 | (8,783,542) | $ 1,567 | 117,570,885 | (126,355,994) | ||||
Ending balance, shares at Jun. 30, 2022 | 15,672,791 | |||||||
Beginning balance at Dec. 31, 2021 | (1,723,605) | $ 1,431 | 112,784,918 | (114,509,954) | ||||
Beginning balance, shares at Dec. 31, 2021 | 14,310,244 | |||||||
Ending balance at Dec. 31, 2022 | $ (16,761,272) | $ 1,962 | 123,984,035 | (140,747,269) | ||||
Ending balance, shares at Dec. 31, 2022 | 19,624,280 | 19,624,280 | ||||||
Beginning balance at Mar. 31, 2022 | $ (10,101,481) | $ 1,431 | 113,586,046 | (123,688,958) | ||||
Beginning balance, shares at Mar. 31, 2022 | 14,310,244 | |||||||
Stock-based compensation | 460,777 | 460,777 | ||||||
Issuance of common stock, net of issuance costs | 3,524,198 | $ 136 | 3,524,062 | |||||
Issuance of common stock, net of issuance costs, shares | 1,362,547 | |||||||
Net loss | (2,667,036) | (2,667,036) | ||||||
Ending balance at Jun. 30, 2022 | (8,783,542) | $ 1,567 | 117,570,885 | (126,355,994) | ||||
Ending balance, shares at Jun. 30, 2022 | 15,672,791 | |||||||
Beginning balance at Dec. 31, 2022 | $ (16,761,272) | $ 1,962 | 123,984,035 | (140,747,269) | ||||
Beginning balance, shares at Dec. 31, 2022 | 19,624,280 | 19,624,280 | ||||||
Stock-based compensation | $ 285,509 | 285,509 | ||||||
Issuance of common stock and warrants, net of issuance costs | 6,170,370 | $ 380 | 6,169,990 | |||||
Issuance of common stock and warrants, net of issuance costs, shares | 3,797,254 | |||||||
Proceeds allocated to Warrant | $ 472,500 | $ 472,500 | ||||||
Net loss | (16,280,706) | (16,280,706) | ||||||
Ending balance at Mar. 31, 2023 | (26,113,599) | $ 2,342 | 130,912,034 | (157,027,975) | ||||
Ending balance, shares at Mar. 31, 2023 | 23,421,534 | |||||||
Beginning balance at Dec. 31, 2022 | $ (16,761,272) | $ 1,962 | 123,984,035 | (140,747,269) | ||||
Beginning balance, shares at Dec. 31, 2022 | 19,624,280 | 19,624,280 | ||||||
Net loss | $ (24,371,426) | |||||||
Ending balance at Jun. 30, 2023 | $ (33,246,218) | $ 2,446 | 131,870,031 | (165,118,695) | ||||
Ending balance, shares at Jun. 30, 2023 | 24,463,726 | 24,463,726 | ||||||
Beginning balance at Mar. 31, 2023 | $ (26,113,599) | $ 2,342 | 130,912,034 | (157,027,975) | ||||
Beginning balance, shares at Mar. 31, 2023 | 23,421,534 | |||||||
Stock-based compensation | 259,903 | 259,903 | ||||||
Issuance of common stock, net of issuance costs | 347,613 | $ 46 | 347,567 | |||||
Issuance of common stock, net of issuance costs, shares | 456,886 | |||||||
Issuance of Fourth SWK Warrant | 350,000 | 350,000 | ||||||
Exercise of Pre-Funded Warrants | 585 | $ 58 | 527 | |||||
Exercise of Pre-Funded Warrants, shares | 585,306 | |||||||
Net loss | (8,090,720) | (8,090,720) | ||||||
Ending balance at Jun. 30, 2023 | $ (33,246,218) | $ 2,446 | $ 131,870,031 | $ (165,118,695) | ||||
Ending balance, shares at Jun. 30, 2023 | 24,463,726 | 24,463,726 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (24,371,426) | $ (11,846,040) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 545,412 | 934,874 |
Depreciation | 25,476 | 38,796 |
Non-cash changes in fair value of debt, loss (gain) | 5,018,223 | (3,767,060) |
Loss on extinguishment of debt | 8,541,494 | |
Debt issuance costs recognized as expense | 169,225 | 1,368,194 |
Amortization of debt issuance costs | 408,000 | |
Loss on disposal of property and equipment, net | 137,895 | 4,669 |
Changes in operating assets and liabilities | ||
Collaboration receivable | 5,000,000 | |
Inventory | (4,600,618) | |
Prepaid expenses | 175,953 | 427,911 |
Other current and non-current assets | 13,175 | 9,215,320 |
Accounts payable | 1,900,375 | 2,086,257 |
Accrued expenses | 1,380,510 | 3,139,771 |
Deferred collaboration funding | (3,865,773) | (10,277,878) |
Other current liabilities | (9,190,901) | |
Net cash used in operating activities | (14,522,079) | (12,866,087) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (3,066) | (30,935) |
Net cash used in investing activities | (3,066) | (30,935) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock and warrants, net of issuance costs | 6,517,983 | 3,524,198 |
Proceeds from Original Term Loan, net of warrant allocation and lender fees | 6,013,148 | |
Proceeds from Marathon Convertible Notes, net of lender fees | 5,516,556 | |
Proceeds from SWK Second Term Loan, net of warrant allocation and lender fees | 6,527,500 | |
Proceeds from exercise of Pre-Funded Warrants | 585 | |
Proceeds from issuance of Schelling Promissory Note | 1,000,000 | |
Payment of debt principal | (600,000) | |
Payment of issuance costs for debt and convertible debt | (169,225) | (724,929) |
Net cash provided by financing activities | 13,749,343 | 14,656,004 |
Net increase in cash and cash equivalents | (775,802) | 1,758,982 |
Cash and cash equivalents, beginning of period | 2,329,218 | 12,710,762 |
Cash and cash equivalents, end of period | 1,553,416 | 14,469,744 |
Supplemental cash flow information: | ||
Cash paid for interest | 999,095 | 136,500 |
First SWK Warrant | ||
Cash flows from financing activities: | ||
Proceeds allocated to Warrant based on valuation | $ 327,031 | |
Third SWK Warrant | ||
Cash flows from financing activities: | ||
Proceeds allocated to Warrant based on valuation | $ 472,500 |
Insider Trading Arrangements
Insider Trading Arrangements | 6 Months Ended |
Jun. 30, 2023 | |
Trading Arr By Ind [Table] | |
Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Business Acer Therapeutics Inc., a Delaware corporation (the “Company”), is a pharmaceutical company focused on the acquisition, development, and commercialization of therapies for serious rare and life-threatening diseases with significant unmet medical needs. The Company identifies and develops treatments where science can be applied in new ways for use in diseases with high unmet need. In the U.S., OLPRUVA (sodium phenylbutyrate) for oral suspension is approved for the treatment of urea cycle disorders (“UCDs”) involving deficiencies of carbamylphosphate synthetase (“CPS”), ornithine transcarbamylase (“OTC”), or argininosuccinic acid synthetase (“AS”). The Company also has a pipeline of investigational product candidates, including EDSIVO (celiprolol) for the treatment of vascular Ehlers-Danlos syndrome (“vEDS”) in patients with a confirmed type III collagen (COL3A1) mutation, and ACER-801 (osanetant) for the treatment of vasomotor symptoms (“VMS”), post-traumatic stress disorder (“PTSD”), and prostate cancer, although the ACER-801 program is currently on pause while the Company conducts a thorough review of the full data set of results from its Phase 2a proof of concept clinical trial (where topline results showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women). The Company also intends to explore additional lifecycle opportunities for OLPRUVA (sodium phenylbutyrate) in various disorders where proof of concept data exists, subject to additional capital. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, precommercial and commercial activities, recruiting management and technical staff, acquiring operating assets, and raising capital. The Company has received revenue and collaboration funding related to the collaboration and license agreement (the “Collaboration Agreement”) with Relief Therapeutics Holding AG (“Relief”) as described below but has not generated any product revenue from sales to date and may never generate any product revenue from sales in the future. Liquidity The Company had an accumulated deficit of $ 165.1 million and cash and cash equivalents of $ 1.6 million as of June 30, 2023. Net cash used in operating activities was $ 14.5 million and $ 12.9 million for the six months ended June 30, 2023 and 2022, respectively. On November 9, 2018, the Company entered into a sales agreement with Roth Capital Partners, LLC, and on March 18, 2020, an amended and restated sales agreement was entered into with JonesTrading Institutional Services LLC and Roth Capital Partners, LLC. The agreement provides a facility for the offer and sale of shares of common stock from time to time having an aggregate offering price of up to $ 50.0 million depending upon market demand, in transactions deemed to be an at-the-market (“ATM”) offering. The Company has no obligation to sell any shares of common stock pursuant to the agreement and may at any time suspend sales pursuant to the agreement. Each party may terminate the agreement at any time without liability. During the six months ended June 30, 2023, the Company sold 1,919,140 shares of common stock through its ATM facility at a gross sale price of $ 2.3290 per share, for proceeds of $ 4.5 million . Proceeds, net of $ 0.2 million of fees and offering costs, were $ 4.3 million . As of June 30, 2023, $ 29.0 million remained available under the Company’s ATM facility, subject to various limitations. In connection with the March 2023 Offering (defined below), the Company suspended the ATM facility and entered into a related restriction (see Note 9), prohibiting the Company from entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of common stock or securities convertible or exercisable into common stock, subject to certain exceptions, until April 24, 2023. The Company resumed its ATM activity after April 24, 2023 and, during the balance of the second quarter of 2023, the Company sold 456,886 shares of common stock through its ATM facility at a gross sale price of $ 0.7912 per share, for proceeds of $ 0.4 million. Proceeds, net of $ 14 thousand of fees and offering costs, were $ 0.3 million. On April 30, 2020, the Company entered into an equity line purchase agreement and registration rights agreement pursuant to which Lincoln Park committed to purchase up to $ 15.0 million of the Company’s common stock. During the year ended December 31, 2022 , the Company sold 772,057 shares of common stock under its purchase agreement with Lincoln Park at a weighted average gross sale price of $ 1.42 per share, resulting in proceeds of $ 1.1 million. The Lincoln Park facility was completed on December 30, 2022 and is now terminated. On January 25, 2021, the Company entered into an option agreement (the “Option Agreement”) with Relief, pursuant to which the Company granted Relief an exclusive option (the “Exclusivity Option”) to pursue a potential collaboration and license arrangement with the Company, and then on March 19, 2021, the Company entered into the Collaboration Agreement with Relief providing for the development and commercialization of OLPRUVA TM for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD. The Company received a $ 10.0 million cash payment from Relief (consisting of a $ 14.0 million “Reimbursement Payment” from Relief to the Company offset by payment of a $ 4.0 million Promissory Note drawn in connection with the Option Agreement, plus interest earned through the date of the Collaboration Agreement) and Relief released its security interest in all of the Company’s assets, pursuant to the Promissory Note. Additionally, under the terms of the Collaboration Agreement, the Company received an additional $ 20.0 million for U.S. development and commercial launch costs for the UCDs and MSUD indications (the “Development Payments”). Further, the Company retained development and commercialization rights in the U.S., Canada, Brazil, Turkey, and Japan (“Acer Territory”). The companies will split net profits from the Acer Territory 60 %:40% in favor of Relief. Relief licensed the rights for the rest of the world (“Relief Territory”), where the Company will receive from Relief a 15 % royalty on all net sales received in the Relief Territory. The Company could also receive a total of $ 6.0 million in milestone payments based on the first European marketing approvals of OLPRUVA TM for a UCD and MSUD. The terms of the Collaboration Agreement and Option Agreement are further described below in the Revenue Recognition and Accounting for Collaboration Agreements section of Note 2, Significant Accounting Policies. On March 4, 2022, the Company entered into a Credit Agreement (the “SWK Credit Agreement”) with the lenders party thereto and SWK Funding LLC (“SWK”), as the agent, sole lead arranger and sole bookrunner, which provided for a senior secured term loan facility in an aggregate amount of $ 6.5 million in a single borrowing (the “Original Term Loan”). The Original Term Loan funding closed on March 14, 2022. The proceeds of the Original Term Loan were used to pay fees, costs and expenses related to the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement (as defined and described below) and the Marathon Credit Agreement (as defined and described below) and for other working capital and general corporate purposes. On August 19, 2022, the Company entered into an amendment (the “First Amendment”) to the SWK Credit Agreement, which among other provisions revised the Company’s required minimum amount of unencumbered liquid assets under the Original Term Loan. On January 30, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the SWK Credit Agreement. In addition to other provisions, the Second Amendment provided for an additional senior secured term loan to be made to the Company in an aggregate amount of $ 7.0 million in a single borrowing which funded on January 31, 2023 (the “Second Term Loan”, and together with the Original Term Loan, the “SWK Loans”). On May 12, 2023, the Company entered into a Third Amendment (the “Third Amendment”) to the SWK Credit Agreement. In addition to other provisions, the Third Amendment provides for (i) a temporary reduction in the minimum amount of unencumbered liquid assets required to be maintained by the Company (from $ 3.0 million to $ 1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $ 1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $ 0.5 .million, (ii) the ability for the Company to forego a $ 0.6 million amortization payment otherwise due on May 15, 2023, and at the discretion of SWK (which was exercised) a second $ 0.6 million amortization payment otherwise due on June 15, 2023, and (iii) the ability for the Company to defer until July 15, 2023 half of the $ 0.5 million quarterly interest payment otherwise due on May 15, 2023). The SWK Loans made under the SWK Credit Agreement as amended through the Third Amendment (the “Current SWK Credit Agreement”) bear interest at an annual rate of the sum of (i) 3-month SOFR, subject to a 1 % floor, plus (ii) a margin of 11 %, with such interest payable quarterly in arrears. In the event of default, the interest rate will increase by 3 % per annum over the contract rate effective at the time of default but shall not be higher than the maximum rate permitted to be charged by applicable laws. Due to topline results announced in March 2023 from the Company’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause, which showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women, the principal amount of the SWK Loans amortizes at a monthly rate of $ 0.6 million (as opposed to $ 1.3 million quarterly prior to the announcement of such topline results), although the Third Amendment allowed the Company to forgo the amortization payment otherwise due on May 15, 2023 , and at the discretion of SWK (which was exercised) a second amortization payment otherwise due on June 15, 2023. The final maturity date of the SWK Loans is March 4, 2024 . The Company has the option to prepay the SWK Loans in whole or in part. Upon the repayment of the Original Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid to SWK under the Current SWK Credit Agreement on or prior to the prepayment date) equal to 1.5 times the outstanding principal amount of the Original Term Loan, plus any and all payment-in-kind interest amounts. Upon the repayment of the Second Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid in cash to SWK under the Current SWK Credit Agreement with respect to the Second Term Loan) equal to the outstanding principal amount of the Second Term Loan (inclusive of payment-in-kind interest amounts) multiplied by: (i) if the repayment occurs prior to May 16, 2023, 1.28667 , (ii) if the repayment occurs on or after May 16, 2023 but prior to June 16, 2023, 1.39334 , and (iii) if the repayment occurs on or after July 16, 2023, 1.5 . Due to topline results announced in March 2023 from the Company’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment fo r moderate to severe VMS associated with menopause, the Company is required to maintain for purposes of the SWK Loans unencumbered liquid assets of not less than the lesser of (x) the outstanding principal amount of the SWK Loans or (y) $ 3.0 million (as opposed to $ 1.5 million for clause (y) prior to the announcement of such topline results), although the Third Amendment provides for a temporary reduction in the minimum amount of unencumbered liquid assets required to be maintained by the Company under clause (y) (from $ 3.0 million to $ 1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $ 1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $ 0.5 million). The SWK Loans are secured by a first priority lien on all assets of the Company and any of its future subsidiaries pursuant to a Guarantee and Collateral Agreement entered into on March 4, 2022, between the Company and SWK, as agent (the “SWK Security Agreement”). The Current SWK Credit Agreement contains customary representations and warranties and affirmative and negative covenants. The Company paid to SWK $ 0.1 million in origination fees on the date on which the Original Term Loan was funded. In connection with the execution of the SWK Credit Agreement, the Company issued a warrant (the “First SWK Warrant”) to purchase 150,000 shares of the Company’s common stock at an exercise price of $ 2.46 per share. In connection with the execution of the First Amendment, the Company issued to SWK an additional warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $ 1.51 per share (such warrant, the "Second SWK Warrant"). In connection with the execution of the Second Amendment, the Company issued to SWK an additional warrant to purchase 250,000 shares of the Company’s common stock at an exercise price of $ 2.39 per share (such warrant, the “Third SWK Warrant” and, together with the First SWK Warrant and Second SWK Warrant, the "SWK Warrants"). SWK may exercise the SWK Warrants in accordance with the terms thereof for all or any part of such shares of common stock from the date on which the Original Term Loan was funded or such SWK Warrant was issued, as applicable, until and including March 4, 2029. On June 16, 2023, SWK sold the SWK Loans to Nantahala Capital Management, LLC (“Nantahala”). In connection with the sale of the SWK Loans there were no changes to any of the contractual provisions of the loans; however, the Company (i) issued to SWK an additional warrant (the "Fourth SWK Warrant") to purchase 500,000 shares of the Company’s common stock at an exercise price of $ 1.00 , which expires on June 16, 2030 , with other terms and conditions being the same as the Third SWK Warrant, and (ii) has benefited from waivers/reductions provided by Nantahala with respect to the minimum amount of unencumbered liquid assets required to be maintained by the Company pursuant to the SWK Loans. The Company determined that due to its deemed participation in the transfer of the SWK Loans by way of issuing the Fourth SWK Warrant, it should account for the transfer as an extinguishment of debt. Since there were no changes to the underlying contractual provisions of each loan as part of such transfer, there was no difference in fair value at the point of transfer of the SWK Loans. However, the Fourth SWK Warrant, valued at $ 0.4 million based on a Black-Scholes calculation, was recorded as a loss on extinguishment. On March 4, 2022, the Company also entered into a Marathon Convertible Note Purchase Agreement with MAM Aardvark, LLC (“Marathon”) and Marathon Healthcare Finance Fund, L.P. (“Marathon Fund” and together with “Marathon” each a “Holder” and collectively the “Holders”) (the “Marathon Convertible Note Purchase Agreement”) pursuant to which the Company issued and sold to the Holders secured convertible notes (the “Marathon Convertible Notes”) in an aggregate amount of up to $ 6.0 million (the “Convertible Note Financing”). The Convertible Note Financing closed on March 14, 2022. The proceeds of the Convertible Note Financing were used to pay fees, costs and expenses related to the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement and the Marathon Credit Agreement and for other working capital and general corporate purposes. On January 30, 2023, the Company entered into an Amendment Agreement (the “Marathon Amendment Agreement”) with Marathon and Marathon Fund with respect to the Marathon Convertible Notes. The Marathon Convertible Notes bear interest at an annual rate of 6.5 %, with such interest payable quarterly ; provided, however, that each of the Holders have agreed to defer payment by the Company of accrued and unpaid interest on their respective Marathon Convertible Note existing on the date of the Marathon Amendment Agreement through March 31, 2023, with such deferred interest, together with any accrued and unpaid interest on each Marathon Convertible Note incurred after March 31, 2023, to be due and payable in cash by the Company on April 15, 2023. Subject to the restrictions set forth in a subordination agreement among each of the Holders and SWK, as agent and lender, the Company is required to repurchase each Marat hon Convertible Note, on or before the fifth (5th) business day (but with five ( 5 ) business days’ notice) following the earlier of June 15, 2023 or the Company’s receipt of gross proceeds of at least $ 40.0 million from the issuance or sale of equity, debt and/or hybrid securities, loans or other financing on a cumulative basis since January 1, 2023 (excluding the Second Term Loan), at a price equal to 200 % (the “Buy-Out Percentage”) of the outstanding principal amount of such Marathon Convertible Note, plus any accrued but unpaid interest thereon to the date of such repurchase, plus 2500 basis points for each 90-day period after April 15, 2023, pro-rated for the actual number of days elapsed in the 90-day period before repurchase actually occurs (for example, if the repurchase occurred on May 30, 2023, the Buy-Out Percentage would have been increased to 212.5 %); provided, that if the Company is prohibited from effectuating such repurchases pursuant to a subordination agreement with SWK, the Company shall cause the repurchase to occur on or before the fifth (5th) business day following the earlier of such prohibition being no longer applicable or the payment in full of all senior indebtedness described in such subordination agreement, but with five ( 5 ) business days’ notice. Each of the Holders also has the right to convert all or any portion of the outstanding principal amount plus any accrued but unpaid interest under the Marathon Convertible Note held by such Holder into shares of common stock at a conversion price of $ 2.50 per share, subject to adjustment. Each Holder has certain rights with respect to the registration by the Company for resale of the shares of common stock issuable upon conversion of the Marathon Convertible Note held by such Holder which are forth in the Marathon Convertible Note Purchase Agreement. Any outstanding principal, together with all accrued and unpaid interest, will be payable on the earlier of the third anniversary of the date of issuance, or upon a change of control of the Company. Pursuant to the Marathon Convertible Note Purchase Agreement, the Marathon Convertible Notes are secured by a lien on collateral representing substantially all assets of the Company, although such security interest is subordinated to the Company’s obligations under the Current SWK Credit Agreement. On March 4, 2022, the Company also entered into a Credit Agreement (the “Marathon Credit Agreement”) with the lenders party thereto and Marathon, as the agent, sole lead arranger and sole bookrunner, which provided for a senior secured term loan facility in an aggregate amount of up to $ 42.5 million in a single borrowing (the “Term Loan”). The Term Loan was available to be borrowed only following full FDA approval for marketing of OLPRUVA TM and until December 31, 2022. The Company received approval for its NDA for OLPRUVA TM on December 22, 2022, and the Company and Marathon agreed to an Extension Agreement with respect to the Term Loan on December 30, 2022, which extended the commitment date for funding the Term Loan to January 16, 2023. The Company elected to terminate the Marathon Credit Agreement by entering into a Termination Agreement on January 30, 2023 , which terminated the Credit Agreement and the associated Royalty Agreement. See Note 6, Debt for further discussion of the status of the Marathon Convertible Notes, and the Marathon Credit Agreement. On March 21, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional accredited investor (the “Purchaser”) pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering, an aggregate of 2,335,000 shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share (“Common Stock”), and pre-funded warrants to purchase up to 585,306 shares of Common Stock (the “Pre-Funded Warrants”) at an exercise price of $ 0.001 per share, and (ii) in a concurrent private placement, warrants to purchase up to 2,920,306 shares of Common Stock (the “Common Warrants”) at an exercise price of $ 0.791 per share. Such registered direct offering and concurrent private placement are referred to herein as the “March 2023 Offering.” The combined purchase price for one Share and one Common Warrant was $ 0.916 , and the combined purchase price for one Pre-Funded Warrant and one Common Warrant was $ 0.915 . The March 2023 Offering was priced at-the-market under Nasdaq rules. The Company received aggregate gross proceeds from the Offering of approximately $ 2.7 million before deducting the placement agent fee and related offering expenses, resulting in net proceeds of approximately $ 2.3 million. The March 2023 Offering closed on March 24, 2023. See Note 9, Stockholders' Deficit for further discussion of the March 2023 Offering. The Nasdaq Capital Market’s continued listing standards for the Company’s common stock require, among other things, that the Company maintain either (i) stockholders’ equity of $ 2.5 million, (ii) market value of listed securities ("MVLS") of $ 35 million or (iii) net income from continuing operations of $ 500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years. On May 3, 2023, the Company received a letter from the listing qualifications department staff of Nasdaq indicating that for the last 30 consecutive business days, the Company’s minimum MVLS was below the minimum of $ 35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(b)(2). In accordance with Nasdaq listing rules, the Company has 180 calendar days, or until October 30, 2023, to regain compliance with respect to the Company’s minimum MVLS. In addition, pursuant to Nasdaq Listing Rules, the Company is required to maintain a minimum bid price of $ 1.00 per share for continued listing on Nasdaq. On June 5, 2023, the Company received another letter from the listing qualifications department staff of Nasdaq indicating that the Company is not in compliance with the $ 1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(a)(2). In accordance with Nasdaq listing rules, the Company has 180 calendar days, or until December 4, 2023, to regain compliance with respect to the minimum bid price requirement (i.e., the closing bid price of the Company’s common stock must meet or exceed $ 1.00 per share for a minimum of ten consecutive business days during the compliance period ending December 4, 2023). If the Company fails to regain compliance with the minimum bid price requirement by December 4, 2023, the Company could be eligible for an additional 180-day compliance period to demonstrate compliance with the minimum bid price requirement. In order to qualify for such additional period, however, the Company will be required to meet the continued listing requirement for minimum MVLS and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. There can be no assurance that the Company will be able to maintain compliance with Nasdaq listing standards. The Company’s failure to meet or to continue to meet these requirements could result in the Company’s common stock being delisted from the Nasdaq Capital Market. If the Company’s common stock were delisted from the Nasdaq Capital Market, among other things, this could result in a number of negative implications, including reduced market price and liquidity of the Company’s common stock as a result of the loss of market efficiencies associated with the Nasdaq, the loss of federal preemption of state securities laws, as well as the potential loss of confidence by suppliers, partners, employees and institutional investor interest, fewer business development opportunities, greater difficulty in obtaining financing and breaches of or events of default under certain contractual obligations (including an event of default under the loan agreement for the Marathon Convertible Notes). Management expects to continue to finance operations through the issuance of additional equity or debt securities, non-dilutive funding, and/or through strategic collaborations. Any transactions which occur may contain covenants that restrict the ability of management to operate the business and any securities issued may have rights, preferences, or privileges senior to the Company’s common stock and may dilute the ownership of current stockholders of the Company. The Company believes that its existing cash and cash equivalents at June 30, 2023 will be sufficient to fund its anticipated operating and capital re quirements through the middle of the third quarter of 2023. Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”), which contemplate continuation of the Company as a going concern. The Company has incurred recurring losses from operations, negative cash flows from operations, has a net working capital deficiency, has a net capital deficiency, and has minimum unencumbered liquid assets requirements under its Current SWK Credit Agreement. While the Company has received approval for its OLPRUVA TM product, the Company has yet to receive commercial product revenues and, as such, has been dependent on funding operations through the sale of equity securities, through a collaboration agreement, and through debt instruments. Since inception, the Company has experienced significant losses and incurred negative cash flows from operations. The Company has spent, and expects to continue to spend, a substantial amount of funds in connection with implementing its business strategy, including its planned product development efforts and potential precommercial and commercial activities. As of June 30, 2023, the Company had cash and cash equivalents of $ 1.6 million and current liabilities of $ 43.4 million , which include $ 0.2 million associated with deferred collaboration funding (see Revenue Recognition and Accounting for Collaboration Agreements below in Note 2, Significant Accounting Policies). The Company believes that its existing cash and cash equivalents at June 30, 2023 will be sufficient to fund its anticipated operating and capital requirements through the middle of the third quarter of 2023. The Company will need to raise additional capital to fund continued operations beyond the middle of the third quarter of 2023. The Company may not be successful in its efforts to raise additional funds or achieve profitable operations. The Company continues to explore potential opportunities and alternatives to obtain the additional resources that will be necessary to support its ongoing operations beyond the middle of the third quarter of 2023, including raising additional capital through either private or public equity or debt financing, or additional program collaborations or non-dilutive funding, as well as using its ATM facility which had $ 29.0 million available as of June 30, 2023. Due to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $ 75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period, the Company is only able to issue a limited number of shares under its ATM facility. From May 19, 2020 through June 30, 2023, the Company has raised gross proceeds of $ 21.0 million from the ATM facility and gross proceeds of $ 4.0 million from the agreement with Lincoln Park, which equity line facility was completed on December 30, 2022 and is now terminated. If the Company is unable to obtain additional funding to support its current or proposed activities and operations, it may not be able to continue its operations as currently anticipated, which may require it to suspend or terminate any ongoing development activities, modify its business plan, curtail various aspects of its operations, cease operations, or seek relief under applicable bankruptcy laws. In such event, the Company’s stockholders may lose a substantial portion or even all of their investment. These factors individually and collectively raise substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the date these financial statements are available, or August 14, 2024. The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. Basis of Presentation The accompanying condensed financial statements are unaudited and have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. The unaudited condensed financial statements have been prepared on the same basis as the audited annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position, results of operations, stockholders’ deficit and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period. The condensed balance sheet as of December 31, 2022, included herein, was derived from the audited financial statements as of that date but does not include all disclosures required by GAAP. These unaudited financial statements should be read in conjunction with the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are described in Note 2, “Significant Accounting Policies,” in its Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates The Company’s accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. From time to time, estimates having relatively higher significance include determination of stand-alone selling price and variable consideration estimates for purposes of measuring collaboration funding, revenue recognition, deferred collaboration funding, stock-based compensation, inputs to fair value for debt, contract manufacturing and clinical trial accruals, and income taxes. Actual results could differ from those estimates and changes in estimates may occur. Revenue Recognition and Accounting for Collaboration Agreements The Company’s revenue and collaboration funding are generated from a single collaboration agreement which included the sale of a license of intellectual property. The Company analyzes its collaboration agreements to assess whether they are within the scope of ASC Topic 808, Collaborative Arrangements , (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement between the Company and the collaboration partner are within the scope of other accounting literature. If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, the Company accounts for those aspects of the arrangement within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). If the Company concludes that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, the Company recognizes the Company’s share of the allocation of the shared costs incurred with respect to the jointly conducted activities as a component of the related expense in the period incurred. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. If the Company concludes a counter-party to a transaction is not a customer or otherwise not within the scope of ASC 606 or ASC 808, the Company considers the guidance in other accounting literature as applicable or by analogy to account for such transaction. The Company determines the units of account within the collaborative arrangement utilizing the guidance in ASC 606 to determine which promised goods or services are distinct. In order for a promised good or service to be considered “distinct” under ASC 606, the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). For any units of account that fall within the scope of ASC 606, where the other party is a customer, the Company evaluates the separate performance obligation(s) under each contract, determines the transaction price, allocates the transaction price to each performance obligation considering the estimated stand-alone selling prices of the services and recognizes revenue upon the satisfaction of such obligations at a point in time or over time dependent on the satisfaction of one of the following criteria: (1) the customer simultaneously receives and consumes the economic benefits provided by the vendor’s performance; (2) the vendor creates or enhances an asset controlled by the customer; and (3) the vendor’s performance does not create an asset for which the vendor has an alternative use and the vendor has an enforceable right to payment for performance completed to date. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property is recognized only when (or as) the later of the following events occurs: (i) the subsequent sale or usage occurs; or (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). On January 25, 2021, the Company entered into the Option Agreement with Relief pursuant to which the Company granted Relief the Exclusivity Option to pursue a potential collaboration and license arrangement with the Company, and then on March 19, 2021, the Company entered into the Collaboration Agreement with Relief providing for the development and commercialization of OLPRUVA TM for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD. The Company received a $ 10.0 million cash payment from Relief (consisting of a $ 14.0 million “Reimbursement Payment” from Relief to the Company, offset by repayment of a $ 4.0 million Promissory Note drawn in connection with the Option Agreement, plus interest earned through the date of the Collaboration Agreement), and Relief released its security interest in all of the Company’s assets pursuant to the Promissory Note. Under the terms of the Collaboration Agreement, Relief committed to pay the Company up to an additional $ 20.0 million for U.S. development and commercial launch costs for the UCDs and MSUD indications. During the year ended December 31, 2021, the Company received from Relief the $ 10.0 million First Development Payment and the additional $ 10.0 million Second Development Payment conditioned upon the FDA’s acceptance of an NDA for OLPRUVA TM in a UCD for filing and review, which acceptance was received on October 4, 2021. On October 6, 2021, the Company entered into a Waiver and Agreement with Relief to amend the timing for the Second Development Payment. The Company received the Second Development Payment in two $ 5.0 million tranches on each of October 12, 2021 and January 14, 2022. Further, the Company retained development and commercialization rights in the U.S., Canada, Brazil, Turkey and Japan (“Acer Territory”). The companies will split net profits from the Acer Territory 60 %:40% in favor of Relief. Relief licensed the rights for the rest of the world (“Relief Territory”), where the Company will receive from Relief a 15 % royalty on all net sales received in the Relief Territory. The Company could also receive a total of $ 6.0 million in milestone payments based on the first European (EU) marketing approvals for a UCD and MSUD. The Company assessed these agreements in accordance with the authoritative literature and concluded that they meet the definition of a collaborative arrangement per ASC 808. For certain parts of the Collaboration Agreement, the Company concluded that Relief represented a customer while, for other parts of the Collaboration Agreement, Relief did not represent a customer. The units of account of the Collaboration Agreement where Relief does not represent a customer are outside of the scope of ASC 606. The Company also determined that the development and commercialization services and Relief’s right to 60 % profit in the Acer Territory is within the scope of ASC Topic 730, Research and Development (“ASC 730”), with regard to funded research and development arrangements. The Company concluded the promised goods and services contained in the Collaboration Agreement, represented two distinct units of account consisting of a license in the Relief Territory, and a combined promise for the development and commercialization of OLPRUVA TM in the Acer Territory and the payment of 60 % net profit from that territory (together, the “Services”). The stand-alone selling price was estimated for each distinct unit of account utilizing an estimate of discounted cashflows associated with each. The Company determined that the transaction price at the outset of the Collaboration Agreement was $ 25.0 million, including the Option Fee of $ 1.0 million, the Reimbursement Payment of $ 14.0 million, and the First Development Payment of $ 10.0 million. The Company concluded that consistent with the evaluation of variable consideration, using the most likely amount approach, the Second Development Payment as well as the milestone payments for EU marketing approvals, should be fully constrained until the contingency associated with each payment has been resolved and the Company’s NDA is accepted for review by the FDA, and Relief receives EU marketing approval, respectively. The contingency associated with the Second Development Payment was resolved in the fourth quarter of 2021. Since ASC 808 does not provide recognition and measurement guidance for collaborative arrangements, the Company applied the principles of ASC 606 for those units of account where Relief is a customer and ASC 730-20 for the funded research and development activities. The license revenue was recognized at the point where the Company determined control was transferred to the customer. The combined unit of account for the Services associated with the allocation of the initial transaction price will be recognized over the service period through the anticipated date of first commercial sale of the OLPRUVA TM approved product in the U.S. The Company also determined that the Services associated with the allocation of the initial transaction price would be satisfied over time as measured using actual costs as incurred by the Company toward the identified development and commercialization services agreed to between the parties up to the point of first commercial sale of the OLPRUVA TM product. Research and development expenses and general and administrative expenses, as they relate to activities governed by the Collaboration Agreement, incurred in satisfying the Services unit-of-account will be recognized as contra-expense within their respective categories, consistent with the presentation guidance in ASC Topic 730. Any amounts recorded as deferred collaboration funding liability which are not recognized as contra-expense at the date of first commercial sale will be classified as contra-royalty and recognized against amounts of net-profit royalty payments recognized by the Company over the term of the agreement between the parties, estimated to be approximately thirteen years beginning in 2023. The Company recognizes a receivable under the Collaboration Agreement when the consideration to be received is deemed unconditional, or when only the passage of time is required before payment of that consideration is due. Amounts receivable under the Collaboration Agreement plus payments received from Relief, net of the amounts recorded as license revenue and as offsets to research and development expenses and to general and administrative expenses, are reported as deferred collaboration funding. At June 30, 2023, the amount of deferred collaboration funding associated with unsatisfied promises under the Collaboration Agreement amounted to $ 4.5 million . The Company has recorded $ 0.2 million as a current liability. $ 4.3 million is recorded as a non-current liability and represents the estimated amount that would be taken against future net profit payments made to Relief should they occur. The Company has recognized deferred collaboration funding as it incurred expenses associated with performing the Services up to the date of first commercial sale in the Acer Territory. The offset to future net profit royalties will be recognized straight line beginning in the first quarter in which the Company is able to generate net profit on the OLPRUVA TM product and through the end of the effective date of the Collaboration Agreement. At June 30, 2023 , deferred collaboration funding was composed of $ 35.0 million received from Relief, offset by $ 1.3 million recognized as license revenue during the year ended December 31, 2021 and $ 15.2 million recorded as an offset to research and development expenses and $ 14.0 million recorded as an offset to general and administrative expenses subsequent to signing the Collaboration Agreement and through the date of this report. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 . At June 30, 2023 and December 31, 2022, the Company had $ 1.3 million and $ 2.1 million , respectively, in excess of the FDIC insured limit. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. Financial instruments consist of cash equivalents, collaboration receivable, accounts payable, accrued expenses, and debt instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature, except for cash equivalents and debt instruments, which were marked to market at the end of each reporting period. See Note 7 for additional information on the fair value of the debt liabilities. The Company elected the fair value option for both its Original Term Loan and its Marathon Convertible Notes dated March 14, 2022. The Company also elected the fair value option for the Second Term Loan (see Note 7). The Company was not required to change its fair value option in connection with the sale of the SWK Loans by SWK to Nantahala. The Company adjusts both the Original Term Loan and the Marathon Convertible Notes to fair value through the change in fair value of debt in the accompanying statements of operations. Subsequent unrealized gains and losses on items for which the fair value option is elected are reported in the accompanying statements of operations. Clinical Trial and Preclinical Study Expenses No material changes in estimates of clinical trial or preclinical study expenses were recognized in either of the three or six months ended June 30, 2023 or 2022 . Accounts payable and accrued expenses include costs associated with preclinical or clinical studies of $ 1.1 million and $ 0.9 million at June 30, 2023 and December 31, 2022 , respectively. Stock-Based Compensation The Company records stock-based payments at fair value. The measurement date for compensation expense related to awards is generally the date of the grant. The fair value of awards is recognized as an expense in the statement of operations over the requisite service period, which is generally the vesting period. The Company utilizes the simplified method to estimate the expected term of options until such time that it has adequate option granting and exercise history to refine this estimate. The fair value of options is calculated using the Black-Scholes option pricing model. This option valuation model requires the use of assumptions including, among others, the volatility of stock price, the expected term of the option, and the risk-free interest rate. A limited number of option grants are periodically made to non-employee contractors. The following assumptions were used to estimate the fair value of stock options granted during the six months ended June 30, 2023 and 2022 using the Black-Scholes option pricing model: 2023 2022 Risk-free interest rate 4.00 % 1.18 %- 1.83 % Expected life (years) 5.50 - 6.25 6.25 Expected volatility 113.0 % 113.0 %- 115.0 % Dividend rate 0 % 0 % Due to its limited operating history and a limited trading history of its common stock in relation to the life of its standard option grants, the Company estimates the volatility of its stock in consideration of a number of factors including the Company’s available stock price history and the stock price volatility of comparable public companies. The expected term of a stock option granted to employees and directors (including non-employee directors) is based on the average of the contractual term (generally ten years ) and the vesting period. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The Company recognizes forfeitures related to employee stock-based awards as they occur. The risk-free rate for periods within the expected life of the option is based upon the U.S. Treasury yield curve in effect at the time of grant. Option awards are granted at an exercise price equal to the closing market price of the Company’s common stock on the Nasdaq Capital Market on the date of grant. Inventory The Company values its inventories at the lower-of-cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company classifies its inventory costs as long term, in other assets in its balance sheets, when it expects to utilize the inventory beyond their normal operating cycle. Prior to the regulatory approval of a product candidate, the Company incurs expenses for the manufacture of material that could potentially be available to support the commercial launch of its products upon approval. Until the first reporting period when regulatory approval has been received or is otherwise considered probable and the future economic benefit is expected to be realized, the Company records all such costs as research and development expense. Inventory used in clinical trials is also expensed as research and development expense, when selected for such use. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical manufacturing campaign. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of product sales in the statements of operations and comprehensive loss. The determination of whether inventory costs will be realizable requires the use of estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required. Additionally, the Company’s product is subject to strict quality control and monitoring that it performs throughout the manufacturing process. In the event that certain batches or units of product do not meet quality specifications, the Company will record a charge to cost of product sales, to write-down any unmarketable inventory to its estimated net realizable value. The components of inventory are summarized as follows: June 30, 2023 December 31, 2022 Raw materials $ 2,899,422 $ — Work in process 1,274,082 — Finished goods 427,114 — Total inventory $ 4,600,618 $ — Goodwill Goodwill represents the excess of the purchase price (consideration paid plus net liabilities assumed) of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company’s goodwill is allocated to the Company’s single reporting unit. The Company evaluates the recoverability of goodwill according to ASC Topic 350, Intangibles – Goodwill and Other annually, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill might be impaired. The Company may opt to perform a qualitative assessment or a quantitative impairment test to determine whether goodwill is impaired. If the Company were to determine based on a qualitative assessment that it was more likely than not that the fair value of the reporting unit was less than its carrying value, a quantitative impairment test would then be performed. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than its carrying amount, a goodwill impairment would be recognized for the difference. The Company performed a qualitative analysis of goodwill as of June 21, 2022 as it considered the Complete Response Letter received from the FDA in June 2022 with respect to the Company’s NDA in respect of OLPRUVA TM (sodium phenylbutyrate) for oral suspension for the treatment of patients with UCDs to be a triggering event requiring it to perform that analysis. Management concluded that it was more likely than not that the fair value of the reporting unit was greater than its carrying amount. As of June 30, 2023 and December 31, 2022, the Company's liabilities were in excess of its assets, including goodwill. ASU 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. Accordingly, the Company was not required to perform an evaluation. Foreign Currency Transaction Gain/(Loss) Gains and losses arising from transactions and revaluation of balances denominated in currencies other than U.S. dollars are recorded in foreign currency transaction gain/(loss) on the statements of operations. Income Taxes The Company recorded no income tax expense or benefit during the three or six months ended June 30, 2023 and 2022, due to a full valuation allowance recognized against its net deferred tax assets. The Company is primarily subject to U.S. federal and Massachusetts state income taxes. The Company’s tax returns for years 2015 through present are open to tax examinations by U.S. federal and state tax authorities; however, carryforward attributes that were generated prior to January 1, 2015 remain subject to adjustment upon examination if they either have been utilized or will be utilized in a future period. For federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the Company provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are realizable. Utilization of net operating losses may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986, and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization. The tax positions taken or expected to be taken in the course of preparing the Company’s tax returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There were no uncertain tax positions that require accrual or disclosure in the financial statements as of June 30, 2023 and December 31, 2022. The Company’s policy is to recognize interest and penalties related to income tax, if any, in income tax expense. As of June 30, 2023 and December 31, 2022 , the Company had no accruals for interest or penalties related to income tax matters. Basic and Diluted Net Loss per Common Share Basic and diluted net loss per common share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the sum of the weighted average number of common shares outstanding during the period and, in those instances where it would be dilutive, the weighted average number of potential shares of common stock including the assumed exercise of stock options and warrants, the impact of unvested restricted stock, and the potential shares assuming conversion of convertible debt. Basic and diluted shares outstanding are the same for each period presented when all common stock equivalents, including potential shares from convertible debt and warrants, would be antidilutive due to the net losses incurred, except in certain instances as noted below. In certain circumstances the Company includes in both the calculation of basic and diluted net loss per share, the weighted average number of shares associated with a pre-funded warrant because the exercise of such a warrant is virtually assured since the exercise price is nonsubstantive. The two-class method is an earnings allocation formula that treats a participating security, such as a warrant, as having rights to earnings that otherwise would have been available to common stockholders. However, the two-class method does not impact the net loss per share of common stock as the Company has been in a net loss position and while our warrants are considered a participating security, the terms of the warrant agreement does not obligate them to participate in losses. Diluted net income per share is computed using the more dilutive of (a) the two-class method or (b) the if-converted method or treasury stock method, as applicable, to the potentially dilutive instruments. A contract that may be settled in shares and is reported as an asset or liability for accounting purposes may require an adjustment to the numerator for any changes in income or loss that would result if the contract had been reported as an equity instrument for accounting purposes during the period, and doing so is dilutive to the net loss per share calculation (including as a result of the inclusion of underlying shares in the net loss per share calculation). Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13. Financial Instruments-Credit Losses (Topic 326), which requires a financial asset to be presented at amortized cost basis at the net amount expected to be collected and also that credit losses relating to available-for-sale debt securities be recorded through an allowance for credit losses. In November 2019, the FASB issued an amendment making this ASU effective for annual reporting periods beginning after December 15, 2022 for smaller reporting companies. The Company adopted ASU No. 2016-13 in the first quarter of 2023 . There was no material impact on the Company’s financial statements or disclosures as a result of the adoption of this guidance. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2023 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at June 30, 2023 and December 31, 2022: June 30, December 31, 2022 Computer hardware and software $ 143,370 $ 142,870 Leasehold improvements 52,887 52,887 Furniture and fixtures 111,603 111,603 Manufacturing equipment — 135,330 Subtotal property and equipment, gross 307,860 442,690 Less accumulated depreciation ( 253,587 ) ( 228,112 ) Property and equipment, net $ 54,273 $ 214,578 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Payable And Accrued Liabilities Current [Abstract] | |
Accrued Expenses | 4. ACCRUED EXPENSES Accrued expenses consisted of the following at June 30, 2023 and December 31, 2022: June 30, December 31, 2022 Accrued employee bonus and vacation $ 2,545,253 $ 2,624,910 Accrued contract manufacturing 1,202,392 42,679 Accrued miscellaneous expenses 211,824 66,039 Accrued accounting, audit, and tax fees 197,618 82,779 Accrued contract research and regulatory consulting 184,002 68,432 Accrued precommercial and commercial costs 140,565 203,016 Accrued license fees 82,165 80,526 Accrued legal fees 79,984 172,945 Accrued consulting 79,552 3,000 Accrued interest 1,480 313,068 Total accrued expenses $ 4,724,835 $ 3,657,394 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | 5. LEASES The Company leases office space in Newton, Massachusetts and Bend, Oregon. The Newton lease was classified as an operating lease until it expired on December 31, 2022, and the Company is currently renting space on a month-to-month basis for this facility. The Bend lease is classified as an operating lease and contains immaterial provisions for rent holidays and rent escalations over the term of the lease, which have been included in the Company’s right of use asset and lease liabilities. The Company’s lease liability as of June 30, 2023 and December 31, 2022 represents the net present value of future lease payments utilizing discount rates of 8 % to 10 %, which correspond to the Company’s incremental borrowing rates as of the effective dates of the Bend, Oregon lease and a lease modification. As of June 30, 2023 , the weighted average remaining lease term was 2.0 years. The Company recorded a combined expense of $ 45 thousand and $ 0.1 million related to the Bend and Newton leases for the three months ended June 30, 2023 and 2022 , respectively, and recorded a combined expense of $ 0.1 million related to the Bend and Newton leases for each of the six months ended June 30, 2023 and 2022 . The Company made cash payments for amounts included in the measurement of lease liabilities of $ 47 thousand and $ 0.1 million during the three months ended June 30, 2023 and 2022, respectively, and of $ 0.1 million for each of the six months ended June 30, 2023 and 2022. The Company reported a right-of-use asset of $ 0.2 million in Other non-current assets and lease liabilities totaling $ 0.2 million in Other current liabilities and Other non-current liabilities as of June 30, 2023. The following table reconciles the undiscounted lease liabilities to the total lease liabilities recognized on the unaudited condensed balance sheet as of June 30, 2023: As of June 30, 2023 As of December 31, 2022 2023 52,711 103,925 2024 107,290 107,290 2025 54,579 54,579 Total undiscounted lease liabilities 214,580 265,794 Less effects of discounting ( 8,322 ) ( 16,204 ) Total lease liabilities as of June 30, 2023 $ 206,258 $ 249,590 The Company’s lease liabilities are reported on the unaudited condensed balance sheets as follows: June 30, 2023 December 31, 2022 Other current liabilities $ 105,422 $ 103,925 Other non-current liabilities 100,836 145,665 Total lease liabilities $ 206,258 $ 249,590 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 6. DEBT SWK Credit Agreement On March 4, 2022, the Company entered into the SWK Credit Agreement with the lenders party thereto and SWK, as the agent, sole lead arranger and sole bookrunner, which provides for a senior secured term loan facility in an aggregate amount of $ 6.5 million in a single borrowing (the “Original Term Loan”). The Original Term Loan closed on March 14, 2022, after consummation of the Convertible Note Financing (as defined and described below) as well as the satisfaction of other closing conditions as set forth in the SWK Credit Agreement. The proceeds of the Original Term Loan are being used to pay fees, costs and expenses related to the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement (as defined and described below) and the Marathon Credit Agreement (as defined and described below) and for other working capital and general corporate purposes. On August 19, 2022, the Company entered into an amendment (the “First Amendment”) to the SWK Credit Agreement, which extended the date through which the Company has the option to capitalize interest on the SWK Credit Agreement and which revised the Company’s minimum cash requirement under the Original Term Loan. The Original Term Loan bore interest at an annual rate of the sum of (i) 3-month LIBOR (or such other rate as may be agreed by the Company and SWK following the date on which 3-month LIBOR is no longer available), subject to a 1 % floor, plus (ii) a margin of 11 %, with such interest payable quarterly in arrears. In the event of default, the interest rate will increase by 3 % per annum over the contract rate effective at the time of default but shall not be higher than the maximum rate permitted to be charged by applicable laws. For the period ended June 30, 2023 , the current interest rate applicable to the Original Term Loan is 16.3 %. The Company had the option to capitalize such interest commencing on the date on which the Original Term Loan was funded and continuing until February 15, 2023. Commencing on February 15, 2023 , the principal amount of the Original Term Loan will amortize at a rate of $ 0.7 million payable quarterly . The final maturity date of the Original Term Loan is March 4, 2024 . The Company is required to pay $ 2.1 million of principal payments in 2023, with the remainder payable in 2024. The Company has the option to prepay the Original Term Loan in whole or in part. Upon the repayment of the Original Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid to SWK under the SWK Credit Agreement on or prior to the prepayment date) equal to 1.5 times the outstanding principal amount of the Original Term Loan, plus any and all paid-in-kind interest amounts. The Original Term Loan contains a provision for the establishment of an alternative rate of interest if LIBOR we re to no longer be available at any point while the Original Term Loan is outstanding. Under the Original Term Loan as amended, the Company’s minimum cash requirement was such that its unencumbered liquid assets must not have been less than the lesser of (a) the outstanding principal amount of the Original Term Loan, or (b) $ 3.0 million (note: clause (y) was increased from $ 1.5 mil lion due to topline results announced in March 2023 from our Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause which showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women) . SWK, the lender, had agreed per the terms of the amended credit agreement that the minimum cash requirement could be lowered to $ 1.3 million through June 30, 2023. The Original Term Loan is secured by a first priority lien on all assets of the Company and any of its future subsidiaries pursuant to the SWK Security Agreement. The SWK Credit Agreement contains customary representations and warranties and affirmative and negative covenants. The Company paid to SWK $ 0.1 million in origination fees on the date on which the Original Term Loan was funded. The Original Term Loan contains certain provisions which could accelerate the maturity date of the outstanding loan should the Company be out of compliance with any of the stated covenants. At June 30, 2023, the Company did not deem probable any events that would give rise to such an acceleration. In connection with the execution of the SWK Credit Agreement, the Company issued a warrant (the “First SWK Warrant”) to purchase 150,000 shares of the Company’s common stock at an exercise price of $ 2.46 per share. In connection with the execution of the First Amendment, the Company issued to SWK an additional warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $ 1.51 per share (such warrant, the "SWK Amendment Warrant" and, together with the First SWK Warrant, the "SWK Warrants"). SWK may exercise the SWK Warrants in accordance with the terms thereof for all or any part of such shares of common stock from the date on which the Original Term Loan was funded or such SWK Warrant was issued, as applicable, until and including March 4, 2029. The Company recognized the fair value of the First SWK Warrant for $ 0.3 million as additional paid in capital as of the date of the closing of the transaction. Additionally, the Company recognized the fair value of the SWK Amendment Warrant in connection with the First Amendment, for $ 0.1 million as additional paid in capital and as non-operating cost of debt issuance, as of the date of the First Amendment. The Company evaluated its compliance with all covenants with respect to the SWK Credit Agreement as amended and concluded that it was in compliance as of June 30, 2023. Amendments to Borrowing Agreements On January 30, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the SWK Credit Agreement. In addition to other provisions, the Second Amendment provides for an additional senior secured term loan to be made to the Company in an aggregate amount of $ 7.0 million in a single borrowing which was funded on January 31, 2023 (the “Second Term Loan”, and together with the Original Term Loan, the “SWK Loans”). On May 12, 2023, the Company entered into a Third Amendment (the “Third Amendment”) to the SWK Credit Agreement. In addition to other provisions, the Third Amendment provides for (i) a temporary reduction in the minimum amount of unencumbered liquid assets r equired to be maintained by the Company (from $ 3.0 million to $ 1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $ 1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $ 0.5 million, (ii) the ability for the Company to forego a $ 0.6 million amortization payment otherwise due on May 15, 2023, and at the discretion of SWK (which was exercised) a second $ 0.6 million amortization payment otherwise due on June 15, 2023, and (iii) the ability for the Company to defer until July 15 , 2023 half of the $ 0.5 million quarterly interest payment otherwise due on May 15, 2023). The SWK Loans made under the SWK Credit Agreement as amended by and through the Third Amendment (the “Current SWK Credit Agreement”) bear interest at an annual rate of the sum of (i) 3-month SOFR, subject to a 1 % floor, plus (ii) a margin of 11 %, with such interest payable quarterly in arrears. In the event of default, the interest rate will increase by 3 % per annum over the contract rate effective at the time of default but shall not be higher than the maximum rate permitted to be charged by applicable laws. Due to topline results announced in March 2023 from the Company’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause, which showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women, the principal amount of the SWK Loans amortizes at a monthly rate of $ 0.6 million (as opposed to $ 1.3 million quarterly prior to the announcement of such to pline results), although the Third Amendment allowed the Company to forgo the amortization payment otherwise due on May 15, 2023, and at the discretion of SWK (which was exercised) a second amortization payment otherwise due on June 15, 2023. The final maturity date of the SWK Loans is March 4, 2024 . The Company has the option to prepay the SWK Loans in whole or in part. Up on the repayment of the Original Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid to SWK under the Current SWK Credit Agreement on or prior to the prepayment date) equal to 1.5 times the outstanding principal amount of the Original Term Loan, plus any and all payment-in-kind interest amounts. Upon the repayment of the Second Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid in cash to SWK under the Current SWK Credit Agreement with respect to the Second Term Loan equal to the outstanding principal amount of the Second Term Loan (inclusive of payme nt-in-kind interest amounts) multiplied by: (i) if the repayment occurs prior to May 16, 2023, 1.28667 , (ii) if the repayment occurs on or after May 16, 2023 but prior to June 16, 2023, 1.39334 , and (iii) if the repayment occurs on or after July 16, 2023, 1.5 . Due to topline results announced in March 2023 from the Company’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause, the Company is required to maintain for purposes of the SWK Loan unencumbered liquid assets of not less than the lesser of (x) the outstanding principal amount of the SWK Loans or (y) $ 3.0 million (as opposed to $ 1.5 million for clause (y) prior to the announcement of such topline results), although the Third Amendment provides for a temporary reduction in the minimum amount of unencumbered liquid assets required to be maintained by the Company under clause (y) (from $ 3.0 million to $ 1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $ 1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $ 0.5 million). In connection with the execution of the Second Amendment, the Company issued to SWK an additional warrant (the “Third Warrant”) to purchase 250,000 shares of the Company’s common stock at an exercise price of $ 2.39 per share. SWK may exercise the Third Warrant in accordance with the terms thereof for all or any part of such shares of common stock from the date of issuance until and including March 4, 2029. The Company classified the entire fair value of the SWK Original Term Loan, and Second Term Loan which are both due within twelve months from the date of this report, as current in the balance sheet as of June 30, 2023. In connection with the Second Amendment and the origination of the SWK Second Term Loan, the Company determined that the changes in the cash flows were greater than ten percent, and thus concluded that the modification should be accounted for as an extinguishment. The Company evaluated the change in the fair value of the SWK Second Term loan pre-modification compared to post-modification and concluded that a loss on extinguishment of $ 2.7 million should be recorded as of the date of the modification, January 30, 2023, which appears in the six months ended June 30, 2023, as a component of “Other income (expense), net” in the Statement of Operations. Additionally, the Company also recorded during the six months ended June 30, 2023 , in “Other income (expense), net” as “Change in fair value of debt instruments gain (loss)” a loss of $ 0.3 million for change in fair value of the Original Term Loan pre-modification from December 31, 2022 through the date of modification, as well as a loss of $ 1.5 million related to the change in fair value of the post-modification SWK Loans from the date of modification through June 30, 2023 . The Company recognized the fair value of the Third SWK Warrant of $ 0.5 million as "Loss on extinguishment” in the Statement of Operations. The Company will continue to account for the combined Original and Second SWK Term Loans using the fair value election. On June 16, 2023, SWK sold the SWK Loans to Nantahala. In connection with the sale of the SWK Loans there were no changes to any of the contractual provisions of the loans; however, the Company (i) issued to SWK the Fourth SWK Warrant to purchase 500,000 shares of the Company’s common stock at an exercise price of $ 1.00 , which expires on June 16, 2030 , with other terms and conditions being the same as the Third SWK Warrant, and (ii) has benefited from waivers/reductions provided by Nantahala with respect to the minimum amount of unencumbered liquid assets required to be maintained by the Company pursuant to the SWK Loans. The Company determined that due to its deemed participation in the transfer of the SWK Loans by way of issuing the Fourth SWK Warrant, it should account for the transfer of the SWK Loans as an extinguishment of debt. Since there were no changes to the underlying contractual provisions of each loan as part of such transfer, there was no difference in fair value at the point of transfer of the SWK Loans. However, the Fourth SWK Warrant, valued at $ 0.4 million based on a Black-Scholes calculation, was recorded as a “Loss on extinguishment of debt” in the Statement of Operations. The Company will continue to account for the SWK Loans using the fair value election. Marathon Convertible Notes On March 4, 2022, the Company also entered into the Marathon Convertible Note Purchase Agreement with MAM Aardvark, LLC (“Marathon”) and Marathon Healthcare Finance Fund, L.P. (“Marathon Fund” and together with “Marathon” each a “Holder” and collectively the “Holders”) pursuant to which the Company issued and sold to the Holders the Marathon Convertible Notes in an aggregate amount of $ 6.0 million (the “Convertible Note Financing”). The Convertible Note Financing closed on March 14, 2022 after satisfaction of closing conditions as set forth in the Marathon Convertible Note Purchase Agreement. The proceeds of the Convertible Note Financing are being used to pay fees, costs and expenses related to the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement and the Marathon Credit Agreement and for other working capital and general corporate purposes. The Marathon Convertible Notes bear interest at an annual rate of 6.5 %, with such interest payable quarterly ; provided, however, that until the first to occur of OLPRUVA TM Approval and the repayment in full of the Original Term Loan, interest will not be payable in cash, but will accrue and be payable in cash upon the earlier of a) the repayment of all obligations under the Original Term Loan and termination of such Original Term Loan or b) within three business days of OLPRUVA TM Approval. Subject to the restrictions set forth in an agreement among each of the Holders and SWK, as agent and lender, and any other intercreditor or subordination agreement entered into in connection with the Term Loan (defined below), each of the Holders has the right, during the 30-day periods beginning 12 months, 18 months and 24 months after the closing date of the Convertible Note Financing, to require the Company to redeem the Convertible Secured Note held by such Holder at a redemption price of the outstanding principal amount plus any accrued but unpaid interest. In the event of default, interest on the Marathon Convertible Notes will increase to the lower of 11.5 % per annum or the highest rate permitted by law. Each of the Holders also has the right to convert all or any portion of the outstanding principal amount plus any accrued but unpaid interest under the Marathon Convertible Note held by such Holder into shares of common stock at a conversion price of $ 2.50 per share, subject to adjustment, for an aggregate of 2.4 million shares upon conversion of the original principal amount. The nature of the adjustment to conversion price is limited to instances such as stock splits and reverse stock splits. Each Holder has certain rights with respect to the registration by the Company for resale of the shares of common stock issuable upon conversion of the Marathon Convertible Note held by such Holder which are forth in the Marathon Convertible Note Purchase Agreement. Any outstanding principal, together with all accrued and unpaid interest, will be payable on the earlier of the third anniversary of the date of issuance, or upon a change of control of the Company. Pursuant to the Marathon Convertible Note Purchase Agreement, the Marathon Convertible Notes are secured by a lien on collateral representing substantially all assets of the Company, although such security interest is subordinated to the Company’s obligations under the SWK Credit Agreement and may also be subordinated to the Company’s obligations under the Marathon Credit Agreement. On January 30, 2023, the Company entered into an Amendment Agreement (the “Marathon Amendment Agreement”) with Marathon and Marathon Fund (i.e., the Holders) with respect to the Marathon Convertible Notes. Pursuant to the terms of the Marathon Amendment Agreement, each holder agrees to defer payment by the Company of accrued and unpaid interest on their respective Marathon Convertible Note existing on the date of the Marathon Amendment Agreement through March 31, 2023, with such deferred interest, together with any accrued and unpaid interest on each Marathon Convertible Note incurred after March 31, 2023, to be due and payable in cash by the Company on April 15, 2023. Each Marathon Convertible Note is amended with retroactive effect to delete the concept of a default rate of interest. Each Marathon Convertible Note is amended to obligate the Company to repurchase such Marathon Convertible Note, on or before the fifth (5th) business day (but with five ( 5 ) business days’ notice) following the earlier of June 15, 2023 or the Company’s receipt of gross proceeds of at least $ 40.0 million from the issuance or sale of equity, debt and/or hybrid securities, loans or other financing on a cumulative basis since January 1, 2023 (excluding the Second Term Loan), at a price equal to 200 % (the “Buy-Out Percentage”) of the outstanding principal amount of such Marathon Convertible Note, plus any accrued but unpaid interest thereon to the date of such repurchase, plus 2500 basis points for each 90-day period after April 15, 2023, pro-rated for the actual number of days elapsed in the 90-day period before repurchase actually occurs (for example, if the repurchase occurred on May 30, 2023, the Buy-Out Percentage would have been increased to 212.5 %); provided, that if the Company is prohibited from effectuating such repurchases pursuant to a subordination agreement with SWK, the Company shall cause the repurchase to occur on or before the fifth (5th) business day following the earlier of such prohibition being no longer applicable or the payment in full of all senior indebtedness described in such subordination agreement, but with five ( 5 ) business days’ notice. The Company evaluated its compliance with all covenants with respect to the Marathon Convertible Note Purchase Agreement and concluded that it was in compliance as of June 30, 2023. The Company has classified the total fair value of the Marathon Convertible Notes which is due within twelve months from the date of this report, as current in the balance sheet as of June 30, 2023. In connection with the above Marathon Amendment Agreement, the Company determined that the changes in the fair value of the post-modification Marathon Convertible Note compared to the original Marathon Convertible Note were greater than ten percent, and thus concluded that the modification should be accounted for as an extinguishment. The Company evaluated the change in the fair value of the Marathon Convertible Note pre-modification compared to post-modification and concluded that a loss on extinguishment of $ 5.0 million should be recorded as of the date of modification of January 30, 2023, which appears in the six months ended June 30, 2023, as a component of “Other income (expense), net” in the Statement of Operations. Additionally, the Company also recorded in the six months ended June 30, 2023, in “Other income (expense), net” as “Change in fair value of debt instruments gain (loss)” a gain of $ 0.5 million for changes in the fair value of the pre-modification Marathon Convertible Note from December 31, 2022 through the date of modification, as well as a loss of $ 0.9 million for changes in fair value of the Marathon Convertible Note from the date of modification through June 30, 2023. The Company will continue to account for the combined Original and Second SWK Term Loans using the fair value election. Marathon Credit Agreement On March 4, 2022, the Company also entered into the Marathon Credit Agreement with the lenders party thereto and Marathon, as the agent, sole lead arranger and sole bookrunner, which provides for a senior secured term loan facility in an aggregate amount of up to $ 42.5 million in a single borrowing (the “Term Loan”). The Term Loan was available to be borrowed only following OLPRUVA TM Approval and until December 31, 2022 (i.e., if OLPRUVA TM Approval did not occur on or before December 31, 2022, then the Term Loan would not be available unless the Company was able to obtain an extension for the time period beyond December 31, 2022, to the actual PDUFA target action date), and funding of the Term Loan was also subject to the satisfaction of conditions as set forth in the Marathon Credit Agreement. Although the Company’s resubmitted NDA in respect of OLPRUVA TM (sodium phenylbutyrate) for oral suspension for the treatment of patients with UCDs was accepted for substantive review by the FDA, the PDUFA target action date was January 15, 2023. The Term Loan, if it became available, would have been used to refinance certain other indebtedness of the Company (including the Original Term Loan), to pay fees, costs and expenses related to the Marathon Credit Agreement and for other working capital and general corporate purposes. Had the Term Loan become available, the Company would have paid Marathon a commitment fee equal to 1.5 % of the term loan amount. The Marathon Credit Agreement also included an accordion feature pursuant to which the Company, Marathon and the lenders under the Marathon Credit Agreement may have agreed to increase the Term Loan commitments by up to an additional $ 50.0 million dollars for a total commitment of $ 92.5 million; provided, however, that any such increase is within the sole discretion of each party (i.e., the Company could not have unilaterally triggered such an increase). The Term Loan would have borne interest at an annual rate of 13.5 % and would have been payable quarterly in arrears. The Company would have had the option to capitalize up to 4 % of such interest commencing on the Term Loan Funding Date and continuing until the third anniversary of the Term Loan Funding Date. Commencing on the third anniversary of the Term Loan Funding Date, the principal outstanding amount of the Term Loan would have amortized at a rate of 2.78 %, payable monthly. The final maturity date of the Term Loan would have been the earlier of six years after the Term Loan Funding Date or December 31, 2028 . The Company would have had the option to prepay the Term Loan in whole or in part at any time, subject to a prepayment fee equal to (a) if the prepayment was made prior to March 4, 2025, then the greater of 5 % or the amount of interest that would have accrued from the date of prepayment until March 4, 2025, (b) if the prepayment was made on or after March 4, 2025, but prior to March 4, 2026, then 3 %, (c) if the prepayment was made on or after March 4, 2026, but prior to March 4, 2027, then 2 %, or (d) if the prepayment was made on or after March 4, 2027, then 1 %. The Term Loan would have been secured by a first priority lien on all assets of the Company and any of its future subsidiaries pursuant to a Guarantee and Collateral Agreement to be entered into on the Term Loan Funding Date between the Company and Marathon, as agent (the “Marathon Security Agreement”). The Marathon Credit Agreement contained customary representations and warranties and affirmative and negative covenants. The Company paid $ 0.2 million in commitment fees to Marathon in connection with obtaining the commitments in respect of the Term Loan and will pay $ 0.6 million in additional commitment fees to Marathon following OLPRUVA TM Approval or any change of control of the Company or sale or transfer of the OLPRUVA TM product. In connection with the Marathon Credit Agreement, on March 4, 2022, the Company, Marathon and the Marathon Fund also entered into the Royalty Agreement pursuant to which, in the event of the funding of the Term Loan, the Company will pay Marathon and the Marathon Fund, on a quarterly basis, 2 % of certain aggregate commercial revenue from sales of OLPRUVA TM during that quarter (i.e., 2 % of the net sales and of the amount of certain other payments), subject to a cap on the aggregate amount of such payments of $ 15.0 million. Upon a change of control of the Company or the sale of the OLPRUVA TM business to a third party, the Company would pay Marathon and the Marathon Fund the difference between $ 15.0 million and the aggregate amount of the payments previously made by the Company to Marathon and the Marathon Fund pursuant to the Royalty Agreement. As of December 31, 2022, the Company had not requested funding of the Term Loan, and as such had not triggered the associated Royalty Agreement. On December 30, 2022, the Company and Marathon entered into an Extension Agreement which extended the Term Loan Commitment Date to January 16, 2023. With respect to the Credit Agreement, dated as of March 4, 2022, as amended by the Extension Agreement dated as of December 30, 2022 (as so amended, the “Marathon Term Credit Agreement”), among the Company, the Lenders party thereto (the “Lenders”) and Marathon, not individually, but solely in its capacity as administrative and collateral agent for the Lenders (the “Administrative Agent”), which provided for a senior secured term loan facility in an aggregate amount of up to $ 42.5 million in a single borrowing, the parties have entered into a Termination Agreement dated as of January 30, 2023 (the “Termination Agreement”). Pursuant to the Termination Agreement, the lending commitments of the Lenders are terminated without having been drawn upon, the Marathon Term Credit Agreement and all other loan documents entered into in connection therewith are terminated, and the Company agrees to pay the Administrative Agent a commitment fee of $ 0.6 million (which was earned as a result of the recent approval by the FDA of OLPRUVA for oral suspension in the U.S. for the treatment of certain patients living with urea cycle disorders involving deficiencies of carbamylphosphate synthetase, ornithine transcarbamylase, or argininosuccinic acid synthetase) and certain legal costs on the date on which the repurchase of the Marathon Convertible Notes occurs pursuant to the Marathon Amendment Agreement. Accounting for SWK Original and Second Term Loan and Marathon Convertible Notes The Company is eligible to elect the fair value option under ASC 815 and bypass analysis of potential embedded derivatives and further analysis of bifurcation of any such financial instruments and has elected such option. The Company recognized the First SWK Warrant at fair value as of the date of the close of the transaction and recorded it in equity. The Original Term Loan and Marathon Convertible Notes met the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC 825-10-15-4 and do not meet the definition of any of the financial instruments found within ASC 825-10-15-5 that are not eligible for the fair value option. Additionally, as noted above in connection with the amendments, the Company performed the same evaluation on the Original Term Loan as amended, the Second Term Loan, and Marathon Convertible Notes, as amended, and concluded that the fair value option was still appropriate. Therefore, the Original Term Loan, Second Term Loan, and Marathon Convertible Notes are recorded at their fair value upon issuance and subsequently re-measured at each reporting period until their maturity, prepayment or conversion. Additionally, all issuance costs incurred in connection with a debt instrument that is measured at fair value pursuant to the election of the fair value option are expensed during the period the debt is acquired. The Original Term Loan was recorded at fair value of $ 6.2 million after allocating the fair value of the First SWK Warrant of $ 0.3 million. The Company incurred $ 1.2 million of debt issuance costs, which were expensed as incurred due to the election of the fair value option and were included in interest expense in the accompanying statement of operations for the year ended December 31, 2022. Debt issuance costs were comprised of $ 0.5 million that related to the costs and expense paid directly to SWK and the Holders, $ 0.7 million of costs and expenses paid to the Company’s financial advisor, and other legal and accounting costs. The fee of $ 0.2 million paid in connection with obtaining the commitments in respect of the Term Loan was paid to Marathon through gross proceeds received from the Marathon Convertible Notes. The Company recorded this fee as expense during the year ended December 31, 2022. As a result of the approval of OLPRUVA TM , the Company will pay $ 0.6 million for the Term Loan commitment fee and has recognized a liability for $ 0.6 million and a current asset for deferred financing costs of $ 0.4 million as of December 31, 2022. The Company recognized expense of $ 0.2 million during the year ended December 31, 2022 and $ 0.4 million during the six months ended June 30, 2023, related to this fee. As of June 30, 2023, this amount remains unpaid. The Company engaged an exclusive financial advisor with respect to the financings contemplated by the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement and the Marathon Credit Agreement. In connection with the funding of the Original Term Loan and the Convertible Note Financing, the Company paid its financial advisor a fee of $ 0.5 million for its services. Promissory note payable to an officer On June 22, 2023, the Company received $ 1.0 million in funding in exchange for the issuance of an unsecured, subordinated promissory note for that principal amount (the “Schelling Promissory Note”) to Christopher Schelling, the Company’s Chief Executive Officer and Founder, a member of the Company’s Board of Directors, and the beneficial owner of more than 10 % of the Company’s outstanding common stock. Pursuant to the Schelling Promissory Note, the principal amount will accrue interest at a rate of 6 % per annum, and all principal and accrued interest will be due and payable on August 21, 2023 (the “Maturity Date”); provided, however, that the repayment obligation of the Company under the Schelling Promissory Note is expressly subordinated to the Company’s obligations under its outstanding secured debt. If the Schelling Promissory Note is not paid i |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 7. FAIR VALUE MEASUREMENTS In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company reviews the assets and liabilities that are subject to ASC 815-40. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3. The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below. The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of June 30, 2023. As of June 30, 2023 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Assets: Money Market Funds in Cash Equivalents $ 1,053,416 $ 1,053,416 $ 1,053,416 $ — $ — Liabilities: Debt: Marathon Convertible Notes 13,078,200 13,078,200 — — 13,078,200 SWK Loans 17,986,848 17,986,848 — — 17,986,848 $ 31,065,048 $ 31,065,048 $ — $ — $ 31,065,048 As of December 31, 2022 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Assets: Money Market Funds in Cash Equivalents $ 1,829,218 $ 1,829,218 $ 1,829,218 $ — $ — Liabilities: Debt: Marathon Convertible Notes 6,360,600 6,360,600 — — 6,360,600 SWK Loans 5,567,231 5,567,231 — — 5,567,231 $ 11,927,831 $ 11,927,831 $ — $ — $ 11,927,831 A lattice-based model was used to estimate the fair value of the Marathon Convertible Notes at June 30, 2023. The lattice model utilizes a “decision tree,” whereby future movement in the Company’s common stock price is estimated based on a volatility factor. Additionally, the Company included in its decision tree, when relevant, a probability assessment of the approval of ACER-001 and the resulting impact of such an event. The Company classified the fair value of the Marathon Convertible Notes as a Level 3 measurement due to the lack of observable market data. The lattice model requires the development and use of assumptions, including the Company’s stock price volatility returns, an appropriate risk-free interest rate, and derived credit spread, default probability rate, and expected recovery rate given default. The Company updated its estimate of fair value of the SWK Loans based on the probability-weighted net present value of future cash flows at June 30, 2023. The significant unobservable inputs used in calculating the fair value of the Marathon Convertible Notes and SWK Loans represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Any significant changes in the inputs described herein may result in significantly higher or lower fair value measurements. In the six months ended June 30, 2023 the Company recorded in “Other income (expense), net” as “Changes in fair value of debt instruments gain (loss)” a loss of $ 0.3 million, for change in fair value of the Original Term Loan pre-modification from December 31, 2022 through the date of modification, as well as a loss of $ 3.6 million related to the change in fair value of the post-modification SWK Loans from the date of modification through June 30, 2023. Additionally, during the six months ended June 30, 2023 , the adjustment to fair value for the SWK Loans during the three months ended March 31, 2023 includes $ 2.7 million of increase in the post-modification cash flows of the instrument, which was recognized as a loss on extinguishment during the period. During the three months ended June 30, 2023, the Company recorded a loss of $ 1.8 million for the change in fair value of the SWK Loans post-modification from March 31, 2023 through June 30, 2023. In the six months ended June 30, 2023 , the Company recorded in “Other income (expense), net” as “Changes in fair value of debt instruments gain (loss)” a gain of $ 0.5 million for changes in the fair value of the pre-modification Marathon Convertible Note from December 31, 2022 through the date of modification, as well as a loss of $ 2.6 million for changes in fair value of the Marathon Convertible Note from the date of modification through June 30, 2023. Additionally, during the six months ended June 30, 2023 , the adjustment to fair value for the Marathon Convertible Note during the three months ended March 31, 2023 includes $ 5.0 million of increase in the post-modification cash flows of the instrument, which was recognized as a loss on extinguishment during the period. During the three months ended June 30, 2023 , the Company recorded a loss of $ 1.7 million for the change in fair value of the Marathon Convertible Note post-modification from March 31, 2023 through June 30, 2023. For the Three Months For the Six Months Activity recorded as change in fair value gain (loss), SWK Loans Loss from change in fair value from December 31, 2022 to date of modification $ — $ ( 299,923 ) Loss from change in fair value from date of modification to June 30, 2023 ( 1,797,294 ) ( 3,599,362 ) Loss from extinguishment of debt related to increase in post-modification cashflows — ( 2,710,194 ) Total change in fair value recognized, SWK Loans ( 1,797,294 ) ( 6,609,479 ) Activity recorded as change in fair value gain (loss), Marathon Convertible Note Gain from change in fair value from December 31, 2022 to date of modification $ — $ 498,600 Loss from change in fair value from date of modification to June 30, 2023 ( 1,686,033 ) ( 2,616,633 ) Loss from extinguishment of debt related to increase in post-modification cashflows — ( 5,008,800 ) Total change in fair value recognized, Marathon Convertible Note ( 1,686,033 ) ( 7,126,833 ) Total change in fair value recognized during the three and six months ended June 30, 2023 $ ( 3,483,327 ) $ ( 13,736,312 ) December 31, 2022 Loan Received Payments Accretion/ Interest Accrued Adjustment to Fair Value Mark to Market June 30, 2023 Marathon Convertible Notes $ 6,360,600 $ — $ ( 409,233 ) $ — $ 7,126,833 (1) $ 13,078,200 SWK Loans 5,567,231 7,000,000 ( 1,189,862 ) — 6,609,479 (2) 17,986,848 $ 11,927,831 $ 7,000,000 $ ( 1,599,095 ) $ — $ 13,736,312 $ 31,065,048 (1) The Adjustment to Fair Value for the Marathon Convertible Notes during the six months ended June 30, 2023 , includes $ 5.0 million of increase in the post-modification cash flows of the instrument, which was recognized as a loss on extinguishment during the period. (2) The Adjustment to Fair Value for the SWK Loans during the six months ended June 30, 2023 , includes $ 2.7 million of increase in the post-modification cash flows of the instrument, which was recognized as a loss on extinguishment during the period. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES License Agreements In April 2014, the Company obtained exclusive rights to intellectual property relating to OLPRUVA TM for the treatment of inborn errors of branched-chain amino acid metabolism, including MSUD, and preclinical and clinical data, through a license agreement with Baylor College of Medicine (“BCM”). Under the terms of the agreement, as amended, the Company has worldwide exclusive rights to develop, manufacture, use, sell and import licensed products as defined in the agreement. The license agreement requires the Company to make certain upfront and annual payments to BCM, as well as reimburse certain legal costs, make payments upon achievement of defined milestones, and pay royalties in the low single-digit percent range on net sales of any developed product over the royalty term. In August 2016 , the Company signed an agreement with Assistance Publique—Hôpitaux de Paris, Hôpital Européen Georges Pompidou (“AP-HP”) (via its Department of Clinical Research and Development) granting the Company the exclusive worldwide rights to access and use data from a randomized, controlled clinical study of celiprolol. The Company used this pivotal clinical data to support an NDA regulatory filing for EDSIVO TM for the treatment of vEDS. The agreement requires the Company to make certain upfront payments to AP-HP, as well as reimburse certain costs and make payment of royalties in the low single-digit percent range on net sales of celiprolol over the royalty term. In September 2018 , the Company entered into a License Agreement for Development and Exploitation with AP-HP to acquire the exclusive worldwide intellectual property rights to three European patent applications relating to certain uses of celiprolol including (i) the optimal dose of celiprolol in treating vEDS patients, (ii) the use of celiprolol during pregnancy and (iii) the use of celiprolol to treat kyphoscoliotic Ehlers-Danlos syndrome (type VI). Pursuant to the agreement, the Company will reimburse AP-HP for certain costs and will pay annual maintenance fee payments. Subject to a minimum royalty amount, the Company will also pay royalty payments on annual net sales of celiprolol during the royalty term in the low single digit percent range, depending upon whether there is a valid claim of a licensed patent. Under the agreement, the Company will control and pay the costs of ongoing patent prosecution and maintenance for the licensed applications. The Company may terminate the agreement in its sole discretion upon written notice to AP-HP, and AP-HP may terminate the agreement in the event the Company fails to make the required payments after notice and opportunity to cure. Additionally, the agreement will terminate if the Company terminates clinical development, marketing approval is withdrawn by the health or regulatory authorities in all countries, the Company ceases to do business or there is a procedure of winding-up by court decision against the Company. The Company subsequently filed three U.S. patent applications on this subject matter in October 2018. In December 2018, the Company entered into an exclusive license agreement with Sanofi granting the Company worldwide rights to ACER-801, a clinical-stage, selective, non-peptide tachykinin NK3 receptor antagonist. The agreement required the Company to make a certain upfront payment to Sanofi, make payments upon achievement of defined development and sales milestones and pay royalties on net sales of ACER-801 over the royalty term. In May 2021 , the Company entered into an agreement with Emory University to acquire the exclusive worldwide intellectual property rights to a family of patents and patent applications related to the use of neurokinin receptor antagonists in managing conditioned fear and treating anxiety disorders including post-traumatic stress disorder. The Company has obtained issued claims in both Europe and the United States and continues to pursue additional claim scope in both jurisdictions. Pursuant to the agreement, the Company reimburses Emory for certain patent prosecution costs and annual maintenance fees. Should the Company obtain approval for a treatment method within the scope of a valid claim of a licensed patent, the Company will be obligated to make royalty payments on annual net sales of osanetant either in the low single digit percent range, or alternatively, that meet an agreed minimum royalty. Collaboration Agreement On March 19, 2021, the Company entered into the Collaboration Agreement with Relief providing for the development and commercialization of OLPRUVA TM for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD. The Collaboration Agreement is the culmination of the Option Agreement previously entered into between the Company and Relief on January 25, 2021, which provided Relief with an exclusive period of time up to June 30, 2021 for the parties to enter into a mutually acceptable definitive agreement with respect to the potential collaboration and license arrangements. In consideration for the grant of the exclusivity option, (i) the Company received from Relief an upfront non-refundable payment of $ 1.0 million, (ii) Relief provided to the Company a 12 -month secured loan in the principal amount of $ 4.0 million with interest at a rate equal to 6 % per annum, as evidenced by a promissory note the Company issued to Relief, and (iii) the Company granted Relief a security interest in all of its assets to secure performance of the promissory note, as evidenced by a security agreement. Upon signing the Collaboration Agreement, the Company received a $ 10.0 million cash payment from Relief (the $ 14.0 million (“Reimbursement Payment”) from Relief to the Company, offset by repayment of the $ 4.0 million outstanding balance of the prior loan, plus interest), and Relief released its security interest in the Company’s assets pursuant to the Promissory Note. Under the terms of the Collaboration Agreement, Relief committed to pay the Company Development Payments of up to an additional $ 20.0 million for U.S. development and commercial launch costs for the UCDs and MSUD indications. During the three months ended June 30, 2021, the Company received from Relief the $ 10.0 million First Development Payment. The Company was contractually entitled to receive from Relief an additional $ 10.0 million Second Development Payment conditioned upon the FDA’s acceptance of an NDA for OLPRUVA TM in a UCD for filing and review. This acceptance was received on October 4, 2021. On October 6, 2021, the Company entered into a Waiver and Agreement with Relief to amend the timing for the Second Development Payment. The Company received the Second Development Payment in two $ 5.0 million tranches on each of October 12, 2021 and January 14, 2022 . Further, the Company retained development and commercialization rights in the U.S., Canada, Brazil, Turkey and Japan (“Acer Territory”). The companies will split net profits from the Acer Territory 60 %:40% in favor of Relief. Relief licensed the rights for the rest of the world (“Relief Territory”), where the Company will receive from Relief a 15 % royalty on all net sales received in the Relief Territory. The Company could also receive a total of $ 6.0 million in milestone payments based on the first European (EU) marketing approvals of OLPRUVA TM for a UCD and MSUD. Litigation From time to time, the Company may become involved in litigation or proceedings relating to claims arising out of its operations. To the extent that the Company incurs legal costs associated with any potential loss contingency, those legal costs are expensed as incurred. The Securities Class Action and Stockholder Derivative Actions On July 1, 2019, plaintiff Tyler Sell filed a putative class action lawsuit, Sell v. Acer Therapeutics Inc. et al., No. 1:19-cv-06137GHW, against the Company, Chris Schelling and Harry Palmin, in the U.S. District Court for the Southern District of New York. The Complaint alleged that the Company violated federal securities laws by allegedly making material false and misleading statements regarding the likelihood of FDA approval for the EDSIVO TM NDA. With the selection of a lead plaintiff, the case was later captioned Skiadas v. Acer Therapeutics Inc. et al. The parties reached an agreement in principle to settle this action for a payment of $ 8.4 million, which was approved by the Court on January 7, 2022. As of December 31, 2021, the Company had recognized liabilities of $ 8.4 million for the proposed settlement and of $ 0.9 million for costs related to both the derivative and class action cases in other current liabilities and had also recognized an asset of an equal amount in other current assets representing the recovery from its insurance carriers of an equal amount. Both the liabilities and the asset were derecognized during the year ending December 31, 2022 as payment of the settlement was made by the Company’s insurance carriers. On August 12, 2019, a stockholder derivative action, Gress v. Aselage et al., No. 1:19-cv-01505-MN, was filed in the U.S. District Court for the District of Delaware against certain of the Company’s present and former officers and directors, asserting damages resulting from the alleged breach of their fiduciary duties, based on the same facts at issue in the Skiadas case. On March 17, 2020, a second stockholder derivative action, Giroux v. Amello et al., No. 1:20-cv-10537-GAO, was filed in the U.S. District Court for the District of Massachusetts against certain of the Company’s present and former officers and directors, asserting claims based on the same facts at issue in the Skiadas and Gress cases. On June 23, 2020, a third stockholder derivative action, King v. Schelling, et al., No. 1:20-cv-04779-GHW, was filed in the U.S. District Court for the Southern District of New York against certain of the Company’s present and former officers and directors that arises from the same facts underlying the Skiadas, Gress, and Giroux cases. On July 6, 2020, a fourth stockholder derivative action, Diaz v. Amello et al., No. 1:20-cv-00909-MN, was filed in the U.S. District Court for the District of Delaware. By Stipulation and Order dated August 7, 2020, the Gress and Diaz cases were consolidated under the caption In re Acer Therapeutics Inc. Derivative Litigation, Lead Case No. 1:19-cv-01505-MN. As disclosed previously, the parties reached an agreement to settle all of the derivative cases. At a hearing held on May 12, 2021 in the District Court of Massachusetts, the Court administering the matter, the settlement was approved. Payment of the settlement amount of $ 0.5 million, plus legal fees and costs in excess of the retention (deductible) amount, has been made by the Company’s insurance carriers. Commitments Under Clinical Trial Agreements The Company has entered into agreements with two CROs in connection with the conduct of two separate clinical trials for ACER-801 and EDSIVO TM . As a part of those agreements, the Company has agreed to pay any third-party costs or subcontracts associated with those agreements which are unpaid by the CRO. Such reimbursement would apply only to costs approved in advance by the Company. Those CRO agreements are subject to termination at any time, with or without cause, by the Company, in which case only costs earned or non-cancellable to date of termination would remain subject to reimbursement. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Deficit | 9. STOCKHOLDERS’ DEFICIT At-the-Market Facility On November 9, 2018, the Company entered into a sales agreement with Roth Capital Partners, LLC, and on March 18, 2020, the Company entered into an amended and restated sales agreement with JonesTrading Institutional Services LLC and Roth Capital Partners, LLC. The agreement provides a facility for the offer and sale of shares of common stock from time to time having an aggregate offering price of up to $ 50.0 million depending upon market demand, in transactions deemed to be an “at-the-market” (“ATM”) offering. The Company has no obligation to sell any shares of common stock pursuant to the agreement and may at any time suspend sales pursuant to the agreement. Each party may terminate the agreement at any time without liability. The Company will need to keep current its shelf registration statement and the offering prospectus relating to the ATM facility, in addition to providing certain periodic deliverables under the sales agreement, in order to use such facility. Due to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $ 75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period, the Company is currently only able to issue a limited number of shares which aggregate to not more than one-third of the Company’s public float. During the three months ended June 30, 2023, the Company sold an aggregate of 456,886 shares of common stock through the ATM facility at an average gross sale price of $ 0.7912 per share for gross proceeds of $ 0.4 million . Proceeds for the three months ended June 30, 2023, net of $ 14 thousand in fees and offering costs, were $ 0.3 million . During the six months ended June 30, 2023, the Company sold an aggregate of 1,919,140 shares of common stock through the ATM facility at an average gross sale price of $ 2.3290 per share for gross proceeds of $ 4.5 million . Proceeds for the six months ended June 30, 2023, net of $ 0.2 million in fees and offering costs, were $ 4.3 million . During the three and six months ended June 30, 2022 , the Company sold 1,062,547 shares of common stock through the ATM facility at a gross sale price of $ 3.0719 per share, for gross proceeds of $ 3.3 million. Proceeds, net of $ 0.2 million of fees and offering costs, were $ 3.1 million. As of June 30, 2023, $ 29.0 million remained available under the Company’s ATM facility, subject to certain limitations. Common Stock Purchase Agreement On April 30, 2020, the Company entered into an equity line purchase agreement and a registration rights agreement pursuant to which Lincoln Park committed to purchase up to $ 15.0 million of the Company’s common stock. Under the terms and subject to the conditions of the purchase agreement, the Company had the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park was obligated to purchase up to $ 15.0 million of the Company’s common stock. Such sales of common stock by the Company were subject to certain limitations, and occurred from time to time, at the Company’s sole discretion, over the 36-month period commencing on June 8, 2020. The number of shares the Company was able to sell to Lincoln Park on any single business day in a regular purchase was 50,000 , but that amount was able to be increased up to 100,000 shares, depending upon the market price of the Company’s common stock at the time of sale and subject to a maximum limit of $ 1.0 million per regular purchase. The purchase price per share for each such regular purchase was based on prevailing market prices of the Company’s common stock immediately preceding the time of sale as computed under the purchase agreement. In addition to regular purchases, the Company was also able to direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases if the closing sale price of the common stock exceeded certain threshold prices as set forth in the purchase agreement. Under applicable rules of the Nasdaq Capital Market, in no event may the Company have issued or sold to Lincoln Park under the purchase agreement more than 19.99 % of the shares of the Company’s common stock outstanding immediately prior to the execution of the purchase agreement, unless (i) the Company obtained stockholder approval to issue shares of common stock in excess of the Exchange Cap or (ii) the average price of all applicable sales of common stock to Lincoln Park under the purchase agreement equaled or exceeded $ 2.1668 , such that issuances and sales of the common stock to Lincoln Park under the purchase agreement would be exempt from the issuance limitation under applicable Nasdaq rules. Lincoln Park had no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park was obligated to make purchases as the Company directed, subject to certain conditions. In all instances, the Company may not have sold shares of its common stock to Lincoln Park under the purchase agreement if doing so would have resulted in Lincoln Park beneficially owning more than 9.99 % of its common stock. The Company determined that the right to sell additional shares represented a freestanding put option under ASC 815 Derivatives and Hedging, but had a fair value of zero, and therefore no additional accounting was required. Actual sales of shares of common stock to Lincoln Park under the purchase agreement depended on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. However, there was no assurance that the Company would have been able to receive the entire obligation amount from Lincoln Park because the purchase agreement contained limitations, restrictions, requirements, events of default and other provisions that could have limited the Company’s ability to cause Lincoln Park to buy common stock from the Company. The proceeds under the purchase agreement to the Company depended on the frequency and prices at which the Company sold shares of its stock to Lincoln Park. The Company issued 148,148 shares of common stock to Lincoln Park as a commitment fee in connection with entering into the purchase agreement. The $ 0.4 million fair value of the commitment fee shares was recorded to General and administrative expenses along with other costs incurred in connection with entering into the purchase agreement. During the three and six months ended June 30, 2022 , the Company sold 300,000 of common stock under its purchase agreement with Lincoln Park at a weighted average gross sale price of $ 1.25 per share, resulting in proceeds of $ 0.4 million. The Lincoln Park facility was completed on December 30, 2022 and is now terminated. Private Placement On November 29, 2022, the Company entered into a securities purchase agreement for the sale and issuance of an aggregate of 1,229,508 shares of the Company’s common stock, for an aggregate purchase price of $ 1.5 million, in a private placement with the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors and with the Chairman of the Company’s Board of Directors at a price per share of $ 1.22 . The shares of common stock issued in the private placement constitute “restricted securities” under the federal securities laws and are subject to a minimum six-month holding period. Securities Purchase Agreement On March 21, 2023, the Company entered into the Purchase Agreement with the Purchaser pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering, an aggregate of 2,335,000 shares of Common Stock, par value $ 0.0001 per share, and Pre-Funded Warrants to purchase up to 585,306 shares of Common Stock at an exercise price of $ 0.001 per share, and (ii) in a concurrent private placement, warrants to purchase up to 2,920,306 shares of Common Stock (the “Common Warrants”) at an exercise price of $ 0.791 per share. Such registered direct offering and concurrent private placement are referred to herein as the “March 2023 Offering.” The combined purchase price for one Share and one Common Warrant was $ 0.916 , and the combined purchase price for one Pre-Funded Warrant and one Common Warrant was $ 0.915 . The March 2023 Offering was priced at-the-market under Nasdaq rules. The Company received aggregate gross proceeds from the Offering of approximately $ 2.7 million before deducting the placement agent fee (as described in greater detail below) and related offering expenses, resulting in net proceeds of approximately $ 2.3 million. The March 2023 Offering closed on March 24, 2023. The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations of the parties. Pursuant to the terms of the Purchase Agreement and subject to certain exceptions, the Company has agreed to certain restrictions on the issuance and sale of its Common Stock or Common Stock Equivalents (as defined in the Purchase Agreement) during the 30-day period following the closing of the March 2023 Offering. The Shares, the Pre-Funded Warrants and the shares of Common Stock issuable thereunder were offered by the Company pursuant to a registration statement on Form S-3 (File No. 333-261342), which was filed with the Securities and Exchange Commission (the “Commission”) on November 24, 2021 and was declared effective by the Commission on December 7, 2021 (the “Registration Statement”), and a prospectus supplement dated as of March 21, 2023. We suspended our ATM facility in connection with the March 2023 Offering and entered into a related restriction prohibiting us from entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of our common stock or securities convertible or exercisable into our common stock, subject to certain exceptions, until April 24, 2023. We resumed our ATM activity after April 24, 2023 and, during the balance of the second quarter of 2023, we sold 456,886 shares of common stock through our ATM facility at a gross sale price of $ 0.7912 per share, for proceeds of $ 0.4 million. Proceeds, net of $ 14 thousand of fees and offering costs, were $ 0.3 million. The Common Warrants were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and, along with the shares of Common Stock underlying the Common Warrants, have not been registered under the Securities Act or applicable state securities laws. The Pre-Funded Warrants were offered, in lieu of shares of Common Stock, to any Purchaser whose purchase of shares of Common Stock and Common Warrants in the Offering would otherwise result in such Purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99 % (or, at such Purchaser’s option upon issuance, 9.99 %) of the Company’s outstanding Common Stock immediately following the consummation of the Offering. Each Pre-Funded Warrant represented the right to purchase shares of Common Stock at an exercise price of $ 0.001 per share of Common Stock. The Pre-Funded Warrants were exercisable immediately and may have been exercised at any time until the Pre-Funded Warrants were exercised in full, subject in each case to the beneficial ownership limitations set forth in the Pre-Funded Warrant. The Pre-Funded Warrants were exercised in full during the three months ended June 30, 2023. Each Common Warrant represents the right to purchase shares of Common Stock at an exercise price of $ 0.791 per share of Common Stock. The Common Warrants are exercisable immediately and have a term of five and one-half years from the issuance date, subject in each case to the beneficial ownership limitations set forth in the form of Common Warrant. The Company recognized the Common Warrants and Pre-Funded Warrants as classified as equity. The Company entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright agreed to serve as the exclusive placement agent for the issuance and sale of securities of the Company pursuant to the Purchase Agreement. As compensation for such placement agent services, the Company has agreed to pay Wainwright a total cash fee equal to 7.5 % of the aggregate gross proceeds of the Offering; a non-accountable expense allowance of $ 70 thousand and clearing fees of $ 16 thousand. The Company has also granted Wainwright a right of first refusal for a period of six months following the closing of the Offering to act as sole book-running manager, sole underwriter or sole placement agent for any public or private placement or other capital-raising financing, subject to certain exceptions. 2018 Stock Incentive Plan The Company’s 2018 Stock Incentive Plan (the “2018 Plan”), was adopted on May 14, 2018, and provided for the grant of shares of common stock as stock options, restricted stock, stock appreciation rights, restricted stock units, performance-based awards and cash-based awards that may be settled in cash, stock or other property to employees, executive officers, directors, and consultants. The total number of shares reserved for issuance under the 2018 Plan also consists of the sum of the number of shares subject to outstanding awards under the Company’s 2010 Stock Incentive Plan, as amended and restated (the “2010 Plan”), and the 2013 Stock Incentive Plan, as amended (the “2013 Plan”), as of the effective date of the 2018 Plan that are subsequently forfeited or terminated for any reason prior to being exercised or settled, plus the number of shares subject to vesting restrictions under the 2010 Plan and the 2013 Plan on the effective date of the 2018 Plan that are subsequently forfeited, plus the number of shares reserved but not issued or subject to outstanding grants under the 2010 Plan and the 2013 Plan as of the effective date of the 2018 Plan, up to a maximum of 635,170 shares in aggregate. In addition, the number of shares authorized for issuance under the 2018 Plan is automatically increased (the “evergreen provision”) on the first day of each fiscal year beginning on January 1, 2019, and ending on (and including) January 1, 2028 , in an amount equal to the lesser of (i) 4 % of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) another amount (including zero) determined by the Company’s Board of Directors. On January 1, 2023 and 2022, 784,971 and 572,410 additional shares, respectively, were authorized according to the evergreen provision. On February 18, 2022, the Company’s Board of Directors amended and restated the 2018 Plan to add a provision permitting the grant of inducement awards under Nasdaq Marketplace Rule 5635(c)(4) to eligible recipients and initially reserved 200,000 shares of the Company’s common stock for issuance pursuant to inducement awards granted under the 2018 Plan. Any shares subject to awards granted under the 2018 Plan that are forfeited or terminated before being exercised or settled, or are not delivered to the participant because such award is settled in cash, will again become available for issuance under the 2018 Plan. Shares withheld to satisfy the grant, exercise price or tax withholding obligation related to an award will again become available for issuance under the 2018 Plan. The 2018 Plan is administered by the Company’s Board of Directors, which may in turn delegate authority to administer the plan to a committee such as the Compensation Committee, referred to herein as the 2018 Plan administrator. Subject to the terms of the 2018 Plan, the 2018 Plan administrator will determine recipients, the number of shares or amount of cash subject to awards to be granted, whether an option is to be an incentive stock options or non-incentive stock options and the terms and conditions of the stock awards, including the period of their exercisability and vesting. Subject to the limitations set forth below, the 2018 Plan administrator will also determine the exercise price of options granted under the 2018 Plan. The 2018 Plan expressly provides that, without the approval of the stockholders, the 2018 Plan administrator does not have the authority to reduce the exercise price of any outstanding stock options or stock appreciation rights under the 2018 Plan (except in connection with certain corporate transactions, such as stock splits, certain dividends, recapitalizations, reorganizations, mergers, spin-offs and the like), or cancel any outstanding underwater stock options or stock appreciation rights in exchange for cash or new stock awards under the 2018 Plan. Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of ten years . Stock options granted to executive officers and employees generally vest either 1) over a four-year period, with 25 % vesting on the one-year anniversary of the grant date and the remaining 75 % vesting quarterly over the remaining three years, assuming continued service, and with vesting acceleration in full immediately prior to a change in control, or 2) for certain stock options granted on September 18, 2019, 50 % vest on each of January 1, 2021 and January 1, 2022, assuming continued service, and with vesting acceleration in full immediately prior to a change in control. For certain grants such as those made to members of the Company’s Board of Directors, vesting occurs 12 months after the date of the grant. Restricted stock units generally vest and are settled upon the first anniversary of the grant date. There were no grants of restricted stock units during the three and six months ended June 30, 2023 or 2022 and no unvested restricted stock units as of June 30, 2023 or 2022. At June 30, 2023 , 913,878 shares of common stock remained available for the grant of future awards under the 2018 Plan. 2013 Stock Incentive Plan The Company’s 2013 Plan provided for the issuance of shares of common stock as incentive or non-qualified stock options and/or restricted common stock to employees, officers, directors, consultants and advisers. Option awards were generally granted with an exercise price equal to the fair value of the common stock at the date of grant and had contractual terms of ten years . At June 30, 2023 , all shares available under the 2013 Plan were subject to outstanding equity awards, and no new awards may be granted under the 2013 Plan. 2010 Stock Incentive Plan The Company’s 2010 Plan, as amended and restated, provided for the grant of shares of common stock as incentive or non-qualified stock options, stock appreciation rights, restricted stock units and/or restricted common stock to employees, officers, directors, consultants and advisers. Option awards were generally granted with an exercise price equal to the fair value of the common stock at the date of grant and had contractual terms of ten years . At June 30, 2023 , all shares available under the 2010 Plan were subject to outstanding equity awards, and no new awards may be granted under the 2010 Plan. Stock Plan Activity A summary of option activity under the 2018 Plan, 2013 Plan, and 2010 Plan for the six months ended June 30, 2023 and 2022, is as follows: Year-to-Date Activity Number Weighted Weighted Aggregate Options outstanding at December 31, 2022 2,794,850 $ 6.36 7.4 Granted 630,000 $ 1.67 Cancelled/forfeited ( 369,594 ) $ 4.27 Options outstanding at June 30, 2023 3,055,256 $ 5.65 7.4 $ — Options exercisable at June 30, 2023 1,749,361 $ 8.18 6.3 $ — Year-to-Date Activity Number Weighted Weighted Aggregate Options outstanding at December 31, 2021 1,954,975 $ 8.16 7.8 Granted 958,000 $ 2.33 Cancelled/forfeited ( 62,188 ) $ 4.12 Options outstanding at June 30, 2022 2,850,787 $ 6.29 8.0 $ — Options exercisable at June 30, 2022 1,322,180 $ 9.80 6.6 $ — At June 30, 2023 , there was $ 2.2 million of unrecognized compensation expense related to the stock-based compensation arrangements granted under all plans, which will be recognized as expense over the remaining vesting period for those options of 2.7 years. The weighted average grant date fair value of options granted during the six months ended June 30, 2023 was $ 1.43 . The fair value of shares vested during the three and six months ended June 30, 2023 was $ 0.2 million and $ 1.0 million, respectively. The fair value of shares vested during the three and six months ended June 30, 2022 was $ 0.4 million and $ 1.5 million, respectively. The amount of stock-based compensation expense recorded to research and development expenses and to general and administrative expenses is detailed in table below: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation Research and development $ 83,998 $ 158,880 $ 199,578 $ 299,320 General and administrative 175,905 301,897 345,834 635,554 Total stock-based compensation expense $ 259,903 $ 460,777 $ 545,412 $ 934,874 Warrants issued to SWK Six Months Ended June 30, 2023 2022 Number Weighted Average Exercise Price Number Weighted Average Exercise Price Outstanding at beginning of the period 250,000 $ 2.08 — $ — Granted during the period 750,000 1.46 150,000 2.46 Outstanding at end of the period 1,000,000 $ 1.62 150,000 $ 2.46 Exercisable at end of the period 1,000,000 $ 1.62 150,000 $ 2.46 Weighted average remaining life 6.4 years 6.8 years Warrants issued in March 2023 Offering Six Months Ended June 30, 2023 Number Weighted Average Exercise Price Outstanding at beginning of the period — $ — Granted during the period 3,505,612 0.66 Exercised during the period ( 585,306 ) — Outstanding at end of the period 2,920,306 $ 0.79 Exercisable at end of the period 2,920,306 $ 0.79 Weighted average remaining life 5.2 years |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 10. NET LOSS PER SHARE Basic net loss per share is computed by dividing the net loss in each period by the weighted-average number of common shares outstanding during such period. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the periods presented, common stock equivalents, consisting of stock-based awards and the SWK Warrants, were not included in the calculation of the diluted loss per share because to do so would be antidilutive. The exercise prices of the SWK Warrants are subject to a proportionate adjustment in the event of a stock dividend or stock split. The Company concluded that they should be deemed participating securities. However, as the Company is currently operating in a net loss position for the three and six month periods ended June 30, 2023 and has not declared any dividends, such inclusion of the participating securities related to the SWK Warrants (as common stock equivalents) would be antidilutive and thus would be excluded from the calculation of net loss per share. When calculating diluted net loss per share, the Company includes, only if dilutive, the potential common shares associated with the Marathon Convertible Notes using the “if-converted” method, which adjusts the numerator for any impact to earnings for the period and includes in the denominator the shares assumed to be converted at the beginning of the period. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per common share for the three and six months ended June 30, 2023 and 2022 is as follows: For the Three Months For the Three Months Ended June 30, 2022 For the Six Months For the Six Months Numerator: Net loss $ ( 8,090,720 ) $ ( 2,667,036 ) $ ( 24,371,426 ) $ ( 11,846,040 ) Denominator: Basic: Weighted average shares of common stock outstanding 24,462,895 15,273,707 22,765,268 14,794,637 Diluted: Weighted average shares of common stock outstanding 24,462,895 15,273,707 22,765,268 14,794,637 Effect of potentially dilutive shares (1) — 2,407,693 — 1,577,900 Total weighted average shares of common stock and potentially dilutive shares 24,462,895 17,681,400 22,765,268 16,372,537 Net loss per common share: Basic: Net loss applicable to common stockholders $ ( 8,090,720 ) $ ( 2,667,036 ) $ ( 24,371,426 ) $ ( 11,846,040 ) Weighted average shares of stock outstanding, basic 24,462,895 15,273,707 22,765,268 14,794,637 Basic net loss per common share $ ( 0.33 ) $ ( 0.17 ) $ ( 1.07 ) $ ( 0.80 ) Diluted: Net loss applicable to common shareholders, diluted (1) $ ( 8,090,720 ) $ ( 5,308,236 ) $ ( 24,371,426 ) $ ( 13,524,840 ) Weighted average shares of stock outstanding, diluted 24,462,895 17,681,400 22,765,268 16,372,537 Diluted net loss per common share $ ( 0.33 ) $ ( 0.30 ) $ ( 1.07 ) $ ( 0.83 ) (1) In calculating diluted net loss per share, we excluded the impact of changes in the fair value of the Marathon Convertible Notes of $ 2.6 million and $ 1.7 million for the three and six months ended June 30, 2022, respectively. The 2,407,693 shares and 1,577,900 shares for the three and six months ended June 30, 2022, respectively are the weighted average shares associated with the original principal amount of the Marathon Convertible Notes and the shares that may be issuable upon the conversion of accrued interest owed at the beginning of the period. As of June 30, 2023 and 2022, the number of shares of common stock underlying potentially dilutive securities excluded from the calculation of diluted net loss per share, because the company’s net loss meant that their inclusion would have been antidilutive for those periods, consist of: June 30, 2023 2022 Options to purchase common stock 3,055,256 2,850,787 Shares associated with Marathon Convertible Note 2,400,000 — March 2023 Offering warrants 2,920,306 — SWK Warrants 1,000,000 150,000 Total 9,375,562 3,000,787 The application of the “if-converted” method to the 2.4 million shares associated with the Secured Convertible Notes, as of the beginning of the period, was not applicable for the three and six months ended June 30, 2023 because to do so would have been antidilutive. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity The Company had an accumulated deficit of $ 165.1 million and cash and cash equivalents of $ 1.6 million as of June 30, 2023. Net cash used in operating activities was $ 14.5 million and $ 12.9 million for the six months ended June 30, 2023 and 2022, respectively. On November 9, 2018, the Company entered into a sales agreement with Roth Capital Partners, LLC, and on March 18, 2020, an amended and restated sales agreement was entered into with JonesTrading Institutional Services LLC and Roth Capital Partners, LLC. The agreement provides a facility for the offer and sale of shares of common stock from time to time having an aggregate offering price of up to $ 50.0 million depending upon market demand, in transactions deemed to be an at-the-market (“ATM”) offering. The Company has no obligation to sell any shares of common stock pursuant to the agreement and may at any time suspend sales pursuant to the agreement. Each party may terminate the agreement at any time without liability. During the six months ended June 30, 2023, the Company sold 1,919,140 shares of common stock through its ATM facility at a gross sale price of $ 2.3290 per share, for proceeds of $ 4.5 million . Proceeds, net of $ 0.2 million of fees and offering costs, were $ 4.3 million . As of June 30, 2023, $ 29.0 million remained available under the Company’s ATM facility, subject to various limitations. In connection with the March 2023 Offering (defined below), the Company suspended the ATM facility and entered into a related restriction (see Note 9), prohibiting the Company from entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of common stock or securities convertible or exercisable into common stock, subject to certain exceptions, until April 24, 2023. The Company resumed its ATM activity after April 24, 2023 and, during the balance of the second quarter of 2023, the Company sold 456,886 shares of common stock through its ATM facility at a gross sale price of $ 0.7912 per share, for proceeds of $ 0.4 million. Proceeds, net of $ 14 thousand of fees and offering costs, were $ 0.3 million. On April 30, 2020, the Company entered into an equity line purchase agreement and registration rights agreement pursuant to which Lincoln Park committed to purchase up to $ 15.0 million of the Company’s common stock. During the year ended December 31, 2022 , the Company sold 772,057 shares of common stock under its purchase agreement with Lincoln Park at a weighted average gross sale price of $ 1.42 per share, resulting in proceeds of $ 1.1 million. The Lincoln Park facility was completed on December 30, 2022 and is now terminated. On January 25, 2021, the Company entered into an option agreement (the “Option Agreement”) with Relief, pursuant to which the Company granted Relief an exclusive option (the “Exclusivity Option”) to pursue a potential collaboration and license arrangement with the Company, and then on March 19, 2021, the Company entered into the Collaboration Agreement with Relief providing for the development and commercialization of OLPRUVA TM for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD. The Company received a $ 10.0 million cash payment from Relief (consisting of a $ 14.0 million “Reimbursement Payment” from Relief to the Company offset by payment of a $ 4.0 million Promissory Note drawn in connection with the Option Agreement, plus interest earned through the date of the Collaboration Agreement) and Relief released its security interest in all of the Company’s assets, pursuant to the Promissory Note. Additionally, under the terms of the Collaboration Agreement, the Company received an additional $ 20.0 million for U.S. development and commercial launch costs for the UCDs and MSUD indications (the “Development Payments”). Further, the Company retained development and commercialization rights in the U.S., Canada, Brazil, Turkey, and Japan (“Acer Territory”). The companies will split net profits from the Acer Territory 60 %:40% in favor of Relief. Relief licensed the rights for the rest of the world (“Relief Territory”), where the Company will receive from Relief a 15 % royalty on all net sales received in the Relief Territory. The Company could also receive a total of $ 6.0 million in milestone payments based on the first European marketing approvals of OLPRUVA TM for a UCD and MSUD. The terms of the Collaboration Agreement and Option Agreement are further described below in the Revenue Recognition and Accounting for Collaboration Agreements section of Note 2, Significant Accounting Policies. On March 4, 2022, the Company entered into a Credit Agreement (the “SWK Credit Agreement”) with the lenders party thereto and SWK Funding LLC (“SWK”), as the agent, sole lead arranger and sole bookrunner, which provided for a senior secured term loan facility in an aggregate amount of $ 6.5 million in a single borrowing (the “Original Term Loan”). The Original Term Loan funding closed on March 14, 2022. The proceeds of the Original Term Loan were used to pay fees, costs and expenses related to the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement (as defined and described below) and the Marathon Credit Agreement (as defined and described below) and for other working capital and general corporate purposes. On August 19, 2022, the Company entered into an amendment (the “First Amendment”) to the SWK Credit Agreement, which among other provisions revised the Company’s required minimum amount of unencumbered liquid assets under the Original Term Loan. On January 30, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the SWK Credit Agreement. In addition to other provisions, the Second Amendment provided for an additional senior secured term loan to be made to the Company in an aggregate amount of $ 7.0 million in a single borrowing which funded on January 31, 2023 (the “Second Term Loan”, and together with the Original Term Loan, the “SWK Loans”). On May 12, 2023, the Company entered into a Third Amendment (the “Third Amendment”) to the SWK Credit Agreement. In addition to other provisions, the Third Amendment provides for (i) a temporary reduction in the minimum amount of unencumbered liquid assets required to be maintained by the Company (from $ 3.0 million to $ 1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $ 1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $ 0.5 .million, (ii) the ability for the Company to forego a $ 0.6 million amortization payment otherwise due on May 15, 2023, and at the discretion of SWK (which was exercised) a second $ 0.6 million amortization payment otherwise due on June 15, 2023, and (iii) the ability for the Company to defer until July 15, 2023 half of the $ 0.5 million quarterly interest payment otherwise due on May 15, 2023). The SWK Loans made under the SWK Credit Agreement as amended through the Third Amendment (the “Current SWK Credit Agreement”) bear interest at an annual rate of the sum of (i) 3-month SOFR, subject to a 1 % floor, plus (ii) a margin of 11 %, with such interest payable quarterly in arrears. In the event of default, the interest rate will increase by 3 % per annum over the contract rate effective at the time of default but shall not be higher than the maximum rate permitted to be charged by applicable laws. Due to topline results announced in March 2023 from the Company’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause, which showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women, the principal amount of the SWK Loans amortizes at a monthly rate of $ 0.6 million (as opposed to $ 1.3 million quarterly prior to the announcement of such topline results), although the Third Amendment allowed the Company to forgo the amortization payment otherwise due on May 15, 2023 , and at the discretion of SWK (which was exercised) a second amortization payment otherwise due on June 15, 2023. The final maturity date of the SWK Loans is March 4, 2024 . The Company has the option to prepay the SWK Loans in whole or in part. Upon the repayment of the Original Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid to SWK under the Current SWK Credit Agreement on or prior to the prepayment date) equal to 1.5 times the outstanding principal amount of the Original Term Loan, plus any and all payment-in-kind interest amounts. Upon the repayment of the Second Term Loan (whether voluntary or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid in cash to SWK under the Current SWK Credit Agreement with respect to the Second Term Loan) equal to the outstanding principal amount of the Second Term Loan (inclusive of payment-in-kind interest amounts) multiplied by: (i) if the repayment occurs prior to May 16, 2023, 1.28667 , (ii) if the repayment occurs on or after May 16, 2023 but prior to June 16, 2023, 1.39334 , and (iii) if the repayment occurs on or after July 16, 2023, 1.5 . Due to topline results announced in March 2023 from the Company’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment fo r moderate to severe VMS associated with menopause, the Company is required to maintain for purposes of the SWK Loans unencumbered liquid assets of not less than the lesser of (x) the outstanding principal amount of the SWK Loans or (y) $ 3.0 million (as opposed to $ 1.5 million for clause (y) prior to the announcement of such topline results), although the Third Amendment provides for a temporary reduction in the minimum amount of unencumbered liquid assets required to be maintained by the Company under clause (y) (from $ 3.0 million to $ 1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $ 1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $ 0.5 million). The SWK Loans are secured by a first priority lien on all assets of the Company and any of its future subsidiaries pursuant to a Guarantee and Collateral Agreement entered into on March 4, 2022, between the Company and SWK, as agent (the “SWK Security Agreement”). The Current SWK Credit Agreement contains customary representations and warranties and affirmative and negative covenants. The Company paid to SWK $ 0.1 million in origination fees on the date on which the Original Term Loan was funded. In connection with the execution of the SWK Credit Agreement, the Company issued a warrant (the “First SWK Warrant”) to purchase 150,000 shares of the Company’s common stock at an exercise price of $ 2.46 per share. In connection with the execution of the First Amendment, the Company issued to SWK an additional warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $ 1.51 per share (such warrant, the "Second SWK Warrant"). In connection with the execution of the Second Amendment, the Company issued to SWK an additional warrant to purchase 250,000 shares of the Company’s common stock at an exercise price of $ 2.39 per share (such warrant, the “Third SWK Warrant” and, together with the First SWK Warrant and Second SWK Warrant, the "SWK Warrants"). SWK may exercise the SWK Warrants in accordance with the terms thereof for all or any part of such shares of common stock from the date on which the Original Term Loan was funded or such SWK Warrant was issued, as applicable, until and including March 4, 2029. On June 16, 2023, SWK sold the SWK Loans to Nantahala Capital Management, LLC (“Nantahala”). In connection with the sale of the SWK Loans there were no changes to any of the contractual provisions of the loans; however, the Company (i) issued to SWK an additional warrant (the "Fourth SWK Warrant") to purchase 500,000 shares of the Company’s common stock at an exercise price of $ 1.00 , which expires on June 16, 2030 , with other terms and conditions being the same as the Third SWK Warrant, and (ii) has benefited from waivers/reductions provided by Nantahala with respect to the minimum amount of unencumbered liquid assets required to be maintained by the Company pursuant to the SWK Loans. The Company determined that due to its deemed participation in the transfer of the SWK Loans by way of issuing the Fourth SWK Warrant, it should account for the transfer as an extinguishment of debt. Since there were no changes to the underlying contractual provisions of each loan as part of such transfer, there was no difference in fair value at the point of transfer of the SWK Loans. However, the Fourth SWK Warrant, valued at $ 0.4 million based on a Black-Scholes calculation, was recorded as a loss on extinguishment. On March 4, 2022, the Company also entered into a Marathon Convertible Note Purchase Agreement with MAM Aardvark, LLC (“Marathon”) and Marathon Healthcare Finance Fund, L.P. (“Marathon Fund” and together with “Marathon” each a “Holder” and collectively the “Holders”) (the “Marathon Convertible Note Purchase Agreement”) pursuant to which the Company issued and sold to the Holders secured convertible notes (the “Marathon Convertible Notes”) in an aggregate amount of up to $ 6.0 million (the “Convertible Note Financing”). The Convertible Note Financing closed on March 14, 2022. The proceeds of the Convertible Note Financing were used to pay fees, costs and expenses related to the SWK Credit Agreement, the Marathon Convertible Note Purchase Agreement and the Marathon Credit Agreement and for other working capital and general corporate purposes. On January 30, 2023, the Company entered into an Amendment Agreement (the “Marathon Amendment Agreement”) with Marathon and Marathon Fund with respect to the Marathon Convertible Notes. The Marathon Convertible Notes bear interest at an annual rate of 6.5 %, with such interest payable quarterly ; provided, however, that each of the Holders have agreed to defer payment by the Company of accrued and unpaid interest on their respective Marathon Convertible Note existing on the date of the Marathon Amendment Agreement through March 31, 2023, with such deferred interest, together with any accrued and unpaid interest on each Marathon Convertible Note incurred after March 31, 2023, to be due and payable in cash by the Company on April 15, 2023. Subject to the restrictions set forth in a subordination agreement among each of the Holders and SWK, as agent and lender, the Company is required to repurchase each Marat hon Convertible Note, on or before the fifth (5th) business day (but with five ( 5 ) business days’ notice) following the earlier of June 15, 2023 or the Company’s receipt of gross proceeds of at least $ 40.0 million from the issuance or sale of equity, debt and/or hybrid securities, loans or other financing on a cumulative basis since January 1, 2023 (excluding the Second Term Loan), at a price equal to 200 % (the “Buy-Out Percentage”) of the outstanding principal amount of such Marathon Convertible Note, plus any accrued but unpaid interest thereon to the date of such repurchase, plus 2500 basis points for each 90-day period after April 15, 2023, pro-rated for the actual number of days elapsed in the 90-day period before repurchase actually occurs (for example, if the repurchase occurred on May 30, 2023, the Buy-Out Percentage would have been increased to 212.5 %); provided, that if the Company is prohibited from effectuating such repurchases pursuant to a subordination agreement with SWK, the Company shall cause the repurchase to occur on or before the fifth (5th) business day following the earlier of such prohibition being no longer applicable or the payment in full of all senior indebtedness described in such subordination agreement, but with five ( 5 ) business days’ notice. Each of the Holders also has the right to convert all or any portion of the outstanding principal amount plus any accrued but unpaid interest under the Marathon Convertible Note held by such Holder into shares of common stock at a conversion price of $ 2.50 per share, subject to adjustment. Each Holder has certain rights with respect to the registration by the Company for resale of the shares of common stock issuable upon conversion of the Marathon Convertible Note held by such Holder which are forth in the Marathon Convertible Note Purchase Agreement. Any outstanding principal, together with all accrued and unpaid interest, will be payable on the earlier of the third anniversary of the date of issuance, or upon a change of control of the Company. Pursuant to the Marathon Convertible Note Purchase Agreement, the Marathon Convertible Notes are secured by a lien on collateral representing substantially all assets of the Company, although such security interest is subordinated to the Company’s obligations under the Current SWK Credit Agreement. On March 4, 2022, the Company also entered into a Credit Agreement (the “Marathon Credit Agreement”) with the lenders party thereto and Marathon, as the agent, sole lead arranger and sole bookrunner, which provided for a senior secured term loan facility in an aggregate amount of up to $ 42.5 million in a single borrowing (the “Term Loan”). The Term Loan was available to be borrowed only following full FDA approval for marketing of OLPRUVA TM and until December 31, 2022. The Company received approval for its NDA for OLPRUVA TM on December 22, 2022, and the Company and Marathon agreed to an Extension Agreement with respect to the Term Loan on December 30, 2022, which extended the commitment date for funding the Term Loan to January 16, 2023. The Company elected to terminate the Marathon Credit Agreement by entering into a Termination Agreement on January 30, 2023 , which terminated the Credit Agreement and the associated Royalty Agreement. See Note 6, Debt for further discussion of the status of the Marathon Convertible Notes, and the Marathon Credit Agreement. On March 21, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional accredited investor (the “Purchaser”) pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering, an aggregate of 2,335,000 shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share (“Common Stock”), and pre-funded warrants to purchase up to 585,306 shares of Common Stock (the “Pre-Funded Warrants”) at an exercise price of $ 0.001 per share, and (ii) in a concurrent private placement, warrants to purchase up to 2,920,306 shares of Common Stock (the “Common Warrants”) at an exercise price of $ 0.791 per share. Such registered direct offering and concurrent private placement are referred to herein as the “March 2023 Offering.” The combined purchase price for one Share and one Common Warrant was $ 0.916 , and the combined purchase price for one Pre-Funded Warrant and one Common Warrant was $ 0.915 . The March 2023 Offering was priced at-the-market under Nasdaq rules. The Company received aggregate gross proceeds from the Offering of approximately $ 2.7 million before deducting the placement agent fee and related offering expenses, resulting in net proceeds of approximately $ 2.3 million. The March 2023 Offering closed on March 24, 2023. See Note 9, Stockholders' Deficit for further discussion of the March 2023 Offering. The Nasdaq Capital Market’s continued listing standards for the Company’s common stock require, among other things, that the Company maintain either (i) stockholders’ equity of $ 2.5 million, (ii) market value of listed securities ("MVLS") of $ 35 million or (iii) net income from continuing operations of $ 500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years. On May 3, 2023, the Company received a letter from the listing qualifications department staff of Nasdaq indicating that for the last 30 consecutive business days, the Company’s minimum MVLS was below the minimum of $ 35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(b)(2). In accordance with Nasdaq listing rules, the Company has 180 calendar days, or until October 30, 2023, to regain compliance with respect to the Company’s minimum MVLS. In addition, pursuant to Nasdaq Listing Rules, the Company is required to maintain a minimum bid price of $ 1.00 per share for continued listing on Nasdaq. On June 5, 2023, the Company received another letter from the listing qualifications department staff of Nasdaq indicating that the Company is not in compliance with the $ 1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(a)(2). In accordance with Nasdaq listing rules, the Company has 180 calendar days, or until December 4, 2023, to regain compliance with respect to the minimum bid price requirement (i.e., the closing bid price of the Company’s common stock must meet or exceed $ 1.00 per share for a minimum of ten consecutive business days during the compliance period ending December 4, 2023). If the Company fails to regain compliance with the minimum bid price requirement by December 4, 2023, the Company could be eligible for an additional 180-day compliance period to demonstrate compliance with the minimum bid price requirement. In order to qualify for such additional period, however, the Company will be required to meet the continued listing requirement for minimum MVLS and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. There can be no assurance that the Company will be able to maintain compliance with Nasdaq listing standards. The Company’s failure to meet or to continue to meet these requirements could result in the Company’s common stock being delisted from the Nasdaq Capital Market. If the Company’s common stock were delisted from the Nasdaq Capital Market, among other things, this could result in a number of negative implications, including reduced market price and liquidity of the Company’s common stock as a result of the loss of market efficiencies associated with the Nasdaq, the loss of federal preemption of state securities laws, as well as the potential loss of confidence by suppliers, partners, employees and institutional investor interest, fewer business development opportunities, greater difficulty in obtaining financing and breaches of or events of default under certain contractual obligations (including an event of default under the loan agreement for the Marathon Convertible Notes). Management expects to continue to finance operations through the issuance of additional equity or debt securities, non-dilutive funding, and/or through strategic collaborations. Any transactions which occur may contain covenants that restrict the ability of management to operate the business and any securities issued may have rights, preferences, or privileges senior to the Company’s common stock and may dilute the ownership of current stockholders of the Company. The Company believes that its existing cash and cash equivalents at June 30, 2023 will be sufficient to fund its anticipated operating and capital re quirements through the middle of the third quarter of 2023. |
Going Concern | Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”), which contemplate continuation of the Company as a going concern. The Company has incurred recurring losses from operations, negative cash flows from operations, has a net working capital deficiency, has a net capital deficiency, and has minimum unencumbered liquid assets requirements under its Current SWK Credit Agreement. While the Company has received approval for its OLPRUVA TM product, the Company has yet to receive commercial product revenues and, as such, has been dependent on funding operations through the sale of equity securities, through a collaboration agreement, and through debt instruments. Since inception, the Company has experienced significant losses and incurred negative cash flows from operations. The Company has spent, and expects to continue to spend, a substantial amount of funds in connection with implementing its business strategy, including its planned product development efforts and potential precommercial and commercial activities. As of June 30, 2023, the Company had cash and cash equivalents of $ 1.6 million and current liabilities of $ 43.4 million , which include $ 0.2 million associated with deferred collaboration funding (see Revenue Recognition and Accounting for Collaboration Agreements below in Note 2, Significant Accounting Policies). The Company believes that its existing cash and cash equivalents at June 30, 2023 will be sufficient to fund its anticipated operating and capital requirements through the middle of the third quarter of 2023. The Company will need to raise additional capital to fund continued operations beyond the middle of the third quarter of 2023. The Company may not be successful in its efforts to raise additional funds or achieve profitable operations. The Company continues to explore potential opportunities and alternatives to obtain the additional resources that will be necessary to support its ongoing operations beyond the middle of the third quarter of 2023, including raising additional capital through either private or public equity or debt financing, or additional program collaborations or non-dilutive funding, as well as using its ATM facility which had $ 29.0 million available as of June 30, 2023. Due to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $ 75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period, the Company is only able to issue a limited number of shares under its ATM facility. From May 19, 2020 through June 30, 2023, the Company has raised gross proceeds of $ 21.0 million from the ATM facility and gross proceeds of $ 4.0 million from the agreement with Lincoln Park, which equity line facility was completed on December 30, 2022 and is now terminated. If the Company is unable to obtain additional funding to support its current or proposed activities and operations, it may not be able to continue its operations as currently anticipated, which may require it to suspend or terminate any ongoing development activities, modify its business plan, curtail various aspects of its operations, cease operations, or seek relief under applicable bankruptcy laws. In such event, the Company’s stockholders may lose a substantial portion or even all of their investment. These factors individually and collectively raise substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the date these financial statements are available, or August 14, 2024. The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. |
Use of Estimates | Use of Estimates The Company’s accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. From time to time, estimates having relatively higher significance include determination of stand-alone selling price and variable consideration estimates for purposes of measuring collaboration funding, revenue recognition, deferred collaboration funding, stock-based compensation, inputs to fair value for debt, contract manufacturing and clinical trial accruals, and income taxes. Actual results could differ from those estimates and changes in estimates may occur. |
Revenue Recognition and Accounting for Collaboration Agreements | Revenue Recognition and Accounting for Collaboration Agreements The Company’s revenue and collaboration funding are generated from a single collaboration agreement which included the sale of a license of intellectual property. The Company analyzes its collaboration agreements to assess whether they are within the scope of ASC Topic 808, Collaborative Arrangements , (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement between the Company and the collaboration partner are within the scope of other accounting literature. If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, the Company accounts for those aspects of the arrangement within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). If the Company concludes that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, the Company recognizes the Company’s share of the allocation of the shared costs incurred with respect to the jointly conducted activities as a component of the related expense in the period incurred. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. If the Company concludes a counter-party to a transaction is not a customer or otherwise not within the scope of ASC 606 or ASC 808, the Company considers the guidance in other accounting literature as applicable or by analogy to account for such transaction. The Company determines the units of account within the collaborative arrangement utilizing the guidance in ASC 606 to determine which promised goods or services are distinct. In order for a promised good or service to be considered “distinct” under ASC 606, the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). For any units of account that fall within the scope of ASC 606, where the other party is a customer, the Company evaluates the separate performance obligation(s) under each contract, determines the transaction price, allocates the transaction price to each performance obligation considering the estimated stand-alone selling prices of the services and recognizes revenue upon the satisfaction of such obligations at a point in time or over time dependent on the satisfaction of one of the following criteria: (1) the customer simultaneously receives and consumes the economic benefits provided by the vendor’s performance; (2) the vendor creates or enhances an asset controlled by the customer; and (3) the vendor’s performance does not create an asset for which the vendor has an alternative use and the vendor has an enforceable right to payment for performance completed to date. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property is recognized only when (or as) the later of the following events occurs: (i) the subsequent sale or usage occurs; or (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). On January 25, 2021, the Company entered into the Option Agreement with Relief pursuant to which the Company granted Relief the Exclusivity Option to pursue a potential collaboration and license arrangement with the Company, and then on March 19, 2021, the Company entered into the Collaboration Agreement with Relief providing for the development and commercialization of OLPRUVA TM for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD. The Company received a $ 10.0 million cash payment from Relief (consisting of a $ 14.0 million “Reimbursement Payment” from Relief to the Company, offset by repayment of a $ 4.0 million Promissory Note drawn in connection with the Option Agreement, plus interest earned through the date of the Collaboration Agreement), and Relief released its security interest in all of the Company’s assets pursuant to the Promissory Note. Under the terms of the Collaboration Agreement, Relief committed to pay the Company up to an additional $ 20.0 million for U.S. development and commercial launch costs for the UCDs and MSUD indications. During the year ended December 31, 2021, the Company received from Relief the $ 10.0 million First Development Payment and the additional $ 10.0 million Second Development Payment conditioned upon the FDA’s acceptance of an NDA for OLPRUVA TM in a UCD for filing and review, which acceptance was received on October 4, 2021. On October 6, 2021, the Company entered into a Waiver and Agreement with Relief to amend the timing for the Second Development Payment. The Company received the Second Development Payment in two $ 5.0 million tranches on each of October 12, 2021 and January 14, 2022. Further, the Company retained development and commercialization rights in the U.S., Canada, Brazil, Turkey and Japan (“Acer Territory”). The companies will split net profits from the Acer Territory 60 %:40% in favor of Relief. Relief licensed the rights for the rest of the world (“Relief Territory”), where the Company will receive from Relief a 15 % royalty on all net sales received in the Relief Territory. The Company could also receive a total of $ 6.0 million in milestone payments based on the first European (EU) marketing approvals for a UCD and MSUD. The Company assessed these agreements in accordance with the authoritative literature and concluded that they meet the definition of a collaborative arrangement per ASC 808. For certain parts of the Collaboration Agreement, the Company concluded that Relief represented a customer while, for other parts of the Collaboration Agreement, Relief did not represent a customer. The units of account of the Collaboration Agreement where Relief does not represent a customer are outside of the scope of ASC 606. The Company also determined that the development and commercialization services and Relief’s right to 60 % profit in the Acer Territory is within the scope of ASC Topic 730, Research and Development (“ASC 730”), with regard to funded research and development arrangements. The Company concluded the promised goods and services contained in the Collaboration Agreement, represented two distinct units of account consisting of a license in the Relief Territory, and a combined promise for the development and commercialization of OLPRUVA TM in the Acer Territory and the payment of 60 % net profit from that territory (together, the “Services”). The stand-alone selling price was estimated for each distinct unit of account utilizing an estimate of discounted cashflows associated with each. The Company determined that the transaction price at the outset of the Collaboration Agreement was $ 25.0 million, including the Option Fee of $ 1.0 million, the Reimbursement Payment of $ 14.0 million, and the First Development Payment of $ 10.0 million. The Company concluded that consistent with the evaluation of variable consideration, using the most likely amount approach, the Second Development Payment as well as the milestone payments for EU marketing approvals, should be fully constrained until the contingency associated with each payment has been resolved and the Company’s NDA is accepted for review by the FDA, and Relief receives EU marketing approval, respectively. The contingency associated with the Second Development Payment was resolved in the fourth quarter of 2021. Since ASC 808 does not provide recognition and measurement guidance for collaborative arrangements, the Company applied the principles of ASC 606 for those units of account where Relief is a customer and ASC 730-20 for the funded research and development activities. The license revenue was recognized at the point where the Company determined control was transferred to the customer. The combined unit of account for the Services associated with the allocation of the initial transaction price will be recognized over the service period through the anticipated date of first commercial sale of the OLPRUVA TM approved product in the U.S. The Company also determined that the Services associated with the allocation of the initial transaction price would be satisfied over time as measured using actual costs as incurred by the Company toward the identified development and commercialization services agreed to between the parties up to the point of first commercial sale of the OLPRUVA TM product. Research and development expenses and general and administrative expenses, as they relate to activities governed by the Collaboration Agreement, incurred in satisfying the Services unit-of-account will be recognized as contra-expense within their respective categories, consistent with the presentation guidance in ASC Topic 730. Any amounts recorded as deferred collaboration funding liability which are not recognized as contra-expense at the date of first commercial sale will be classified as contra-royalty and recognized against amounts of net-profit royalty payments recognized by the Company over the term of the agreement between the parties, estimated to be approximately thirteen years beginning in 2023. The Company recognizes a receivable under the Collaboration Agreement when the consideration to be received is deemed unconditional, or when only the passage of time is required before payment of that consideration is due. Amounts receivable under the Collaboration Agreement plus payments received from Relief, net of the amounts recorded as license revenue and as offsets to research and development expenses and to general and administrative expenses, are reported as deferred collaboration funding. At June 30, 2023, the amount of deferred collaboration funding associated with unsatisfied promises under the Collaboration Agreement amounted to $ 4.5 million . The Company has recorded $ 0.2 million as a current liability. $ 4.3 million is recorded as a non-current liability and represents the estimated amount that would be taken against future net profit payments made to Relief should they occur. The Company has recognized deferred collaboration funding as it incurred expenses associated with performing the Services up to the date of first commercial sale in the Acer Territory. The offset to future net profit royalties will be recognized straight line beginning in the first quarter in which the Company is able to generate net profit on the OLPRUVA TM product and through the end of the effective date of the Collaboration Agreement. At June 30, 2023 , deferred collaboration funding was composed of $ 35.0 million received from Relief, offset by $ 1.3 million recognized as license revenue during the year ended December 31, 2021 and $ 15.2 million recorded as an offset to research and development expenses and $ 14.0 million recorded as an offset to general and administrative expenses subsequent to signing the Collaboration Agreement and through the date of this report. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 . At June 30, 2023 and December 31, 2022, the Company had $ 1.3 million and $ 2.1 million , respectively, in excess of the FDIC insured limit. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. Financial instruments consist of cash equivalents, collaboration receivable, accounts payable, accrued expenses, and debt instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature, except for cash equivalents and debt instruments, which were marked to market at the end of each reporting period. See Note 7 for additional information on the fair value of the debt liabilities. The Company elected the fair value option for both its Original Term Loan and its Marathon Convertible Notes dated March 14, 2022. The Company also elected the fair value option for the Second Term Loan (see Note 7). The Company was not required to change its fair value option in connection with the sale of the SWK Loans by SWK to Nantahala. The Company adjusts both the Original Term Loan and the Marathon Convertible Notes to fair value through the change in fair value of debt in the accompanying statements of operations. Subsequent unrealized gains and losses on items for which the fair value option is elected are reported in the accompanying statements of operations. |
Clinical Trial and Preclinical Study Expenses | Clinical Trial and Preclinical Study Expenses No material changes in estimates of clinical trial or preclinical study expenses were recognized in either of the three or six months ended June 30, 2023 or 2022 . Accounts payable and accrued expenses include costs associated with preclinical or clinical studies of $ 1.1 million and $ 0.9 million at June 30, 2023 and December 31, 2022 , respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company records stock-based payments at fair value. The measurement date for compensation expense related to awards is generally the date of the grant. The fair value of awards is recognized as an expense in the statement of operations over the requisite service period, which is generally the vesting period. The Company utilizes the simplified method to estimate the expected term of options until such time that it has adequate option granting and exercise history to refine this estimate. The fair value of options is calculated using the Black-Scholes option pricing model. This option valuation model requires the use of assumptions including, among others, the volatility of stock price, the expected term of the option, and the risk-free interest rate. A limited number of option grants are periodically made to non-employee contractors. The following assumptions were used to estimate the fair value of stock options granted during the six months ended June 30, 2023 and 2022 using the Black-Scholes option pricing model: 2023 2022 Risk-free interest rate 4.00 % 1.18 %- 1.83 % Expected life (years) 5.50 - 6.25 6.25 Expected volatility 113.0 % 113.0 %- 115.0 % Dividend rate 0 % 0 % Due to its limited operating history and a limited trading history of its common stock in relation to the life of its standard option grants, the Company estimates the volatility of its stock in consideration of a number of factors including the Company’s available stock price history and the stock price volatility of comparable public companies. The expected term of a stock option granted to employees and directors (including non-employee directors) is based on the average of the contractual term (generally ten years ) and the vesting period. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The Company recognizes forfeitures related to employee stock-based awards as they occur. The risk-free rate for periods within the expected life of the option is based upon the U.S. Treasury yield curve in effect at the time of grant. Option awards are granted at an exercise price equal to the closing market price of the Company’s common stock on the Nasdaq Capital Market on the date of grant. |
Inventory | Inventory The Company values its inventories at the lower-of-cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company classifies its inventory costs as long term, in other assets in its balance sheets, when it expects to utilize the inventory beyond their normal operating cycle. Prior to the regulatory approval of a product candidate, the Company incurs expenses for the manufacture of material that could potentially be available to support the commercial launch of its products upon approval. Until the first reporting period when regulatory approval has been received or is otherwise considered probable and the future economic benefit is expected to be realized, the Company records all such costs as research and development expense. Inventory used in clinical trials is also expensed as research and development expense, when selected for such use. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical manufacturing campaign. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of product sales in the statements of operations and comprehensive loss. The determination of whether inventory costs will be realizable requires the use of estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required. Additionally, the Company’s product is subject to strict quality control and monitoring that it performs throughout the manufacturing process. In the event that certain batches or units of product do not meet quality specifications, the Company will record a charge to cost of product sales, to write-down any unmarketable inventory to its estimated net realizable value. The components of inventory are summarized as follows: June 30, 2023 December 31, 2022 Raw materials $ 2,899,422 $ — Work in process 1,274,082 — Finished goods 427,114 — Total inventory $ 4,600,618 $ — |
Goodwill | Goodwill Goodwill represents the excess of the purchase price (consideration paid plus net liabilities assumed) of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company’s goodwill is allocated to the Company’s single reporting unit. The Company evaluates the recoverability of goodwill according to ASC Topic 350, Intangibles – Goodwill and Other annually, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill might be impaired. The Company may opt to perform a qualitative assessment or a quantitative impairment test to determine whether goodwill is impaired. If the Company were to determine based on a qualitative assessment that it was more likely than not that the fair value of the reporting unit was less than its carrying value, a quantitative impairment test would then be performed. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than its carrying amount, a goodwill impairment would be recognized for the difference. The Company performed a qualitative analysis of goodwill as of June 21, 2022 as it considered the Complete Response Letter received from the FDA in June 2022 with respect to the Company’s NDA in respect of OLPRUVA TM (sodium phenylbutyrate) for oral suspension for the treatment of patients with UCDs to be a triggering event requiring it to perform that analysis. Management concluded that it was more likely than not that the fair value of the reporting unit was greater than its carrying amount. As of June 30, 2023 and December 31, 2022, the Company's liabilities were in excess of its assets, including goodwill. ASU 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. Accordingly, the Company was not required to perform an evaluation. |
Foreign Currency Transactions Gain/(Loss) | Foreign Currency Transaction Gain/(Loss) Gains and losses arising from transactions and revaluation of balances denominated in currencies other than U.S. dollars are recorded in foreign currency transaction gain/(loss) on the statements of operations. |
Income Taxes | Income Taxes The Company recorded no income tax expense or benefit during the three or six months ended June 30, 2023 and 2022, due to a full valuation allowance recognized against its net deferred tax assets. The Company is primarily subject to U.S. federal and Massachusetts state income taxes. The Company’s tax returns for years 2015 through present are open to tax examinations by U.S. federal and state tax authorities; however, carryforward attributes that were generated prior to January 1, 2015 remain subject to adjustment upon examination if they either have been utilized or will be utilized in a future period. For federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the Company provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are realizable. Utilization of net operating losses may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986, and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization. The tax positions taken or expected to be taken in the course of preparing the Company’s tax returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There were no uncertain tax positions that require accrual or disclosure in the financial statements as of June 30, 2023 and December 31, 2022. The Company’s policy is to recognize interest and penalties related to income tax, if any, in income tax expense. As of June 30, 2023 and December 31, 2022 , the Company had no accruals for interest or penalties related to income tax matters. |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share Basic and diluted net loss per common share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the sum of the weighted average number of common shares outstanding during the period and, in those instances where it would be dilutive, the weighted average number of potential shares of common stock including the assumed exercise of stock options and warrants, the impact of unvested restricted stock, and the potential shares assuming conversion of convertible debt. Basic and diluted shares outstanding are the same for each period presented when all common stock equivalents, including potential shares from convertible debt and warrants, would be antidilutive due to the net losses incurred, except in certain instances as noted below. In certain circumstances the Company includes in both the calculation of basic and diluted net loss per share, the weighted average number of shares associated with a pre-funded warrant because the exercise of such a warrant is virtually assured since the exercise price is nonsubstantive. The two-class method is an earnings allocation formula that treats a participating security, such as a warrant, as having rights to earnings that otherwise would have been available to common stockholders. However, the two-class method does not impact the net loss per share of common stock as the Company has been in a net loss position and while our warrants are considered a participating security, the terms of the warrant agreement does not obligate them to participate in losses. Diluted net income per share is computed using the more dilutive of (a) the two-class method or (b) the if-converted method or treasury stock method, as applicable, to the potentially dilutive instruments. A contract that may be settled in shares and is reported as an asset or liability for accounting purposes may require an adjustment to the numerator for any changes in income or loss that would result if the contract had been reported as an equity instrument for accounting purposes during the period, and doing so is dilutive to the net loss per share calculation (including as a result of the inclusion of underlying shares in the net loss per share calculation). |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13. Financial Instruments-Credit Losses (Topic 326), which requires a financial asset to be presented at amortized cost basis at the net amount expected to be collected and also that credit losses relating to available-for-sale debt securities be recorded through an allowance for credit losses. In November 2019, the FASB issued an amendment making this ASU effective for annual reporting periods beginning after December 15, 2022 for smaller reporting companies. The Company adopted ASU No. 2016-13 in the first quarter of 2023 . There was no material impact on the Company’s financial statements or disclosures as a result of the adoption of this guidance. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Estimate Fair Value of Stock Options Granted | The following assumptions were used to estimate the fair value of stock options granted during the six months ended June 30, 2023 and 2022 using the Black-Scholes option pricing model: 2023 2022 Risk-free interest rate 4.00 % 1.18 %- 1.83 % Expected life (years) 5.50 - 6.25 6.25 Expected volatility 113.0 % 113.0 %- 115.0 % Dividend rate 0 % 0 % |
Schedule of Components of Inventory | The components of inventory are summarized as follows: June 30, 2023 December 31, 2022 Raw materials $ 2,899,422 $ — Work in process 1,274,082 — Finished goods 427,114 — Total inventory $ 4,600,618 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at June 30, 2023 and December 31, 2022: June 30, December 31, 2022 Computer hardware and software $ 143,370 $ 142,870 Leasehold improvements 52,887 52,887 Furniture and fixtures 111,603 111,603 Manufacturing equipment — 135,330 Subtotal property and equipment, gross 307,860 442,690 Less accumulated depreciation ( 253,587 ) ( 228,112 ) Property and equipment, net $ 54,273 $ 214,578 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Payable And Accrued Liabilities Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following at June 30, 2023 and December 31, 2022: June 30, December 31, 2022 Accrued employee bonus and vacation $ 2,545,253 $ 2,624,910 Accrued contract manufacturing 1,202,392 42,679 Accrued miscellaneous expenses 211,824 66,039 Accrued accounting, audit, and tax fees 197,618 82,779 Accrued contract research and regulatory consulting 184,002 68,432 Accrued precommercial and commercial costs 140,565 203,016 Accrued license fees 82,165 80,526 Accrued legal fees 79,984 172,945 Accrued consulting 79,552 3,000 Accrued interest 1,480 313,068 Total accrued expenses $ 4,724,835 $ 3,657,394 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Reconciliation of Undiscounted Lease Liabilities to Total Lease Liabilities | The following table reconciles the undiscounted lease liabilities to the total lease liabilities recognized on the unaudited condensed balance sheet as of June 30, 2023: As of June 30, 2023 As of December 31, 2022 2023 52,711 103,925 2024 107,290 107,290 2025 54,579 54,579 Total undiscounted lease liabilities 214,580 265,794 Less effects of discounting ( 8,322 ) ( 16,204 ) Total lease liabilities as of June 30, 2023 $ 206,258 $ 249,590 The Company’s lease liabilities are reported on the unaudited condensed balance sheets as follows: June 30, 2023 December 31, 2022 Other current liabilities $ 105,422 $ 103,925 Other non-current liabilities 100,836 145,665 Total lease liabilities $ 206,258 $ 249,590 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of June 30, 2023. As of June 30, 2023 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Assets: Money Market Funds in Cash Equivalents $ 1,053,416 $ 1,053,416 $ 1,053,416 $ — $ — Liabilities: Debt: Marathon Convertible Notes 13,078,200 13,078,200 — — 13,078,200 SWK Loans 17,986,848 17,986,848 — — 17,986,848 $ 31,065,048 $ 31,065,048 $ — $ — $ 31,065,048 As of December 31, 2022 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Assets: Money Market Funds in Cash Equivalents $ 1,829,218 $ 1,829,218 $ 1,829,218 $ — $ — Liabilities: Debt: Marathon Convertible Notes 6,360,600 6,360,600 — — 6,360,600 SWK Loans 5,567,231 5,567,231 — — 5,567,231 $ 11,927,831 $ 11,927,831 $ — $ — $ 11,927,831 |
Schedule of Change in Fair Value | December 31, 2022 Loan Received Payments Accretion/ Interest Accrued Adjustment to Fair Value Mark to Market June 30, 2023 Marathon Convertible Notes $ 6,360,600 $ — $ ( 409,233 ) $ — $ 7,126,833 (1) $ 13,078,200 SWK Loans 5,567,231 7,000,000 ( 1,189,862 ) — 6,609,479 (2) 17,986,848 $ 11,927,831 $ 7,000,000 $ ( 1,599,095 ) $ — $ 13,736,312 $ 31,065,048 (1) The Adjustment to Fair Value for the Marathon Convertible Notes during the six months ended June 30, 2023 , includes $ 5.0 million of increase in the post-modification cash flows of the instrument, which was recognized as a loss on extinguishment during the period. (2) The Adjustment to Fair Value for the SWK Loans during the six months ended June 30, 2023 , includes $ 2.7 million of increase in the post-modification cash flows of the instrument, which was recognized as a loss on extinguishment during the period. |
Schedule of Change in Fair Value of Pre-Modification And Post-Modification | For the Three Months For the Six Months Activity recorded as change in fair value gain (loss), SWK Loans Loss from change in fair value from December 31, 2022 to date of modification $ — $ ( 299,923 ) Loss from change in fair value from date of modification to June 30, 2023 ( 1,797,294 ) ( 3,599,362 ) Loss from extinguishment of debt related to increase in post-modification cashflows — ( 2,710,194 ) Total change in fair value recognized, SWK Loans ( 1,797,294 ) ( 6,609,479 ) Activity recorded as change in fair value gain (loss), Marathon Convertible Note Gain from change in fair value from December 31, 2022 to date of modification $ — $ 498,600 Loss from change in fair value from date of modification to June 30, 2023 ( 1,686,033 ) ( 2,616,633 ) Loss from extinguishment of debt related to increase in post-modification cashflows — ( 5,008,800 ) Total change in fair value recognized, Marathon Convertible Note ( 1,686,033 ) ( 7,126,833 ) Total change in fair value recognized during the three and six months ended June 30, 2023 $ ( 3,483,327 ) $ ( 13,736,312 ) |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Summary of Option Activity under 2018 Plan, 2013 Plan and 2010 Plan | A summary of option activity under the 2018 Plan, 2013 Plan, and 2010 Plan for the six months ended June 30, 2023 and 2022, is as follows: Year-to-Date Activity Number Weighted Weighted Aggregate Options outstanding at December 31, 2022 2,794,850 $ 6.36 7.4 Granted 630,000 $ 1.67 Cancelled/forfeited ( 369,594 ) $ 4.27 Options outstanding at June 30, 2023 3,055,256 $ 5.65 7.4 $ — Options exercisable at June 30, 2023 1,749,361 $ 8.18 6.3 $ — Year-to-Date Activity Number Weighted Weighted Aggregate Options outstanding at December 31, 2021 1,954,975 $ 8.16 7.8 Granted 958,000 $ 2.33 Cancelled/forfeited ( 62,188 ) $ 4.12 Options outstanding at June 30, 2022 2,850,787 $ 6.29 8.0 $ — Options exercisable at June 30, 2022 1,322,180 $ 9.80 6.6 $ — |
Summary of Stock-Based Compensation Expense | The amount of stock-based compensation expense recorded to research and development expenses and to general and administrative expenses is detailed in table below: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation Research and development $ 83,998 $ 158,880 $ 199,578 $ 299,320 General and administrative 175,905 301,897 345,834 635,554 Total stock-based compensation expense $ 259,903 $ 460,777 $ 545,412 $ 934,874 |
Summary of Warrants Issued | Six Months Ended June 30, 2023 2022 Number Weighted Average Exercise Price Number Weighted Average Exercise Price Outstanding at beginning of the period 250,000 $ 2.08 — $ — Granted during the period 750,000 1.46 150,000 2.46 Outstanding at end of the period 1,000,000 $ 1.62 150,000 $ 2.46 Exercisable at end of the period 1,000,000 $ 1.62 150,000 $ 2.46 Weighted average remaining life 6.4 years 6.8 years Warrants issued in March 2023 Offering Six Months Ended June 30, 2023 Number Weighted Average Exercise Price Outstanding at beginning of the period — $ — Granted during the period 3,505,612 0.66 Exercised during the period ( 585,306 ) — Outstanding at end of the period 2,920,306 $ 0.79 Exercisable at end of the period 2,920,306 $ 0.79 Weighted average remaining life 5.2 years |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Numerator and Denominator used in Calculation of Basic and Diluted Net Loss Per Common Share | A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per common share for the three and six months ended June 30, 2023 and 2022 is as follows: For the Three Months For the Three Months Ended June 30, 2022 For the Six Months For the Six Months Numerator: Net loss $ ( 8,090,720 ) $ ( 2,667,036 ) $ ( 24,371,426 ) $ ( 11,846,040 ) Denominator: Basic: Weighted average shares of common stock outstanding 24,462,895 15,273,707 22,765,268 14,794,637 Diluted: Weighted average shares of common stock outstanding 24,462,895 15,273,707 22,765,268 14,794,637 Effect of potentially dilutive shares (1) — 2,407,693 — 1,577,900 Total weighted average shares of common stock and potentially dilutive shares 24,462,895 17,681,400 22,765,268 16,372,537 Net loss per common share: Basic: Net loss applicable to common stockholders $ ( 8,090,720 ) $ ( 2,667,036 ) $ ( 24,371,426 ) $ ( 11,846,040 ) Weighted average shares of stock outstanding, basic 24,462,895 15,273,707 22,765,268 14,794,637 Basic net loss per common share $ ( 0.33 ) $ ( 0.17 ) $ ( 1.07 ) $ ( 0.80 ) Diluted: Net loss applicable to common shareholders, diluted (1) $ ( 8,090,720 ) $ ( 5,308,236 ) $ ( 24,371,426 ) $ ( 13,524,840 ) Weighted average shares of stock outstanding, diluted 24,462,895 17,681,400 22,765,268 16,372,537 Diluted net loss per common share $ ( 0.33 ) $ ( 0.30 ) $ ( 1.07 ) $ ( 0.83 ) (1) In calculating diluted net loss per share, we excluded the impact of changes in the fair value of the Marathon Convertible Notes of $ 2.6 million and $ 1.7 million for the three and six months ended June 30, 2022, respectively. The 2,407,693 shares and 1,577,900 shares for the three and six months ended June 30, 2022, respectively are the weighted average shares associated with the original principal amount of the Marathon Convertible Notes and the shares that may be issuable upon the conversion of accrued interest owed at the beginning of the period. |
Schedule of Number of Shares of Common Stock Underlying Potentially Dilutive Securities Excluded From Calculation of Diluted Net Loss Per Share | As of June 30, 2023 and 2022, the number of shares of common stock underlying potentially dilutive securities excluded from the calculation of diluted net loss per share, because the company’s net loss meant that their inclusion would have been antidilutive for those periods, consist of: June 30, 2023 2022 Options to purchase common stock 3,055,256 2,850,787 Shares associated with Marathon Convertible Note 2,400,000 — March 2023 Offering warrants 2,920,306 — SWK Warrants 1,000,000 150,000 Total 9,375,562 3,000,787 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 37 Months Ended | |||||||||||||||||||||||
Jul. 15, 2023 | Jun. 16, 2023 | Jun. 15, 2023 | May 30, 2023 | May 15, 2023 | Mar. 21, 2023 | Jan. 30, 2023 | Mar. 14, 2022 | Mar. 04, 2022 | Mar. 19, 2021 | Jan. 25, 2021 | Apr. 30, 2020 | Mar. 18, 2020 | Nov. 09, 2018 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2023 | Jun. 05, 2023 | May 12, 2023 | Jan. 31, 2023 | Dec. 29, 2022 | Aug. 19, 2022 | |
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Accumulated deficit | $ 165,118,695 | $ 140,747,269 | $ 165,118,695 | $ 140,747,269 | $ 165,118,695 | |||||||||||||||||||||||
Cash and cash equivalents | $ 1,553,416 | $ 2,329,218 | 1,553,416 | $ 2,329,218 | $ 1,553,416 | |||||||||||||||||||||||
Net cash used in operating activities | $ (14,522,079) | $ (12,866,087) | ||||||||||||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||
Reimbursement payment | $ 14,000,000 | |||||||||||||||||||||||||||
Development payments | 10,000,000 | |||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (350,000) | $ (8,541,494) | ||||||||||||||||||||||||||
Threshold equity value as per Nasdaq capital market listing standards | 2,500,000 | |||||||||||||||||||||||||||
Threshold market value as per Nasdaq capital market listing standards | 35,000,000 | |||||||||||||||||||||||||||
Threshold net income from continuing operations as per Nasdaq capital market listing standards | $ 500,000 | |||||||||||||||||||||||||||
Threshold number of business days for market value of listed securities | 30 days | |||||||||||||||||||||||||||
Threshold number of calendar days to regain compliance | 180 days | 180 days | ||||||||||||||||||||||||||
Current liabilities | 43,428,348 | $ 18,951,700 | $ 43,428,348 | $ 18,951,700 | $ 43,428,348 | |||||||||||||||||||||||
Deferred collaboration funding, current | 181,888 | 8,412,971 | 181,888 | $ 8,412,971 | 181,888 | |||||||||||||||||||||||
Threshold bid price per share for continued listing on nasdaq | $ 1 | $ 1 | ||||||||||||||||||||||||||
Lincoln Park | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 772,057 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock gross | $ 1,100,000 | 4,000,000 | ||||||||||||||||||||||||||
Collaboration Agreement | Relief Therapeutics Holding AG | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Cash payment received | 10,000,000 | $ 10,000,000 | ||||||||||||||||||||||||||
Repayment of outstanding balance of prior loan and interest | 4,000,000 | $ 4,000,000 | ||||||||||||||||||||||||||
Reimbursement payment | 14,000,000 | $ 14,000,000 | ||||||||||||||||||||||||||
Development payments | $ 20,000,000 | |||||||||||||||||||||||||||
Net profit split ratio based on territory | 60% | 60% | ||||||||||||||||||||||||||
Net profit split ratio | 60%:40% | |||||||||||||||||||||||||||
Percentage of royalty net sales received | 15% | 15% | ||||||||||||||||||||||||||
Milestone payment to be received | $ 6,000,000 | $ 6,000,000 | ||||||||||||||||||||||||||
SWK Credit Agreement | Lenders Party and SWK Funding LLC | SOFR | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, periodic payment, principal | $ 600,000 | $ 1,300,000 | 600,000 | |||||||||||||||||||||||||
SWK Credit Agreement | Bridge Loan | Lenders Party and SWK Funding LLC | If ACER-001 Approval does not Occur on or Before September 30, 2022 | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 150% | |||||||||||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Principal amortization payments | $ 600,000 | $ 600,000 | ||||||||||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,500,000 | $ 3,000,000 | ||||||||||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Repayment Occurs On Or After April 16, 2023 But Prior to May 16, 2023 | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 1.28667% | |||||||||||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Repayment Occurs On Or After May 16, 2023 But Prior to June 16, 2023 | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 1.39334% | |||||||||||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Repayment Occurs On Or After June 16, 2023 | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 1.50% | |||||||||||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Original Term Loan And Swk Loans | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, principal amount | $ 7,000,000 | |||||||||||||||||||||||||||
SWK Credit Agreement | Third Term Loan | Lenders Party and SWK Funding LLC | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Principal amortization payments | $ 600,000 | $ 600,000 | ||||||||||||||||||||||||||
minimum unencumbered liquid assets current requirement | 500,000 | 500,000 | 500,000 | |||||||||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,750,000 | 1,250,000 | 1,250,000 | 1,250,000 | $ 3,000,000 | |||||||||||||||||||||||
SWK Credit Agreement | Third Term Loan | Lenders Party and SWK Funding LLC | Subsequent Event | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Principal amortization payments | $ 500,000 | |||||||||||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK Funding LLC | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, principal amount | $ 6,500,000 | |||||||||||||||||||||||||||
Debt instrument, interest rate, increase | 3% | |||||||||||||||||||||||||||
Origination fees | $ 100,000 | |||||||||||||||||||||||||||
Warrant issued to purchase common stock | 250,000 | 150,000 | 100,000 | |||||||||||||||||||||||||
Warrant, exercise price | $ 2.39 | $ 2.46 | $ 1.51 | |||||||||||||||||||||||||
Loss on extinguishment of debt | $ (2,700,000) | |||||||||||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK Funding LLC | If ACER-001 Approval does not Occur on or Before December 31, 2022 | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2024 | |||||||||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 150% | |||||||||||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK Funding LLC | SOFR | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, interest rate | 1% | |||||||||||||||||||||||||||
Debt instrument, basis spread on variable rate | 11% | |||||||||||||||||||||||||||
Marathon Credit Agreement | Term Loan | Lender Party and Marathon | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, principal amount | $ 42,500,000 | |||||||||||||||||||||||||||
Debt instrument, interest rate | 13.50% | |||||||||||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2028 | |||||||||||||||||||||||||||
Termination agreement date | Jan. 30, 2023 | |||||||||||||||||||||||||||
Marathon Credit Agreement | Marathon Convertible Notes | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Termination agreement date | Jan. 30, 2023 | |||||||||||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Marathon Convertible Notes | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (5,000,000) | |||||||||||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Marathon Convertible Notes | MAM Aardvark, LLC and Marathon Healthcare Finance Fund, L.P. | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, principal amount | $ 6,000,000 | |||||||||||||||||||||||||||
Debt instrument, interest rate | 6.50% | |||||||||||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||||||||||||
Conversion price | $ 2.50 | |||||||||||||||||||||||||||
Number of business days for repurchase of convertible note | 5 days | |||||||||||||||||||||||||||
Increase in Buy-Out percentage | 0.2500 | |||||||||||||||||||||||||||
Number of business days for payment in full of all senior indebtedness | 5 days | |||||||||||||||||||||||||||
Buy-Out percentage | 212.50% | 200% | ||||||||||||||||||||||||||
Securities Purchase Agreement | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 2,335,000 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 2,300,000 | |||||||||||||||||||||||||||
Combined purchase price for one Share and one Common Warrant | $ 0.916 | |||||||||||||||||||||||||||
Combined purchase price for one Pre-Funded Warrant and one Common Warrant | 0.915 | |||||||||||||||||||||||||||
Common stock, par value | $ 0.0001 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock gross | $ 2,700,000 | |||||||||||||||||||||||||||
Minimum | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Threshold number of business days for market value of listed securities | 10 days | |||||||||||||||||||||||||||
Minimum | Marathon Convertible Note Purchase Agreement | Marathon Convertible Notes | MAM Aardvark, LLC and Marathon Healthcare Finance Fund, L.P. | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Gross Proceeds from Issuance or Sale of Equity Debt Hybrid Securities loans or Other Financing | $ 40,000,000 | |||||||||||||||||||||||||||
Weighted Average | Lincoln Park | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Issuance of common stock, gross sale price per share | $ 1.42 | |||||||||||||||||||||||||||
Maximum | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Public float | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | |||||||||||||||||||||||||
Common stock bid price per share | $ 1 | $ 1 | $ 1 | |||||||||||||||||||||||||
Maximum | Lincoln Park | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Shares value might be issued under agreement | $ 15,000,000 | |||||||||||||||||||||||||||
Maximum | Collaboration Agreement | Relief Therapeutics Holding AG | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Development payments | $ 20,000,000 | $ 20,000,000 | ||||||||||||||||||||||||||
Maximum | SWK Credit Agreement | Lenders Party and SWK Funding LLC | SOFR | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Debt instrument, periodic payment, principal | $ 1,300,000 | |||||||||||||||||||||||||||
Pre-Funded Warrants | Securities Purchase Agreement | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Warrant issued to purchase common stock | 585,306 | |||||||||||||||||||||||||||
Warrant, exercise price | $ 0.001 | |||||||||||||||||||||||||||
Common Warrants | Securities Purchase Agreement | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Warrant issued to purchase common stock | 2,920,306 | |||||||||||||||||||||||||||
Warrant, exercise price | $ 0.791 | |||||||||||||||||||||||||||
Fourth SWK Warrant | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Warrant issued to purchase common stock | 500,000 | |||||||||||||||||||||||||||
Warrant, exercise price | $ 1 | |||||||||||||||||||||||||||
Warrants expiration date | Jun. 16, 2030 | |||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (400,000) | |||||||||||||||||||||||||||
At-the-Market Facility | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Remained available under facility | $ 29,000,000 | $ 29,000,000 | $ 29,000,000 | |||||||||||||||||||||||||
Common stock offering costs | $ 14,000 | $ 200,000 | $ 200,000 | $ 200,000 | ||||||||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 456,886 | 1,062,547 | 1,919,140 | 1,062,547 | ||||||||||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 300,000 | $ 3,100,000 | $ 4,300,000 | $ 3,100,000 | ||||||||||||||||||||||||
Proceeds from issuance of common stock gross | 400,000 | $ 3,300,000 | $ 4,500,000 | $ 3,300,000 | $ 21,000,000 | |||||||||||||||||||||||
At-the-Market Facility | Securities Purchase Agreement | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Common stock offering costs | $ 14,000 | |||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 456,886 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 300,000 | |||||||||||||||||||||||||||
Proceeds from issuance of common stock gross | $ 400,000 | |||||||||||||||||||||||||||
At-the-Market Facility | Weighted Average | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Issuance of common stock, gross sale price per share | $ 0.7912 | $ 3.0719 | $ 2.3290 | $ 3.0719 | ||||||||||||||||||||||||
At-the-Market Facility | Weighted Average | Securities Purchase Agreement | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Issuance of common stock, gross sale price per share | $ 0.7912 | |||||||||||||||||||||||||||
At-the-Market Facility | Maximum | ||||||||||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statement [Line Items] | ||||||||||||||||||||||||||||
Aggregate offering price of common stock | $ 50,000,000 | $ 50,000,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Jan. 14, 2022 | Oct. 12, 2021 | Mar. 19, 2021 | Jan. 25, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Oct. 04, 2021 | |
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Reimbursement payment | $ 14,000,000 | ||||||||||
Expected term of stock option granted to employees and directors, average contractual term and vesting period | 10 years | ||||||||||
Collaboration agreement amount | 25,000,000 | ||||||||||
Development payments | 10,000,000 | ||||||||||
Deferred collaboration funding, current | $ 181,888 | $ 181,888 | $ 8,412,971 | ||||||||
Deferred collaboration funding, non-current | 4,365,310 | 4,365,310 | |||||||||
Cash in excess of FDIC insured limit | 1,300,000 | 1,300,000 | 2,100,000 | ||||||||
Income tax expense (benefit) | 0 | $ 0 | 0 | $ 0 | |||||||
Uncertain tax positions, accruals | 0 | 0 | 0 | ||||||||
Accruals for interest or penalties related to income tax matters | $ 0 | $ 0 | 0 | ||||||||
ASU No. 2016-13 | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | true | |||||||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Mar. 31, 2023 | Mar. 31, 2023 | |||||||||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | true | |||||||||
Accounts Payable and Accrued Expenses | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Preclinical or clinical study expense | $ 1,100,000 | $ 1,100,000 | $ 900,000 | ||||||||
Maximum | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Cash, FDIC insured amount | 250,000 | 250,000 | |||||||||
Collaboration Agreement | Second Development Payment | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Deferred collaboration funding | 4,500,000 | 4,500,000 | |||||||||
Deferred collaboration funding, current | 200,000 | 200,000 | |||||||||
Deferred collaboration funding, non-current | 4,300,000 | 4,300,000 | |||||||||
Deferred collaboration funding, cash received | $ 35,000,000 | $ 35,000,000 | |||||||||
Revenue recognized | $ 1,300,000 | ||||||||||
Offset to research and development expenses | 15,200,000 | ||||||||||
Offset to general and administrative expenses | 14,000,000 | ||||||||||
Collaboration Agreement | Relief | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Cash payment received | 10,000,000 | $ 10,000,000 | |||||||||
Reimbursement payment | 14,000,000 | $ 14,000,000 | |||||||||
Repayment of promissory note of prior loan and interest | $ 4,000,000 | ||||||||||
Net profit split ratio based on territory | 60% | 60% | |||||||||
Percentage of royalty net sales received | 15% | 15% | |||||||||
Milestone payment to be received | $ 6,000,000 | $ 6,000,000 | |||||||||
Proceeds from development payments subject to acceptance of new drug application | $ 10,000,000 | ||||||||||
Development and commercialization services and reliefs right of profit percentage | 60% | ||||||||||
Percentage of payment net profit territory | 60% | ||||||||||
Upfront non-refundable payment received | $ 1,000,000 | ||||||||||
Development payments | $ 20,000,000 | ||||||||||
Collaboration Agreement | Relief | Secured Loan | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument, term | 12 months | ||||||||||
Debt instrument, principal amount | $ 4,000,000 | ||||||||||
Debt instrument, interest rate | 6% | ||||||||||
Collaboration Agreement | Relief | Maximum | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Development payments | 20,000,000 | $ 20,000,000 | |||||||||
Waiver and Agreement | Relief | Second Development Payment | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Proceeds from first tranche of development payments subject to new drug application | $ 5,000,000 | ||||||||||
Proceeds from second tranche of development payments subject to new drug application | $ 5,000,000 | ||||||||||
Collaboration and License Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Upfront non-refundable payment received | $ 1,000,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Estimate Fair Value of Stock Options Granted (Details) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule Of Significant Accounting Policies [Line Items] | ||
Risk-free interest rate, minimum | 1.18% | |
Risk-free interest rate, maximum | 1.83% | |
Risk-free interest rate | 4% | |
Expected life (years) | 6 years 3 months | |
Expected volatility, minimum | 113% | |
Expected volatility, maximum | 115% | |
Expected volatility | 113% | |
Dividend rate | 0% | 0% |
Minimum | ||
Schedule Of Significant Accounting Policies [Line Items] | ||
Expected life (years) | 5 years 6 months | |
Maximum | ||
Schedule Of Significant Accounting Policies [Line Items] | ||
Expected life (years) | 6 years 3 months |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of components of Inventory (Details) | Jun. 30, 2023 USD ($) |
Inventory Disclosure [Abstract] | |
Raw materials | $ 2,899,422 |
Work in process | 1,274,082 |
Finished goods | 427,114 |
Total inventory | $ 4,600,618 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Subtotal property and equipment, gross | $ 307,860 | $ 442,690 |
Less accumulated depreciation | (253,587) | (228,112) |
Property and equipment, net | 54,273 | 214,578 |
Computer Hardware and Software | ||
Property Plant And Equipment [Line Items] | ||
Subtotal property and equipment, gross | 143,370 | 142,870 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Subtotal property and equipment, gross | 52,887 | 52,887 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Subtotal property and equipment, gross | $ 111,603 | 111,603 |
Manufacturing Equipment | ||
Property Plant And Equipment [Line Items] | ||
Subtotal property and equipment, gross | $ 135,330 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts Payable And Accrued Liabilities Current [Abstract] | ||
Accrued employee bonus and vacation | $ 2,545,253 | $ 2,624,910 |
Accrued contract manufacturing | 1,202,392 | 42,679 |
Accrued miscellaneous expenses | 211,824 | 66,039 |
Accrued accounting, audit, and tax fees | 197,618 | 82,779 |
Accrued contract research and regulatory consulting | 184,002 | 68,432 |
Accrued precommercial and commercial costs | 140,565 | 203,016 |
Accrued license fees | 82,165 | 80,526 |
Accrued legal fees | 79,984 | 172,945 |
Accrued consulting | 79,552 | 3,000 |
Accrued interest | 1,480 | 313,068 |
Total accrued expenses | $ 4,724,835 | $ 3,657,394 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Lessee Lease Description [Line Items] | |||||
Operating lease right of use asset | $ 200,000 | $ 200,000 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other non-current assets | Other non-current assets | |||
Operating lease liability | $ 206,258 | $ 206,258 | $ 249,590 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities | |||
Operating lease, weighted average remaining lease term | 2 years | 2 years | |||
Operating lease, cash payment made | $ 47,000 | $ 100,000 | $ 100,000 | $ 100,000 | |
Operating lease expense | $ 45,000 | $ 100,000 | $ 100,000 | $ 100,000 | |
Minimum | |||||
Lessee Lease Description [Line Items] | |||||
Operating lease discount rate | 8% | 8% | 8% | ||
Maximum | |||||
Lessee Lease Description [Line Items] | |||||
Operating lease discount rate | 10% | 10% | 10% | ||
Modified Bend Lease | |||||
Lessee Lease Description [Line Items] | |||||
Lease, existence of option to extend | true |
Leases - Reconciliation of Undi
Leases - Reconciliation of Undiscounted Lease Liabilities to Total Lease Liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Undiscounted lease liabilities for years ending December 31,: | ||
2023 | $ 52,711 | $ 103,925 |
2024 | 107,290 | 107,290 |
2025 | 54,579 | 54,579 |
Total undiscounted lease liabilities | 214,580 | 265,794 |
Less effects of discounting | (8,322) | (16,204) |
Total lease liabilities as of September 30, 2022 | 206,258 | 249,590 |
Other current liabilities | $ 105,422 | $ 103,925 |
Operating Lease Liability Current Statement Of Financial Position Extensible List | Other current liabilities | Other current liabilities |
Other non-current liabilities | $ 100,836 | $ 145,665 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities |
Total lease liabilities | $ 206,258 | $ 249,590 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Jul. 15, 2023 | Jun. 22, 2023 | Jun. 16, 2023 | Jun. 15, 2023 | May 30, 2023 | May 15, 2023 | Jan. 30, 2023 | Aug. 19, 2022 | Mar. 14, 2022 | Mar. 04, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | May 12, 2023 | Jan. 31, 2023 | |
Debt Instrument [Line Items] | ||||||||||||||||||||
Cash and cash equivalents | $ 1,553,416 | $ 2,329,218 | $ 1,553,416 | $ 2,329,218 | ||||||||||||||||
Debt issuance costs incurred | 1,200,000 | |||||||||||||||||||
Loss on extinguishment of debt | (350,000) | (8,541,494) | ||||||||||||||||||
Change in fair value of debt instruments gain (loss) | 2,806,538 | $ (4,729,460) | 5,018,223 | $ (3,767,060) | ||||||||||||||||
Cost of debt issuance | $ 200,129 | 577,225 | $ 1,368,194 | |||||||||||||||||
First SWK Warrant | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Proceeds allocated to First SWK Warrant | $ 327,031 | |||||||||||||||||||
Fair value of warrant | 300,000 | 300,000 | ||||||||||||||||||
Third SWK Warrant | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Proceeds allocated to First SWK Warrant | $ 472,500 | |||||||||||||||||||
Cost of debt issuance | 500,000 | |||||||||||||||||||
Fourth SWK Warrant | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Warrant issued to purchase common stock | 500,000 | |||||||||||||||||||
Warrant, exercise price | $ 1 | |||||||||||||||||||
Class of warrant expiration date | Jun. 16, 2030 | |||||||||||||||||||
Loss on extinguishment of debt | $ (400,000) | |||||||||||||||||||
Fourth SWK Warrant | Common Stock | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Warrant issued to purchase common stock | 500,000 | |||||||||||||||||||
Financial Advisor | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt issuance costs incurred | 700,000 | |||||||||||||||||||
SWK and Holders | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt issuance costs incurred | 500,000 | |||||||||||||||||||
Term Loan | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Commitment fee payable | 600,000 | 600,000 | ||||||||||||||||||
Deferred financing costs, current | 400,000 | 400,000 | ||||||||||||||||||
Debt related expense commitment fee | 400,000 | 200,000 | ||||||||||||||||||
Schelling Promissory Note | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Issuance of unsecured subordinated promissory note | $ 1,000,000 | |||||||||||||||||||
Promissory note principal amount accrue interest rate | 6% | |||||||||||||||||||
Principal and accrued interest due and payable maturity date | Aug. 21, 2023 | |||||||||||||||||||
Promissory notes unpaid balance thereafter accrue interest percentage annually | 10% | |||||||||||||||||||
Schelling Promissory Note | Minimum | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Common stock outstanding owners percentage | 10% | |||||||||||||||||||
Original Term Loan | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Fair value of loan | 6,200,000 | 6,200,000 | ||||||||||||||||||
Original Term Loan and Convertible Note Financing | Financial Advisor | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Payment for funding fee for services | $ 500,000 | |||||||||||||||||||
SWK Credit Agreement | Lenders Party and SWK | If ACER-001 Approval does not Occur on or Before December 31, 2022 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2024 | |||||||||||||||||||
SWK Credit Agreement | Lenders Party and SWK Funding LLC | SOFR | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, periodic payment, principal | $ 600,000 | $ 1,300,000 | $ 600,000 | |||||||||||||||||
SWK Credit Agreement | Lenders Party and SWK Funding LLC | SOFR | Maximum | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, periodic payment, principal | 1,300,000 | |||||||||||||||||||
SWK Credit Agreement | Nantahala | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,300,000 | $ 1,300,000 | ||||||||||||||||||
SWK Credit Agreement | Bridge Loan | Lenders Party and SWK Funding LLC | If ACER-001 Approval does not Occur on or Before September 30, 2022 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 150% | |||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, principal amount | $ 6,500,000 | |||||||||||||||||||
Debt instrument, interest rate | 16.30% | 16.30% | ||||||||||||||||||
Debt instrument, interest rate, increase | 3% | |||||||||||||||||||
Debt instrument, maturity date, description | The final maturity date of the Original Term Loan is March 4, 2024 | |||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,500,000 | $ 3,000,000 | ||||||||||||||||||
Principal payments in 2023 | $ 2,100,000 | $ 2,100,000 | ||||||||||||||||||
Origination fees | $ 100,000 | |||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK | If ACER-001 Approval does not Occur on or Before December 31, 2022 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2024 | |||||||||||||||||||
Debt instrument repayment percentage on outstanding principal plus any and all paid-in-kind interest amount | 150% | |||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK | SWK Warrant | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Warrant issued to purchase common stock | 100,000 | 150,000 | ||||||||||||||||||
Warrant, exercise price | $ 1.51 | $ 2.46 | ||||||||||||||||||
Proceeds allocated to First SWK Warrant | $ 100,000 | $ 300,000 | ||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK | LIBOR | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, description of variable rate basis | 3-month LIBOR | |||||||||||||||||||
Debt instrument, interest rate | 1% | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 11% | |||||||||||||||||||
Debt instrument, periodic payment, principal | $ 700,000 | |||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||||
Loan amortization commencing date | Feb. 15, 2023 | |||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK Funding LLC | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, principal amount | $ 6,500,000 | |||||||||||||||||||
Debt instrument, interest rate, increase | 3% | |||||||||||||||||||
Origination fees | $ 100,000 | |||||||||||||||||||
Warrant issued to purchase common stock | 250,000 | 100,000 | 150,000 | |||||||||||||||||
Warrant, exercise price | $ 2.39 | $ 1.51 | $ 2.46 | |||||||||||||||||
Loss on extinguishment of debt | $ (2,700,000) | |||||||||||||||||||
Change in fair value of debt instruments gain (loss) | (300,000) | |||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK Funding LLC | If ACER-001 Approval does not Occur on or Before December 31, 2022 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2024 | |||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 150% | |||||||||||||||||||
SWK Credit Agreement | Original Term Loan | Lenders Party and SWK Funding LLC | SOFR | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, interest rate | 1% | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 11% | |||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,500,000 | 3,000,000 | ||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Original Term Loan And Swk Loans | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, principal amount | $ 7,000,000 | |||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,500,000 | 3,000,000 | ||||||||||||||||||
Principal amortization payments | $ 600,000 | $ 600,000 | ||||||||||||||||||
Change in fair value of debt instruments gain (loss) | $ (1,500,000) | |||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Repayment Occurs On Or After April 16, 2023 But Prior to May 16, 2023 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 1.28667% | |||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Repayment Occurs On Or After May 16, 2023 But Prior to June 16, 2023 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 1.39334% | |||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Repayment Occurs On Or After June 16, 2023 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument repayment percentage on outstanding principal amount | 1.50% | |||||||||||||||||||
SWK Credit Agreement | Second Term Loan | Lenders Party and SWK Funding LLC | Subsequent Event | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Quarterly interest payment due | $ 500,000 | |||||||||||||||||||
SWK Credit Agreement | Third Term Loan | Lenders Party and SWK | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, maturity date, description | The final maturity date of the SWK Loans is March 4, 2024 | |||||||||||||||||||
SWK Credit Agreement | Third Term Loan | Lenders Party and SWK Funding LLC | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Minimum cash balance required by the loan covenants | $ 1,750,000 | 1,250,000 | $ 1,250,000 | $ 3,000,000 | ||||||||||||||||
minimum unencumbered liquid assets current requirement | $ 500,000 | $ 500,000 | ||||||||||||||||||
Principal amortization payments | $ 600,000 | $ 600,000 | ||||||||||||||||||
SWK Credit Agreement | Third Term Loan | Lenders Party and SWK Funding LLC | Subsequent Event | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Principal amortization payments | $ 500,000 | |||||||||||||||||||
Secured Convertible Note Purchase Agreement | Secured Convertible Notes | MAM Aardvark, LLC and Marathon Healthcare Finance Fund, L.P. | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, principal amount | $ 6,000,000 | |||||||||||||||||||
Debt instrument, interest rate | 6.50% | |||||||||||||||||||
Debt instrument, interest rate, increase | 11.50% | |||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||||
Conversion price | $ 2.50 | |||||||||||||||||||
Debt instrument, shares upon conversion of original principal amount | 2,400,000 | |||||||||||||||||||
Marathon Credit Agreement | Marathon Convertible Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Termination agreement date | Jan. 30, 2023 | |||||||||||||||||||
Marathon Credit Agreement | Term Loan | Lender Party and Marathon | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, principal amount | $ 42,500,000 | |||||||||||||||||||
Debt instrument, interest rate | 13.50% | |||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||||
Debt instrument, maturity date, description | The final maturity date of the Term Loan would have been the earlier of six years after the Term Loan Funding Date or December 31, 2028. | |||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2028 | |||||||||||||||||||
Percentage of option to capitalize | 4% | |||||||||||||||||||
Debt instrument amortization percentage | 2.78% | |||||||||||||||||||
Percentage of prepayment, prior to March 4, 2025 | 5% | |||||||||||||||||||
Percentage of prepayment, on or after March 4, 2025, but prior to March 4, 2026 | 3% | |||||||||||||||||||
Percentage of prepayment, on or after March 4, 2026, but prior to March 4, 2027 | 2% | |||||||||||||||||||
Percentage of prepayment, on or after March 4, 2027 | 1% | |||||||||||||||||||
Payment for commitment fees | $ 200,000 | $ 200,000 | ||||||||||||||||||
Payment for additional commitment fees | $ 600,000 | |||||||||||||||||||
Percentage of aggregate revenue as royalty payments | 2% | |||||||||||||||||||
Royalty payments on aggregate revenue cap amount | $ 15,000,000 | |||||||||||||||||||
Termination agreement date | Jan. 30, 2023 | |||||||||||||||||||
Percentage of term loan amount equal to commitment fee | 1.50% | |||||||||||||||||||
Additional amount of accordion commitment | $ 50,000,000 | |||||||||||||||||||
Total commitment | 92,500,000 | |||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Marathon Convertible Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Loss on extinguishment of debt | $ (5,000,000) | |||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Marathon Convertible Notes | MAM Aardvark, LLC and Marathon Healthcare Finance Fund, L.P. | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, principal amount | $ 6,000,000 | |||||||||||||||||||
Debt instrument, interest rate | 6.50% | |||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||||
Conversion price | $ 2.50 | |||||||||||||||||||
Buy-Out percentage | 212.50% | 200% | ||||||||||||||||||
Increase in Buy-Out percentage | 0.2500 | |||||||||||||||||||
Number of business days for repurchase of convertible note | 5 days | |||||||||||||||||||
Number of business days for payment in full of all senior indebtedness | 5 days | |||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Marathon Convertible Notes | MAM Aardvark, LLC and Marathon Healthcare Finance Fund, L.P. | Minimum | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Gross proceeds from issuance or sale of equity, debt and/or hybrid securities, loans or other financing | $ 40,000,000 | |||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Pre-modification Marathon Convertible Note | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Change in fair value of debt instruments gain (loss) | $ 500,000 | |||||||||||||||||||
Marathon Convertible Note Purchase Agreement | Post-modification Marathon Convertible Note | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Change in fair value of debt instruments gain (loss) | $ (900,000) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Level 3 | ||
Debt: | ||
Liabilities, fair value | $ 31,065,048 | $ 11,927,831 |
Marathon Convertible Notes | Level 3 | ||
Debt: | ||
Liabilities, fair value | 13,078,200 | 6,360,600 |
SWK Loans | Level 3 | ||
Debt: | ||
Liabilities, fair value | 17,986,848 | 5,567,231 |
Money Market Funds in Cash Equivalents | Level 1 | ||
Assets: | ||
Assets, fair value | 1,053,416 | 1,829,218 |
Carrying Amount | ||
Debt: | ||
Liabilities, fair value | 31,065,048 | 11,927,831 |
Carrying Amount | Marathon Convertible Notes | ||
Debt: | ||
Liabilities, fair value | 13,078,200 | 6,360,600 |
Carrying Amount | SWK Loans | ||
Debt: | ||
Liabilities, fair value | 17,986,848 | 5,567,231 |
Carrying Amount | Money Market Funds in Cash Equivalents | ||
Assets: | ||
Assets, fair value | 1,053,416 | 1,829,218 |
Fair Value | ||
Debt: | ||
Liabilities, fair value | 31,065,048 | 11,927,831 |
Fair Value | Marathon Convertible Notes | ||
Debt: | ||
Liabilities, fair value | 13,078,200 | 6,360,600 |
Fair Value | SWK Loans | ||
Debt: | ||
Liabilities, fair value | 17,986,848 | 5,567,231 |
Fair Value | Money Market Funds in Cash Equivalents | ||
Assets: | ||
Assets, fair value | $ 1,053,416 | $ 1,829,218 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | |
Pre-modification Marathon Convertible Note | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Changes in fair value | $ 0.5 | ||
Original Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Changes in fair value | $ 0.3 | ||
SWK Loans | Post-modification Origional Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Changes in fair value | 1.8 | $ 2.7 | 3.6 |
Marathon Convertible Notes | Pre-modification Marathon Convertible Note | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Changes in fair value | $ (2.6) | ||
Marathon Convertible Notes | Post-modification Marathon Convertible Note | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Changes in fair value | $ (1.7) | $ 5 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Change in Fair Value of Pre-Modification And Post-Modification (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Change in fair value recognized | $ (3,483,327) | $ (13,736,312) |
SWK Loans | Pre-modification Marathon Convertible Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Gain (Loss) from change in fair value from date of modification | (299,923) | |
SWK Loans | Post-modification Marathon Convertible Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Gain (Loss) from change in fair value from date of modification | (1,797,294) | (3,599,362) |
Loss from extinguishment of debt related to increase in post-modification cash flows | (2,710,194) | |
Change in fair value recognized | (1,797,294) | (6,609,479) |
Marathon Convertible Notes | Pre-modification Marathon Convertible Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Gain (Loss) from change in fair value from date of modification | 498,600 | |
Marathon Convertible Notes | Post-modification Marathon Convertible Note | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Gain (Loss) from change in fair value from date of modification | (1,686,033) | (2,616,633) |
Loss from extinguishment of debt related to increase in post-modification cash flows | (5,008,800) | |
Change in fair value recognized | $ (1,686,033) | $ (7,126,833) |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Change in Fair Value (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Beginning Balance | $ 11,927,831 |
Loan Received | 7,000,000 |
Payments | (1,599,095) |
Adjustment to Fair Value Mark to Market | 13,736,312 |
Ending Balance | 31,065,048 |
Marathon Convertible Notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Beginning Balance | 6,360,600 |
Payments | (409,233) |
Adjustment to Fair Value Mark to Market | 7,126,833 |
Ending Balance | 13,078,200 |
SWK Loans | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Beginning Balance | 5,567,231 |
Loan Received | 7,000,000 |
Payments | (1,189,862) |
Adjustment to Fair Value Mark to Market | 6,609,479 |
Ending Balance | $ 17,986,848 |
Fair Value Measurements - Sch_4
Fair Value Measurements - Schedule of Change in Fair Value (Parenthetical) (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible note payable, at fair value | $ 13,078,200 | $ 13,078,200 |
Loss on extinguishment of debt | $ 350,000 | 8,541,494 |
Marathon Convertible Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loss on extinguishment of debt | 5,000,000 | |
SWK Loans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loss on extinguishment of debt | $ 2,700,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 3 Months Ended | |||||||||||
Jan. 14, 2022 USD ($) | Oct. 12, 2021 USD ($) | Mar. 19, 2021 USD ($) | Jan. 25, 2021 USD ($) | Jan. 21, 2021 USD ($) | May 31, 2021 | Sep. 30, 2018 Patent | Aug. 31, 2016 | Jun. 30, 2021 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 04, 2021 USD ($) | |
Commitments And Contingencies [Line Items] | |||||||||||||
Reimbursement payment | $ 14,000,000 | ||||||||||||
Development payments | 10,000,000 | ||||||||||||
Other current liabilities | $ 742,922 | $ 741,425 | |||||||||||
Other current assets | 14,638 | $ 20,188 | |||||||||||
Pending Litigation | The Securities Class Action | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Proposed settlement as a loss in accrued expenses | $ 8,400,000 | $ 8,400,000 | |||||||||||
Other current liabilities | $ 900,000 | ||||||||||||
Pending Litigation | Stockholders Derivative Action | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Payment of settlement amount | $ 500,000 | ||||||||||||
Assistance Publique - Hopitaux de Paris ("AP-HP") | License Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Agreement entered date | 2018-09 | ||||||||||||
Number of patent applications | Patent | 3 | ||||||||||||
Assistance Publique - Hopitaux de Paris ("AP-HP") | Private Acer | License Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Agreement entered date | 2016-08 | ||||||||||||
Relief Therapeutics Holding AG | Collaboration Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Upfront non-refundable payment received | $ 1,000,000 | ||||||||||||
Cash payment received | 10,000,000 | ||||||||||||
Reimbursement payment | 14,000,000 | 14,000,000 | |||||||||||
Repayment of outstanding balance of prior loan and interest | 4,000,000 | $ 4,000,000 | |||||||||||
Development payments | $ 20,000,000 | ||||||||||||
Net profit split ratio based on territory | 60% | 60% | |||||||||||
Percentage of royalty revenue received | 15% | ||||||||||||
Milestone payment to be received | $ 6,000,000 | $ 6,000,000 | |||||||||||
Relief Therapeutics Holding AG | Collaboration Agreement | First Development Payment | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Reimbursement payment | $ 10,000,000 | ||||||||||||
Relief Therapeutics Holding AG | Collaboration Agreement | Second Development Payment | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Potential proceeds from development payments subject to acceptance of new drug | $ 10,000,000 | ||||||||||||
Relief Therapeutics Holding AG | Collaboration Agreement | Maximum | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Development payments | $ 20,000,000 | $ 20,000,000 | |||||||||||
Relief Therapeutics Holding AG | Collaboration Agreement | Secured Loan | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Debt instrument, term | 12 months | ||||||||||||
Debt instrument, principal amount | $ 4,000,000 | ||||||||||||
Debt instrument, interest rate | 6% | ||||||||||||
Relief Therapeutics Holding AG | Waiver and Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Second tranche of development payment, expiry date | Jan. 14, 2022 | ||||||||||||
Relief Therapeutics Holding AG | Waiver and Agreement | Second Development Payment | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Proceeds from second tranche of development payments subject to new drug application | $ 5,000,000 | ||||||||||||
Proceeds from first tranche of development payments subject to new drug application | $ 5,000,000 | ||||||||||||
Emory University | License Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Agreement entered date | 2021-05 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 37 Months Ended | |||||||||||||||
Mar. 21, 2023 | Nov. 29, 2022 | Apr. 30, 2020 | Mar. 18, 2020 | Sep. 18, 2019 | Nov. 09, 2018 | May 14, 2018 | Sep. 19, 2017 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Feb. 18, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | |
Stockholders Equity [Line Items] | ||||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Number of share outstanding | 3,055,256 | 2,850,787 | 3,055,256 | 2,850,787 | 3,055,256 | 2,794,850 | 1,954,975 | |||||||||||
Awards granted under the plan | 630,000 | 958,000 | ||||||||||||||||
Unrecognized compensation expense | $ 2,200,000 | $ 2,200,000 | $ 2,200,000 | |||||||||||||||
Unrecognized compensation expense remaining vesting period | 2 years 8 months 12 days | |||||||||||||||||
Weighted average grant date fair value of options granted | $ 1.43 | |||||||||||||||||
Fair value of options vested | $ 200,000 | $ 400,000 | $ 1,000,000 | $ 1,500,000 | ||||||||||||||
Securities Purchase Agreement | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 2,335,000 | |||||||||||||||||
Common stock, par value | $ 0.0001 | |||||||||||||||||
Proceeds from issuance of common stock gross | $ 2,700,000 | |||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 2,300,000 | |||||||||||||||||
Combined purchase price for one Share and one Common Warrant | $ 0.916 | |||||||||||||||||
Combined purchase price for one Pre-Funded Warrant and one Common Warrant | $ 0.915 | |||||||||||||||||
Securities Purchase Agreement | Placement Agent | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Percentage of aggregate gross proceeds of offering equal to cash fee | 7.50% | |||||||||||||||||
Non-accountable expense allowance | $ 70,000 | |||||||||||||||||
Clearing fees | $ 16,000 | |||||||||||||||||
Period of right of first refusal | 6 months | |||||||||||||||||
Restricted Stock Units (RSUs) | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Awards granted under the plan | 0 | 0 | 0 | 0 | ||||||||||||||
2018 Stock Incentive Plan | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Number of common stock authorized for issuance | 784,971 | 572,410 | ||||||||||||||||
Share-based compensation arrangement by share-based payment award, description | In addition, the number of shares authorized for issuance under the 2018 Plan is automatically increased (the “evergreen provision”) on the first day of each fiscal year beginning on January 1, 2019, and ending on (and including) January 1, 2028, in an amount equal to the lesser of (i) 4% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) another amount (including zero) determined by the Company’s Board of Directors. On January 1, 2023 and 2022, 784,971 and 572,410 additional shares, respectively, were authorized according to the evergreen provision. On February 18, 2022, the Company’s Board of Directors amended and restated the 2018 Plan to add a provision permitting the grant of inducement awards under Nasdaq Marketplace Rule 5635(c)(4) to eligible recipients and initially reserved 200,000 shares of the Company’s common stock for issuance pursuant to inducement awards granted under the 2018 Plan. Any shares subject to awards granted under the 2018 Plan that are forfeited or terminated before being exercised or settled, or are not delivered to the participant because such award is settled in cash, will again become available for issuance under the 2018 Plan. Shares withheld to satisfy the grant, exercise price or tax withholding obligation related to an award will again become available for issuance under the 2018 Plan. | |||||||||||||||||
Share-based compensation arrangement by share-based payment award, expiration date | Jan. 01, 2028 | |||||||||||||||||
Share-based compensation arrangement by share-based payment award, percentage of outstanding our common stock | 4% | |||||||||||||||||
Grant of inducement awards and reserved, shares | 200,000 | |||||||||||||||||
Options contractual term | 10 years | |||||||||||||||||
Available for the grant of future awards | 913,878 | 913,878 | 913,878 | |||||||||||||||
2018 Stock Incentive Plan | Executive Officers and Employees | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Share-based compensation arrangement by share-based payment award, stock options vesting period | 4 years | |||||||||||||||||
2018 Stock Incentive Plan | Executive Officers and Employees | One-year Anniversary of the Grant Date | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Share-based compensation arrangement by share-based payment award, Vesting percentage | 25% | |||||||||||||||||
2018 Stock Incentive Plan | Executive Officers and Employees | One-year Anniversary of the Grant Date | Unvested Restricted Stock Units | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Unvested restricted stock units | 0 | 0 | 0 | 0 | 0 | |||||||||||||
2018 Stock Incentive Plan | Executive Officers and Employees | Quarterly over Remaining Three Years | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Share-based compensation arrangement by share-based payment award, Vesting percentage | 75% | |||||||||||||||||
2018 Stock Incentive Plan | Executive Officers and Employees | January 1, 2021 | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Share-based compensation arrangement by share-based payment award, Vesting percentage | 50% | |||||||||||||||||
2018 Stock Incentive Plan | Executive Officers and Employees | January 1, 2022 | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Share-based compensation arrangement by share-based payment award, Vesting percentage | 50% | |||||||||||||||||
2018 Stock Incentive Plan | Board of Directors | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Share-based compensation arrangement by share-based payment award, stock options vesting period | 12 months | |||||||||||||||||
2013 Stock Incentive Plan | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Options contractual term | 10 years | |||||||||||||||||
Awards granted under the plan | 0 | |||||||||||||||||
2010 Stock Incentive Plan | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Options contractual term | 10 years | |||||||||||||||||
Awards granted under the plan | 0 | |||||||||||||||||
Lincoln Park | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 300,000 | 300,000 | ||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 400,000 | $ 400,000 | ||||||||||||||||
Number of shares, company may sell on any single business day | 50,000 | |||||||||||||||||
Maximum amount of Common stock at time of sale, per regular purchase | $ 1,000,000 | |||||||||||||||||
Maximum percentage of shares may be issued or sold based on outstanding shares immediately prior to execution of agreement | 19.99% | |||||||||||||||||
Issuance of common stock for commitment fee, shares | 148,148 | |||||||||||||||||
Fair value of the commitment fee shares, recorded to general and administrative expense along with other costs incurred | $ 0.4 | |||||||||||||||||
Weighted Average | Lincoln Park | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, gross sale price per share | $ 1.25 | $ 1.25 | ||||||||||||||||
Maximum | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Public float | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | |||||||||||||||
Maximum | 2010 and 2013 Stock Incentive Plan | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Number of share outstanding | 635,170 | |||||||||||||||||
Maximum | Lincoln Park | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Shares value might be issued under agreement | $ 15,000,000 | $ 15,000,000 | ||||||||||||||||
Number of shares, company may sell on any single business day | 100,000 | |||||||||||||||||
Beneficially ownership percentage | 9.99% | |||||||||||||||||
Minimum | Lincoln Park | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Threshold price per share for issuance of shares under agreement | $ 2.1668 | |||||||||||||||||
Pre-Funded Warrants | Securities Purchase Agreement | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Warrant issued to purchase common stock | 585,306 | |||||||||||||||||
Warrant, exercise price | $ 0.001 | |||||||||||||||||
Outstanding common stock beneficially owning percentage | 9.99% | |||||||||||||||||
Pre-Funded Warrants | Maximum | Securities Purchase Agreement | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Outstanding common stock beneficially owning percentage | 4.99% | |||||||||||||||||
Common Warrants [Member] | Securities Purchase Agreement | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Warrant issued to purchase common stock | 2,920,306 | |||||||||||||||||
Warrant, exercise price | $ 0.791 | |||||||||||||||||
Warrants term | 5 years 6 months | |||||||||||||||||
At-the-Market Facility | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 456,886 | 1,062,547 | 1,919,140 | 1,062,547 | ||||||||||||||
Proceeds from issuance of common stock gross | $ 400,000 | $ 3,300,000 | $ 4,500,000 | $ 3,300,000 | 21,000,000 | |||||||||||||
Common stock offering costs | 14,000 | 200,000 | 200,000 | 200,000 | ||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | 300,000 | $ 3,100,000 | 4,300,000 | $ 3,100,000 | ||||||||||||||
Amount remained available under facility | $ 29,000,000 | $ 29,000,000 | $ 29,000,000 | |||||||||||||||
At-the-Market Facility | Securities Purchase Agreement | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 456,886 | |||||||||||||||||
Proceeds from issuance of common stock gross | $ 400,000 | |||||||||||||||||
Common stock offering costs | 14,000 | |||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 300,000 | |||||||||||||||||
At-the-Market Facility | Weighted Average | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, gross sale price per share | $ 0.7912 | $ 3.0719 | $ 2.3290 | $ 3.0719 | ||||||||||||||
At-the-Market Facility | Weighted Average | Securities Purchase Agreement | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, gross sale price per share | $ 0.7912 | |||||||||||||||||
At-the-Market Facility | Maximum | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Aggregate offering price of common stock | $ 50,000,000 | $ 50,000,000 | ||||||||||||||||
Private Placement | President and Chief Executive Officer and Member and Chairman Of Board Of Directors | ||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||
Issuance of common stock, net of issuance costs, shares | 1,229,508 | |||||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 1,500,000 | |||||||||||||||||
Issuance of common stock, price per share | $ 1.22 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Option Activity under 2018 Plan, 2013 Plan and 2010 Plan (Details) - $ / shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Options | ||||
Number of Shares, Options outstanding at beginning of period | 2,794,850 | 1,954,975 | 1,954,975 | |
Number of Shares, Options Granted | 630,000 | 958,000 | ||
Number of Shares, Options Cancelled/forfeited | (369,594) | (62,188) | ||
Number of Shares, Options outstanding at end of period | 3,055,256 | 2,850,787 | 2,794,850 | 1,954,975 |
Number of Shares, Options exercisable at end of period | 1,749,361 | 1,322,180 | ||
Weighted Average Exercise Price, Options | ||||
Weighted Average Exercise Price, Options outstanding at beginning of period | $ 6.36 | $ 8.16 | $ 8.16 | |
Weighted Average Exercise Price, Options Granted | 1.67 | 2.33 | ||
Weighted Average Exercise Price, Options Cancelled/forfeited | 4.27 | 4.12 | ||
Weighted Average Exercise Price, Options outstanding at end of period | 5.65 | 6.29 | $ 6.36 | $ 8.16 |
Weighted Average Exercise Price, Options exercisable at end of period | $ 8.18 | $ 9.80 | ||
Weighted Average Remaining Contract Term, Options | ||||
Weighted Average Remaining Contractual Term, Options outstanding at beginning of period | 7 years 4 months 24 days | 8 years | 7 years 4 months 24 days | 7 years 9 months 18 days |
Weighted Average Remaining Contractual Term, Options exercisable at end of period | 6 years 3 months 18 days | 6 years 7 months 6 days |
Stockholders' Deficit - Summa_2
Stockholders' Deficit - Summary of Stock-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stockholders Equity [Line Items] | ||||
Stock-based compensation expense | $ 259,903 | $ 460,777 | $ 545,412 | $ 934,874 |
Research and Development | ||||
Stockholders Equity [Line Items] | ||||
Stock-based compensation expense | 83,998 | 158,880 | 199,578 | 299,320 |
General and Administrative | ||||
Stockholders Equity [Line Items] | ||||
Stock-based compensation expense | $ 175,905 | $ 301,897 | $ 345,834 | $ 635,554 |
Stockholders' Deficit - Summa_3
Stockholders' Deficit - Summary of Warrant Issued (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Warrants Issued to SWK | ||
Stockholders Equity [Line Items] | ||
Number of shares, Outstanding at beginning of the period | 250,000 | |
Number of shares, Granted during the period | 750,000 | 150,000 |
Number of shares, Outstanding at end of the period | 1,000,000 | 150,000 |
Number of shares, Exercisable at end of the period | 1,000,000 | 150,000 |
Weighted average remaining life | 6 years 4 months 24 days | 6 years 9 months 18 days |
Weighted Average Exercise Price, Outstanding at beginning of the period | $ 2.08 | |
Weighted Average Exercise Price, Granted | 1.46 | $ 2.46 |
Weighted Average Exercise Price, Outstanding at end of the period | 1.62 | 2.46 |
Weighted Average Exercise Price, Exercisable at end of the period | $ 1.62 | $ 2.46 |
March 2023 Offering | ||
Stockholders Equity [Line Items] | ||
Number of shares, Granted during the period | 3,505,612 | |
Number of shares, Exercised during the period | 585,306 | |
Number of shares, Outstanding at end of the period | 2,920,306 | |
Number of shares, Exercisable at end of the period | 2,920,306 | |
Weighted average remaining life | 5 years 2 months 12 days | |
Weighted Average Exercise Price, Granted | $ 0.66 | |
Weighted Average Exercise Price, Outstanding at end of the period | 0.79 | |
Weighted Average Exercise Price, Exercisable at end of the period | $ 0.79 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Numerator and Denominator used in Calculation of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||||
Net loss | $ (8,090,720) | $ (16,280,706) | $ (2,667,036) | $ (9,179,004) | $ (24,371,426) | $ (11,846,040) |
Basic: | ||||||
Weighted Average Number Of Shares Outstanding Basic | 24,462,895 | 15,273,707 | 22,765,268 | 14,794,637 | ||
Diluted: | ||||||
Effect of potentially dilutive shares | 2,407,693 | 1,577,900 | ||||
Total weighted average shares of common stock and potentially dilutive shares | 24,462,895 | 17,681,400 | 22,765,268 | 16,372,537 | ||
Basic: | ||||||
Net loss applicable to common stockholders | $ (8,090,720) | $ (2,667,036) | $ (24,371,426) | $ (11,846,040) | ||
Basic net loss per common share | $ (0.33) | $ (0.17) | $ (1.07) | $ (0.80) | ||
Earnings Per Share, Diluted [Abstract] | ||||||
Net loss applicable to common shareholders, diluted | $ (8,090,720) | $ (5,308,236) | $ (24,371,426) | $ (13,524,840) | ||
Diluted net loss per common share | $ (0.33) | $ (0.30) | $ (1.07) | $ (0.83) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Numerator and Denominator used in Calculation of Basic and Diluted Net Loss Per Common Share (Parenthetical) (Details) - shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Securities excluded from computation of net loss per share | 9,375,562 | 3,000,787 | |
Effect of potentially dilutive shares | 2,407,693 | 1,577,900 | |
Marathon Convertible Notes | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Securities excluded from computation of net loss per share | 2,600,000 | 1,700,000 |
Net Loss Per Share - Schedule_3
Net Loss Per Share - Schedule of Number of Shares of Common Stock Underlying Potentially Dilutive Securities Excluded From Calculation of Diluted Net Loss Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock dilutive securities | 9,375,562 | 3,000,787 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock dilutive securities | 3,055,256 | 2,850,787 |
Shares associated with Marathon Convertible Note | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock dilutive securities | 2,400,000 | |
March 2023 Offering warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock dilutive securities | 2,920,306 | |
SWK Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock dilutive securities | 1,000,000 | 150,000 |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from computation of net loss per share | 9,375,562 | 3,000,787 |
Senior Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from computation of net loss per share | 2,400,000 |