Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2020 | Feb. 12, 2021 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NEUROONE MEDICAL TECHNOLOGIES Corp | |
Entity Central Index Key | 0001500198 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity File Number | 000-54716 | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 35,600,835 | |
Entity Incorporation State Country Code | DE |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Current assets: | ||
Cash | $ 7,129,112 | $ 4,036,397 |
Accounts receivable | 71,474 | |
Inventory | 13,816 | |
Prepaid and other assets | 125,864 | 118,611 |
Total current assets | 7,340,266 | 4,155,008 |
Intangible assets, net | 150,944 | 156,523 |
Right-of-use asset | 268,932 | 282,211 |
Property and equipment, net | 152,874 | 166,031 |
Total assets | 7,913,016 | 4,759,773 |
Current liabilities: | ||
Accounts payable | 519,521 | 762,538 |
Accrued expenses | 611,872 | 512,762 |
Advance related to future financing | 5,000,000 | |
Convertible promissory notes (Note 8) | 1,007,206 | |
Deferred revenue | 51,160 | 73,434 |
Total current liabilities | 6,182,553 | 2,355,940 |
Operating lease liability | 238,977 | 254,328 |
Other liabilities | 83,333 | 83,333 |
Total liabilities | 6,504,863 | 2,693,601 |
Commitments and contingencies (Note 4) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of December 31, 2020 and September 30, 2020; no shares issued or outstanding as of December 31, 2020 and September 30, 2020. | ||
Common stock, $0.001 par value; 100,000,000 shares authorized as of December 31, 2020 and September 30, 2020; 23,090,051 and 22,180,674 shares issued and outstanding as of December 31, 2020 and September 30, 2020, respectively. | 23,090 | 22,181 |
Additional paid-in capital | 34,223,574 | 32,923,022 |
Accumulated deficit | (32,838,511) | (30,879,031) |
Total stockholders' equity | 1,408,153 | 2,066,172 |
Total liabilities and stockholders' equity | $ 7,913,016 | $ 4,759,773 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 23,090,051 | 22,180,674 |
Common stock, shares outstanding | 23,090,051 | 22,180,674 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Product revenue | $ 71,474 | |
Cost of product revenue | 109,131 | |
Product gross profit (loss) | (37,657) | |
Collaborations revenue | 22,274 | |
Operating expenses: | ||
Selling, general and administrative | 1,193,860 | 1,312,166 |
Research and development | 934,158 | 501,819 |
Total operating expenses | 2,128,018 | 1,813,985 |
Loss from operations | (2,143,401) | (1,813,985) |
Interest expense | (3,053) | (2,697,507) |
Net valuation change of instruments measured at fair value | 1,974 | (125,574) |
Other income | 185,000 | |
Loss before income taxes | (1,959,480) | (4,637,066) |
Provision for income taxes | ||
Net loss | $ (1,959,480) | $ (4,637,066) |
Net loss per share: | ||
Basic and diluted | $ (0.09) | $ (0.34) |
Number of shares used in per share calculations: | ||
Basic and diluted | 22,752,931 | 13,657,936 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Jan. 09, 2019 | $ 13,494 | $ 15,987,799 | $ (17,238,871) | $ (1,237,578) |
Balance, shares at Jan. 09, 2019 | 13,493,705 | |||
Issuance of common stock under securities purchase agreement | $ 142 | 254,858 | 255,000 | |
Issuance of common stock under securities purchase agreement, shares | 141,666 | |||
Issuance of warrants in connection with convertible notes offering | 419,635 | 419,635 | ||
Issuance of warrants in connection with convertible notes offering, shares | ||||
Stock-based compensation | 463,084 | 463,084 | ||
Issuance of common stock for consulting services | $ 90 | 124,503 | 124,593 | |
Issuance of common stock for consulting services, shares | 90,000 | |||
Issuance of common stock upon vesting of restricted stock units | $ 11 | (11) | ||
Issuance of common stock upon vesting of restricted stock units, shares | 10,503 | |||
Net loss | (4,637,066) | (4,637,066) | ||
Balance at Dec. 31, 2019 | $ 13,737 | 17,249,868 | (21,875,937) | (4,612,332) |
Balance, shares at Dec. 31, 2019 | 13,735,874 | |||
Balance at Sep. 30, 2020 | $ 22,181 | 32,923,022 | (30,879,031) | 2,066,172 |
Balance, shares at Sep. 30, 2020 | 22,180,674 | |||
Issuance of common stock upon conversion of convertible notes | $ 878 | 1,004,354 | 1,005,232 | |
Issuance of common stock upon conversion of convertible notes, shares | 878,253 | |||
Issuance cost settlement in connection with private placement | 50,400 | 50,400 | ||
Issuance cost settlement in connection with private placement, shares | ||||
Stock-based compensation | 245,829 | 245,829 | ||
Issuance of common stock upon vesting of restricted stock units | $ 31 | (31) | ||
Issuance of common stock upon vesting of restricted stock units, shares | 31,324 | |||
Net loss | (1,959,480) | (1,959,480) | ||
Balance at Dec. 31, 2020 | $ 23,090 | $ 34,223,574 | $ (32,838,511) | $ 1,408,153 |
Balance, shares at Dec. 31, 2020 | 23,090,051 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | ||
Net loss | $ (1,959,480) | $ (4,637,066) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 18,736 | 9,898 |
Stock-based compensation | 245,829 | 587,677 |
Non-cash interest on convertible notes | 1,831,940 | |
Issuance costs attributed to financing activities | 3,053 | 865,567 |
Revaluation of convertible notes | (1,974) | 125,574 |
Non-cash lease expense | 13,848 | 9,870 |
Change in assets and liabilities: | ||
Accounts receivable | (71,474) | |
Inventory | (13,816) | |
Prepaid and other assets | (7,253) | (6,827) |
Accounts payable | (243,017) | 6,669 |
Accrued expenses, deferred revenue, operating lease and other liabilities | 111,316 | (18,148) |
Net cash used in operating activities | (1,904,232) | (1,224,846) |
Investing activities | ||
Purchase of fixed assets | (10,271) | |
Net cash used in investing activities | (10,271) | |
Financing activities | ||
Proceeds from issuance of convertible promissory notes | 3,234,800 | |
Issuance costs related to convertible notes | (3,053) | (417,176) |
Proceeds from issuance of common stock in connection with private placements | 255,000 | |
Proceeds from advance related to future financing | 5,000,000 | |
Issuance costs related to private placements | (53,954) | |
Net cash provided by financing activities | 4,996,947 | 3,018,670 |
Net increase in cash | 3,092,715 | 1,783,553 |
Cash at beginning of period | 4,036,397 | 260,749 |
Cash at end of period | 7,129,112 | 2,044,302 |
Supplemental non-cash financing and investing transactions: | ||
Conversion of convertible notes into equity | 1,005,232 | |
Unpaid issuance costs attributed to convertible notes and private placement | 50,400 | 28,756 |
Broker warrants issued in connection with convertible notes | 419,635 | |
Purchased fixed assets in accounts payable and accrued expenses | 10,271 | |
Operating lease right of use asset obtained in exchange for operating lease | $ 335,119 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | NOTE 1 – Description of Business and Basis of Presentation NeuroOne Medical Technologies Corporation (the "Company" or "NeuroOne"), a Delaware Corporation, is an early-stage medical technology company developing comprehensive neuromodulation cEEG and sEEG monitoring, ablation, and brain stimulation solutions to diagnose and treat patients with epilepsy, Parkinson's disease, essential tremors, and other brain related disorders. To date, the Company has had limited commercial sales. The Company is currently raising capital to fund the development of its proprietary technology. The Company received 510(k) clearance from the FDA to market the initial cEEG product and expects to submit an application for 510(k) clearance for a second product by end of the first half of calendar year 2021. The Company is based in Eden Prairie, Minnesota. COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus ("COVID-19") as a global pandemic, which continues to spread throughout the United States and around the world. As a result of the COVID-19 pandemic, the Company has experienced delays and disruptions in its pre-clinical and clinical trials, as well as interruptions in its manufacturing, supply chain, and research and development operations. Additionally, the development of the Company's technology was delayed in fiscal year 2020 due to interruption in global manufacturing and shipping due to the COVID-19 pandemic. For example, one of our key manufacturing partners and one of the Company's suppliers have had staffing issues due to COVID-19, leading to delays in the Company's development builds and delays in shipping product. Additionally, the Company's own staff has been impacted by infections and mandatory quarantines. The Company's plans for further testing or clinical trials may be further impacted by the continuing effects of COVID-19. The global outbreak of COVID-19 continues to rapidly evolve. In April 2020, given the impact of COVID-19 on the Company, the Company applied for and received loan funding of $83,333 under the Paycheck Protection Program ("PPP"). The Company may be required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, and it cannot provide any assurance that it will be eligible for loan forgiveness, or that any amount of the PPP loan will ultimately be forgiven. The extent to which the COVID-19 pandemic may impact the Company's business and pre-clinical and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the effect of the pandemic on its suppliers and distributors and the global supply chain, the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the U.S. and other countries, business closures or business disruptions and the effectiveness of actions taken in the U.S. and other countries to contain and treat the disease. The COVID-19 pandemic may also impact the Company's business because of employee illness, school closures, and other community response measures. The COVID-19 pandemic may also impact the Company's ability to secure additional financing, or its ability to up-list from our current OTC Market ("OTCQB"). Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on the Company's results of future operations, financial position, and liquidity in fiscal year 2021 and beyond. Basis of presentation The accompanying unaudited condensed financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. The condensed financial statements may not include all disclosures required by U.S. GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended September 30, 2020 included in the Annual Report on Form 10-K. The condensed balance sheet at September 30, 2020 was derived from the audited financial statements of the Company. In December 2019, the Company merged its wholly owned subsidiary, NeuroOne Inc., into NeuroOne Medical Technologies Corporation. The merger of the Company's wholly owned subsidiary did not have a financial impact to the periods presented. Upon close of the merger, the Company did not have any remaining entities that required consolidation for financial statement reporting purposes. In the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. Reclassifications Certain amounts presented in the prior year period have been reclassified to conform to current period financial statement presentation. The change in accounts payable and accrued expenses reported in the statements of cash flows during the comparable prior year period was reclassified into two separate line item categories. Immaterial Revision to Prior Period Financial Statements Subsequent to the quarter ended December 31, 2019, it was determined that non-cash entries related to the operating lease liability and related right-of-use asset were inappropriately presented on a gross basis within the condensed statement of cash flows. The Company assessed the materiality of this error considering both qualitative and quantitative factors and determined it to be immaterial. A revision to the previously issued condensed statement of cash flows has been made. The error had no impact to the condensed balance sheet, condensed statement of operations, condensed statement of changes in stockholders' equity (deficit), or cash flows from investing and financing activities in the condensed statement of cash flows. The effect of the revisions on the impacted line items within operating cash flows of the Company's condensed statement of cash flows for the quarter ended December 31, 2019 is as follows: ● an addition of non-cash lease expense of $9,870; ● a decrease in the change in prepaid and other assets of $325,248, bringing the previously reported balance of ($332,075) to a revised balance of ($6,827); and ● a decrease in the change in accrued expenses, deferred revenue, operating lease and other liabilities of $335,118, bringing the previously reported balance of $323,639 to a revised balance, net of the $6,669 reclassification of accounts payable described above, to ($18,148). There was no impact to net operating cash flows. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 3 Months Ended |
Dec. 31, 2020 | |
Liquidity and Capital Resources [Abstract] | |
Liquidity and Capital Resources | NOTE 2 – Liquidity and Capital Resources The accompanying condensed financial statements have been prepared on the basis that the Company will continue as a going concern. The Company has incurred losses since inception, negative cash flows from operations, and has an accumulated deficit of $32,838,511 as of December 31, 2020. The Company has not established a source of revenues to cover its full operating costs, and as such, has been dependent on funding operations through the issuance of debt and sale of equity securities. Management believes that the Company, as a result of the cash flows received from the 2021 Private Placement (See Note 13 – Subsequent Events), has adequate liquidity to fund its operations without raising additional funds for at least twelve months from the date of issuance of these financial statements. Management believes additional capital will be required for the Company to reach a point of break-even cash flows. The Company's future operating activities under the distribution and development agreement with Zimmer, Inc. coupled with its plans to raise capital or issue debt financing may provide additional liquidity in the future, however these actions are not solely within the control of the Company and we are unable to predict the ultimate outcome of these actions to generate the liquidity ultimately required. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - Summary of Significant Accounting Policies Management's Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, primarily in connection with the convertible promissory notes, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Company entered into a development and distribution agreement which has current and future revenue recognition implications. See Note 7 – Zimmer Development Agreement. Product Revenue Revenues from product sales are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. At the inception of each contract, performance obligations are identified and the total transaction price is allocated to the performance obligations. The Company commenced commercial sales of cEEG strip/grid and electrode cable assembly products in the first quarter of fiscal year 2021. Cost of Product Revenue Cost of product revenue consists of the manufacturing and materials costs incurred by the Company's third-party contract manufacturer in connection with Strip/Grid Products and outside supplier materials costs in connection with the Electrode Cable Assembly Products. In addition, cost of product revenue includes royalty fees incurred in connection with the Company's license agreements. Collaborations Revenue In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. Performance obligations may include license rights, development services, and services associated with regulatory submission and approval processes. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation. Licenses of intellectual property Milestone payments Royalties Fair Value of Financial Instruments The Company's accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board ("FASB") fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. As of December 31, 2020 and September 30, 2020, the fair values of cash, accounts receivable, inventory, prepaid expenses, other assets, accounts payable and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the convertible notes while outstanding during the three months ended December 31, 2020 and 2019 were based on both the fair value of our common stock, discount associated with the embedded redemption features, and cash flow models discounted at current implied market rates evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments and are based on Level 3 inputs. There were no transfers between fair value hierarchy levels during the three months ended December 31, 2020 and 2019. The fair value of financial instruments measured on a recurring basis is as follows: As of Description Total Level 1 Level 2 Level 3 Liabilities: Convertible Notes $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — As of Description Total Level 1 Level 2 Level 3 Liabilities: Convertible Notes $ 1,007,206 $ — $ — $ 1,007,206 Total liabilities at fair value $ 1,007,206 $ — $ — $ 1,007,206 The following table provides a roll-forward of the convertible notes at fair value on a recurring basis using unobservable level 3 inputs for the three months ended December 31 as follows: 2020 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Change in fair value including accrued interest (1,974 ) Conversion of convertible promissory notes to common stock (1,005,232 ) Balance as of end of period – December 31, 2020 $ — 2019 Convertible notes Balance as of beginning of period – September 30, 2019 $ — Fair value attributed to convertible promissory notes upon issuance 5,066,740 Fair value attributed to note extinguishment 125,574 Balance as of end of period –December 31, 2019 $ 5,192,314 Intellectual Property The Company has entered into two licensing agreements with major research institutions, which allows for access to certain patented technology and know-how. Payments under those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired technology. Property and Equipment Property and equipment is recorded at cost and reduced by accumulated depreciation. Depreciation expense is recognized over the estimated useful lives of the assets using the straight-line method. The estimated useful life for equipment and furniture ranges from three to seven years and three years for software. Tangible assets acquired for research and development activities and that have alternative use are capitalized over the useful life of the acquired asset. Estimated useful lives are periodically reviewed, and, when appropriate, changes are made prospectively. Software purchased for internal use consists primarily of amounts paid for perpetual licenses to third-party software providers and installation costs. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Maintenance and repairs are charged directly to expense as incurred. Allowances for Doubtful Accounts The Company records a provision for doubtful accounts, when appropriate, based on historical experience and a detailed assessment of the collectability of its accounts receivable. In estimating the allowance for doubtful accounts, the Company considers, among other factors, the aging of the accounts receivable, its historical write-offs, the credit worthiness of each customer, and general economic conditions. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be recovered. Actual write-offs may be in excess of the Company's estimated allowance. Inventories Inventories are stated at the lower of cost (using the first-in, first-out "FIFO" method) or net realizable value. The Company calculates inventory valuation adjustments for excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives, and estimated future demand of the products and spare parts. The Company's inventory is currently comprised of cEEG strip/grid and electrode cable assembly finished good product. The strip/ grid products are produced by a third-party contract manufacturer and the electrode cable assembly products are obtained from outside suppliers. Impairment of Long-Lived Assets The Company evaluates its long-lived assets, which consist of licensed intellectual property and property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Research and Development Costs Research and development costs are charged to expense as incurred. Research and development expenses may include costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees, and other external costs. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with Accounting Standards Codification (ASC) 730, Research and Development Selling, General and Administrative Selling, general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with research and development activities. Other significant costs include legal fees relating to corporate matters, intellectual property costs, professional fees for consultants assisting with regulatory, clinical, product development, financial matters, and beginning in the first quarter of fiscal year 2021, sales and marketing in connection with the commercial sale of cEEG strip/grid and electrode cable assembly products. Income Taxes For the Company, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Net Loss Per Share For the Company, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company's convertible promissory notes, warrants, stock options and restricted stock units while outstanding are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the warrants, stock options and restricted stock units. Diluted earnings with respect to the convertible promissory utilize the if-converted method. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for the three months ended December 31, 2020 and 2019. The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three months ended December 31, 2020 and 2019: 2020 2019 Warrants 10,170,588 8,389,987 Stock options 1,603,485 1,595,818 Restricted stock units 54,952 14,006 Convertible notes — 1,336,472 Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . ● Removals: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. ● Modifications: for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee's assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. ● Additions: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should all be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date. The Company adopted the new guidance on October 1, 2020 and it did not have a material impact on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The ASU is effective for fiscal years beginning after December 15, 2020. The Company does not expect that the adoption of this new guidance will have a material impact on the Company's financial statements and plans to adopt this guidance on a prospective basis for the provisions applicable to the Company. In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which, among other things, provides guidance on how to account for contracts on an entity's own equity. This ASU eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity's own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, this ASU modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in this ASU are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 4 - Commitments and Contingencies WARF License Agreement The Company has entered into an exclusive start-up company license agreement with the Wisconsin Alumni Research Foundation ("WARF") for WARF's neural probe array and thin film micro electrode technology (the "WARF Agreement"). The Company entered into an Amended and Restated Exclusive Start-up Company License Agreement (the "WARF License") with WARF on January 21, 2020, which amended and restated in full the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September 18, 2019. The WARF License grants to the Company an exclusive license to make, use and sell, in the United States only, products that employ certain licensed patents for a neural probe array or thin-film micro electrode array and method. The Company has agreed to pay WARF a royalty equal to a single-digit percentage of its product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect. The minimum annual royalty payment for calendar year 2020 in the amount of $50,000 was accrued by the Company as of December 31, 2020 and was reflected as a component of cost of product revenue for the three month period ended December 31, 2020. If the Company or any of its sublicensees contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the contested patent is found to be valid and would be infringed by the Company if not for the WARF License, the royalty rate will be tripled for the remaining term of the WARF License. WARF may terminate the WARF License if the Company defaults on the payments of amounts due to WARF or fails to timely submit development reports, or breaches any other covenant in the WARF License and fails to remedy such default in ninety (90) days or in the event of certain bankruptcy events involving the Company. WARF may also terminate the WARF License on ninety (90) days' notice if the Company fails to have commercial sales of one or more FDA-approved products under the WARF License by June 30, 2021. The WARF License otherwise expires by its terms (i) on the date that no valid claims on the patents licensed thereunder remain or (ii) upon the cessation for more than four (4) calendar quarters of the payment, once begun, of earned royalties under certain sections of the WARF License. The Company expects the latest expiration of a licensed patent to occur in 2030. The first commercial sale occurred in December 2020, prior to the June 30, 2021 deadline. Mayo Agreement The Company has an exclusive license and development agreement with the Mayo Foundation for Medical Education and Research ("Mayo") related to certain intellectual property and development services for thin film micro electrode technology ("Mayo Agreement"). If the Company is successful in obtaining regulatory approval, the Company is to pay royalties to Mayo based on a percentage of net sales of products of the licensed technology through the term of the Mayo Agreement, set to expire May 25, 2037. As of December 31, 2020, $2,144 in royalty payments were due to Mayo given the commencement of commercial sales during the first quarter of 2021 and were reflected as a component of cost of product revenue during the period. Legal PMT Litigation From time to time, the Company is subject to litigation and claims arising in the ordinary course of business. In May 2017, NeuroOne received a letter from PMT Corporation ("PMT"), the former employer of Mark Christianson and Wade Fredrickson. PMT claimed that these officers had breached their restrictive covenant obligations with PMT by virtue of their work for NeuroOne and such officer's prior work during employment with the prior employer, that these officers had breached their confidentiality and non-disclosure obligations to PMT and federal and state law by misappropriating confidential and trade secret information, and that the Company is responsible for tortious interference with contracts. The letter, which purported to attach a noncompete agreement signed by Mr. Fredrickson, demanded that Mr. Fredrickson (who resigned from the Company in June 2017), Mr. Christianson and NeuroOne cease and desist all competitive activities, that Mr. Fredrickson step down from his position and that Mr. Christianson and NeuroOne provide the former employer access to NeuroOne's systems to demonstrate that it is not using trade secrets or proprietary information nor competing with the former employer. On March 29, 2018, the Company was served with a complaint filed by PMT adding the Company, NeuroOne and Mr. Christianson to its existing lawsuit against Mr. Fredrickson in the Fourth Judicial District Court of the State of Minnesota. The complaint purported to attach Mr. Fredrickson's noncompete agreement as Exhibit A. In the lawsuit, PMT claims that Mr. Fredrickson and Mr. Christianson breached their non-competition, non-solicitation and non-disclosure obligations, breached their fiduciary duty obligations, were unjustly enriched, engaged in unfair competition, engaged in a civil conspiracy, tortiously interfered with PMT's contracts and prospective economic advantage, and breached a covenant of good faith and fair dealing. Against Mr. Fredrickson, PMT also alleges that he intentionally or negligently spoliated evidence, made negligent or fraudulent misrepresentations, misappropriated trade secrets in violation of Minnesota law, and committed the tort of conversion and statutory civil theft. Against the Company and NeuroOne, PMT alleges that the Company and NeuroOne were unjustly enriched and engaged in unfair competition. PMT asked the Court to impose a constructive trust over the shares held by Mr. Fredrickson and Mr. Christianson and to award compensatory damages, equitable relief, punitive damages, attorneys' fees, costs and interest. On April 18, 2018, Mr. Christianson, the Company and NeuroOne, Inc. filed a motion for dismissal, which was heard by the Court on October 11, 2018. The motion for dismissal stated that: the contract claims against Mr. Christianson fail because his agreement was not supported by consideration; the Minnesota Uniform Trade Secrets Act preempts plaintiff's claims for unfair competition, civil conspiracy and unjust enrichment; plaintiff fails to state a claim regarding alleged breach of the duties of loyalty and good faith/fair dealing; plaintiff cannot legally obtain a constructive trust; plaintiff has insufficiently pled its tortious interference claims; and Plaintiff has not stated a claim for unfair competition. On January 7, 2019, the judge granted the motion for dismissal with respect to PMT's claim for breach of the duty of good faith and fair dealing, and denied the motion for dismissal with respect to the other claims presented. In April 2019, PMT served the Company, NeuroOne, Inc and Christianson with a proposed Second Amended Complaint, which included new claims against the Company and NeuroOne, Inc for tortious interference with contract and tortious interference with prospective business advantage and punitive damages against the Company, NeuroOne Inc. and Christianson. On June 28, 2019, the Company presented evidence indicating that PMT had participated in a fraud on the Court and sought an Order that PMT had waived the attorney client privilege. On July 16, 2019, the defendants served PMT with a joint notice of motion for sanctions seeking a variety of sanctions for litigation misconduct including, but not limited to, dismissal of the case and an award of attorneys' fees. The Company, NeuroOne Inc and Mr. Christianson further intend to move for summary judgment on all remaining claims asserted against them as well as for leave to assert counterclaims against PMT for abuse of process. On August 30, 2019, the Hennepin County District Court heard dispositive motions in this case. The district court judge indicated some claims would likely be tried to a jury and encouraged the parties to settle. On September 12, 2019, the district court heard NeuroOne's motion for sanctions. The district court held the sanctions hearing on December 17, 2019 and December 18, 2019 and indicated that a ruling would be made in approximately 90 days. On April 29, 2020, the district court granted the Company's motion for sanctions. Additionally, the district court granted the Company's motion for summary judgment in part with respect to the counts for Christianson's breach of non-confidentiality agreement, and denied the Company's motion for summary judgment on all other counts. On August 24, 2020, defendants moved the Court to amend their counterclaims for abuse of process against PMT to add a claim for punitive damages. On October 12, 2020 the Court awarded NeuroOne $185,000 in Rule 11 sanctions and Fredrickson $145,000 in Rule 11 sanctions with respect to its misconduct relating to the Fredrickson noncompete. PMT and its former litigation counsel, Barnes &Thornburg, were jointly and severally liable for these awards, which were paid on December 11, 2020 and have been recognized in other income in the condensed statement of operations. The Court granted NeuroOne's motion to amend to permit its assertion of the right to assert a punitive damages claim against PMT associated with the additional legal costs incurred by the Company in fighting the allegations relating to the Fredrickson noncompete. Trial has been set for December 2021, but this may be delayed or impacted by the COVID-19 pandemic. The Company intends to continue to defend itself vigorously and to continue to aggressively prosecute its affirmative counterclaim against PMT. The outcome of any claim against the Company by PMT was not estimable as of the filing of this Form 10-Q. Facility Lease On October 7, 2019, the Company entered into a non-cancellable lease agreement (the "Lease") with Biynah Cleveland, LLC, BIP Cleveland, LLC, and Edenvale Investors (together, the "Landlord") pursuant to which the Company has agreed to lease office space located at 7599 Anagram Drive, Eden Prairie, Minnesota (the "Premises"). The Company took possession of the Premises on November 1, 2019, with the term of the Lease ending 65 months after such date, unless terminated earlier (the "Term"). The initial base rent for the Premises is $6,410 per month for the first 17 months, increasing to $7,076 per month by the end of the Term. In addition, as long as the Company is not in default under the Lease, the Company shall be entitled to an abatement of its base rent for the first 5 months. In addition, the Company will pay its pro rata share of the Landlord's annual operating expenses associated with the premises, calculated as set forth in the Lease of which the Company is entitled to an abatement of these operating expense for the first 3 months. Prior to the October 2019 Lease, the Company entered into a non-cancellable facility lease for its operations and headquarters for an eleven-month term beginning on December 1, 2018. The monthly rent under that lease was $4,763. During the three months ended December 31, 2020 and 2019, rent expense associated with the facility leases amounted to $29,461 and $22,004, respectively. Supplemental cash flow information related to the operating lease was as follows: For the three months ended 2020 2019 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 19,231 $ — Right-of -use assets obtained in exchange for lease obligations: Operating leases — $ 335,119 Supplemental balance sheet information related to the operating lease was as follows: As of As of Right-of-use assets $ 268,932 $ 282,211 Lease liability $ 298,327 $ 312,176 Weighted average remaining lease term (years) 4.25 4.5 Weighted average discount rate 7.0 % 7.0 % Maturity of the lease liability was as follows: As of 2021 (period from January 1, 2021 to September 30, 2021) $ 58,654 2022 79,832 2023 81,827 2024 83,873 2025 42,454 Total lease payments 346,640 Less imputed interest (48,313 ) Total 298,327 Short-term portion (59,350 ) Long-term portion $ 238,977 |
Intangibles and Property and Eq
Intangibles and Property and Equipment | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles and Property and Equipment | NOTE 5 – Intangibles and Property and Equipment Intangibles Intangible assets rollforward is as follows: Useful Life Net Intangibles, September 30, 2020 12-13 years $ 156,523 Less: amortization (5,579 ) Net Intangibles, December 31, 2020 150,944 Amortization expense was $5,579 for the three months ended December 31, 2020 and 2019. Property and Equipment Property and equipment held for use by category are presented in the following table: As of As of Equipment and furniture $ 195,756 $ 195,756 Software 1,895 1,895 Total property and equipment 197,651 197,651 Less accumulated depreciation (44,777 ) (31,620 ) Property and equipment, net $ 152,874 $ 166,031 Depreciation expense was $13,157 and $4,319 for the three months ended December 31, 2020 and 2019, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | NOTE 6 - Accrued Expenses and Other Liabilities Accrued expenses consisted of the following at December 31, 2020 and September 30, 2020: As of As of Accrued payroll $ 282,253 $ 238,212 Operating lease liability, short term 59,350 57,848 Royalty Payments 52,144 — Accrued issuance costs — 50,400 Other 218,125 166,302 Total $ 611,872 $ 512,762 The "other" category is primarily comprised of board fees. Paycheck Protection Program The CARES Act, signed into law in March 2020, established the Paycheck Protection Program ("PPP"). The PPP authorizes over $600 billion in forgivable loans to small businesses. Loan amounts are forgiven to the extent proceeds are used to cover documented payroll, mortgage interest, rent, and utility costs over a 24-week measurement period following loan funding. There can be no assurance that this PPP loan will be forgiven. Loans have a maturity of 2 years and an interest rate of 1%. Prepayments may be made without penalty. In April 2020, the Company received loan funding of $83,333 under the PPP and was recorded as a long-term liability. Interest in connection with the PPP was nominal during the three months ended December 31, 2020. |
Zimmer Development Agreement
Zimmer Development Agreement | 3 Months Ended |
Dec. 31, 2020 | |
Zimmer Development Agreement [Abstract] | |
Zimmer Development Agreement | NOTE 7 – Zimmer Development Agreement On July 20, 2020, the Company entered into an exclusive development and distribution agreement (the "Development Agreement") with Zimmer, Inc. ("Zimmer"), pursuant to which the Company granted Zimmer exclusive global rights to distribute NeuroOne's strip and grid cortical electrodes (the "Strip/Grid Products") and electrode cable assembly products (the "Electrode Cable Assembly Products"). Additionally, the Company granted Zimmer the exclusive right and license to distribute certain depth electrodes developed by the Company ("SEEG Products", and together with the Strip/Grid Products and Electrode Cable Assembly Products, the "Products"). The parties have agreed to collaborate with respect to development activities under the Development Agreement through a joint development committee composed of an equal number of representatives of Zimmer and the Company. Under the terms of the Development Agreement, the Company will be responsible for all costs and expenses related to developing the Products, and Zimmer will be responsible for all costs and expenses related to the commercialization of the Products. In addition to the Development Agreement, Zimmer and the Company have entered into a Manufacturing and Supply Agreement (the "MS Agreement") and a supplier quality agreement (the "Quality Agreement") with respect to the manufacturing and supply of the Products. Except as otherwise provided in the Development Agreement, the Company will be responsible for performing all development activities, including non-clinical and clinical studies directed at obtaining regulatory approval of each Product. Zimmer has agreed to use commercially reasonable efforts to promote, market and sell each Product following the "Product Availability Date" (as defined in the Development Agreement) for such Product. Pursuant to the Development Agreement, Zimmer made an upfront initial exclusivity fee payment of $2.0 million (the "Initial Exclusivity Fee") to the Company. In addition, the Company is to receive the following fee payments (the "Interim Fee Bonus") upon reaching certain milestones: Scenario 1 ● Design freeze for the SEEG Products by November 30, 2020 - $500,000 ● Acceptance of all Deliverables for SEEG Products under the Development Plan (as defined in the Development Agreement) by April 30, 2021 - $500,000 Scenario 2: ● Acceptance of all Deliverables for SEEG Products under the Development Plan other than the Modified Connector by April 30, 2021 - $500,000 ● Acceptance of all Deliverables for SEEG Products under the Development Plan, including the Modified Connector by September 30, 2021 - $500,000 For purposes of the Development Agreement, each of the foregoing events shall have occurred only if the Company has demonstrated the achievement of the event to Zimmer's reasonable satisfaction. Notwithstanding the foregoing, the events in Sections 6.1(c)(ii), (iii) and (iv) of the Development Agreement shall not be deemed to be met if FDA Approval for the SEEG Products is not received prior to the applicable deadline. In addition to the Initial Exclusivity Fee and Interim Fee Bonus, in order to maintain the exclusivity of the SEEG Distribution License, Zimmer must pay the SEEG Exclusivity Maintenance Fee to the Company, on or prior to the SEEG Exclusivity Confirmation Date, in immediately available funds as follows: ● if the Product Availability Date for the SEEG Products occurs on or before June 30, 2021, then $3,000,000, plus the amount of any Interim Fee Bonuses earned pursuant to Section 6.1(c), including any such Interim Fee Bonus earned after June 30, 2021 pursuant to Section 6.1(c)(iv) following the delivery of a Design Modification Notice; ● if the Product Availability Date for the SEEG Products occurs after June 30, 2021, but on or before September 30, 2021, then $3,000,000, plus if Zimmer timely issues a Design A-9 Modification Notice, any Interim Fee Bonus earned pursuant to Section 6.1(c)(iv); ● if the Product Availability Date for the SEEG Products occurs after September 30, 2021, but on or before December 31, 2021, then $2,500,000; and ● if the Product Availability Date for the SEEG Products occurs after December 31, 2021, then $1,500,000. Notwithstanding any other provision of the Development Agreement, if the Product Availability Date for the SEEG Products has not occurred on or before June 30, 2022, Zimmer shall have the right to terminate the SEEG Distribution License by delivering written notice to the Company to that effect and, upon delivery of such notice, Zimmer shall be relieved of all of its obligations hereunder with respect to SEEG Products, including any obligation to pay the SEEG Exclusivity Maintenance Fee or to purchase, market, distribute or sell any SEEG Products. The Initial Exclusivity Fee and the SEEG Exclusivity Maintenance Fee (including any Interim Fee Bonus(es) Fess), once paid, are non-refundable. The Development Agreement will expire on the tenth anniversary of the date of the first commercial sale of the last of the Products to achieve a first commercial sale, unless terminated earlier pursuant to its terms. Either party may terminate the Development Agreement (x) with written notice for the other party's material breach following a cure period or (y) if the other party becomes subject to certain insolvency proceedings. In addition, Zimmer may terminate the Development Agreement for any reason with 90 days' written notice, and the Company may terminate the Development Agreement if Zimmer acquires or directly or indirectly owns a controlling interest in certain competitors of the Company. At inception of the Zimmer Development Agreement through December 31, 2020, the Company had identified three performance obligations under the Zimmer Development Agreement and consisted of the following: (1) the Company obligation to grant Zimmer access to its intellectual property; (2) complete SEEG Product development; and (3) complete Strip/Grid Product development. Accordingly, the Company recognized revenue in the amount of $22,274 related to the development of the Products completed during the period in connection with the Initial Exclusivity Fee payment. The Zimmer Development Agreement was accounted for under the provisions of ASC 606, Revenue from Contracts with Customers. A reconciliation of the closing balance of deferred revenue related to the Zimmer Development Agreement is as follows as of December 31, 2020: 2020 Deferred Revenue Balance as of beginning of period – September 30, 2020 $ 73,434 Revenue recognized (22,274 ) Balance as of end of period – December 31, 2020 $ 51,160 The remaining performance obligations reflected in deferred revenue as of December 31, 2020 are expected to be completed in the latter half of fiscal year 2021. Product Revenue In December 2020, the Company commenced commercial sales of its Strip/Grid Products and Electrode Cable Assembly Products in connection with the Development Agreement. Product revenue recognized during the three month period ended December 31, 2020 was $71,474. Advertising Expense Advertising expense is charged to selling, general and administrative expenses during the period that it is incurred. Total advertising expense amounted to $29,007 for the three month period ended December 31, 2020. Advertising expense during the prior year period was negligible. |
Convertible Promissory Notes an
Convertible Promissory Notes and Warrant Agreements | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes and Warrant Agreements | NOTE 8 - Convertible Promissory Notes and Warrant Agreements As of As of Paulson convertible notes, principal $ — $ 546,000 Accrued interest — 63,458 Fair value adjustments — 397,748 $ — $ 1,007,206 2019 Paulson Convertible Note Offering On November 1, 2019, the Company entered into a subscription agreement with certain accredited investors, pursuant to which the Company, in a private placement (the "2019 Paulson Private Placement"), agreed to issue and sell to the investors 13% convertible promissory notes (each, a "2019 Paulson Note" and collectively, the "2019 Paulson Notes") and warrants (each, a "2019 Paulson Warrant" and collectively, the "2019 Paulson Warrants") to purchase shares of the Company's common stock. The initial closing of the 2019 Paulson Private Placement was consummated on November 1, 2019, and, on that date and through December 3, 2019, the Company issued the 2019 Paulson Notes in an aggregate principal amount of $3,234,800 to the subscribers for gross proceeds equaling the principal amount. The 2019 Paulson Private Placement terminated on December 3, 2019. On April 24, 2020, the Company and holders of a majority in aggregate principal amount of the 2019 Paulson Notes entered into an amendment to the 2019 Paulson Notes (the "Second 2019 Paulson Notes Amendment") to, among other things: i. Extended the Maturity Date – ii. Revised Optional Conversion Terms – iii. Revise the Registration Date – The 2019 Paulson Notes had a fixed interest rate of 13% per annum and required the Company to repay the principal and accrued and unpaid interest thereon on November 1, 2020 (the "Maturity Date"). Interest on principal amounted to $5,701 and $53,875 during the three month period ended December 31, 2020 and 2019, respectively, and was recorded under the net valuation change of instruments measured at fair value in the condensed statements of operations. The subscriber, prior to the Second 2019 Paulson Notes Amendment, had the option to convert the outstanding principal and accrued and unpaid interest of such subscriber's 2019 Paulson Note (the "Outstanding Balance") into common stock in an amount equal to the Outstanding Balance divided by the ten day volume weighted average closing price of the common stock prior to conversion. In addition, both before and after the Second 2019 Paulson Note Amendment, if the Company raised more than $3,000,000 in an equity financing (the "Qualified Financing") before the Maturity Date, each subscriber had the option to convert the Outstanding Balance into the securities issued by the Company in such Qualified Financing in an amount equal to (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of securities issued by the Company in the Qualified Financing or (B) the ten day volume weighted average closing price of the common stock prior to the first closing of a Qualified Financing. If a change of control transaction had occurred prior to a Qualified Financing or the Maturity Date, the 2019 Paulson Notes would have become payable on demand as of the closing date of such transaction. Change of control meant a merger or consolidation with another entity in which the Company's stockholders did not own more than 50% of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the Company's assets. The Company elected to account for the 2019 Paulson Notes on a fair value basis under ASC 825 to comprehensively value and streamline the accounting for the embedded conversion options Each 2019 Paulson Warrant grants the holder the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied by (ii) the principal amount of such subscriber's 2019 Paulson Notes divided by 1.87, with an exercise price per share equal to $1.87. As of the final closing on December 3, 2019, the Company issued 2019 Paulson Warrants exercisable for 864,913 shares of common stock in connection with all closings of the 2019 Paulson Private Placement. The 2019 Paulson Warrants are immediately exercisable and expire on November 1, 2022. The exercise price is subject to adjustment in the event of any stock dividends or splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. The 2019 Paulson warrants were deemed to be a free-standing instrument and were accounted for as equity. Given that the fair value of the 2019 Paulson Notes exceeded the proceeds received at issuance, there was no value attributed to the 2019 Paulson Warrants in the condensed financial statements. Issuance costs during the three month period ended December 31, 2020 in connection with the 2019 Paulson Private Placement were $3,053 and related to legal costs. Issuance costs incurred during the three months ended December 31, 2019 were $865,567. During the first quarter of 2020, Paulson Investment Company ("Paulson") received a cash commission equal to 12% of the gross proceeds from the sale of the 2019 Paulson Notes which amounted to $388,176, and 10-year warrants to purchase an amount of Common Stock equal to 259,476 shares of common stock at an exercise price equal to $1.87 per share (the "Broker Warrants") at a fair value $419,635. Lastly, issuance costs during the first quarter of fiscal year 2020 included legal and third party fees in the amount of $57,756. The issuance costs during both periods were recorded as a component of interest in the accompanying statements of operations. During the first quarter of fiscal year 2021, the remaining holders of the 2019 Paulson Notes elected to convert the remaining outstanding principal and accrued and unpaid interest in the amount of $615,159 into 878,253 shares of common stock. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 9 – Stock-Based Compensation During the three month periods ended December 31, 2020 and 2019, stock-based expense related to stock-based awards amounted to $245,829 and $587,677, respectively, and was included in general and administrative and research and development costs as follows in the accompanying condensed statements of operations. 2020 2019 General and administrative $ 181,792 $ 563,768 Research and development 64,037 23,909 Total stock-based compensation expense $ 245,829 $ 587,677 Stock Options During the three month period ended December 31, 2020 and 2019, under the 2017 Equity Incentive Plan (the "2017 Plan"), the Company granted 125,000 and 800,000 stock options, respectively, to its employees, consultants and scientific advisory board members. Vesting generally occurs over an immediate to 48 month period based on a time of service condition although vesting acceleration is provided under one grant in the event that certain milestones are met. The grant date fair value of the grants issued during the three month periods ended December 31, 2020 and 2019 was $0.53 and $1.06 per share, respectively. The total expense for the three months ended December 31, 2020 and 2019 related to stock options was $100,147 and $438,083, respectively. The total number of stock options outstanding as of December 31, 2020 and September 30, 2020 was 1,603,485 and 1,478,485, respectively. The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three month period ended December 31, 2020 and 2019: 2020 2019 Expected stock price volatility 54.3 % 52.8 % Expected life of options (years) 5.8 5.7 Expected dividend yield 0 % 0 % Risk free interest rate 0.5 % 1.7 % During the three month periods ended December 31, 2020 and 2019, 215,326 and 375,830 stock options vested, and zero and 7,497 stock options were forfeited during these periods, respectively. Restricted Stock Units There were no restricted stock units ("RSUs") granted during the three months ended December 31, 2020 and 2019, and 25,144 and 10,503 RSUs vested during these periods, respectively. The total expense for the three months ended December 31, 2020 and 2019 related to these RSUs was $43,082 and $25,001, respectively. The number of RSUs forfeited during the three month periods ended December 31, 2020 and 2019 was zero and 7,003, respectively. Other Stock-Based Awards In August 2020, an additional consulting agreement was executed whereby 120,000 shares of common stock were issued, subject to Company repurchase. The stock award under the agreement vests over a six-month period. As of December 31, 2020, 80,000 shares were vested under this agreement of which 60,000 shares vested during the first quarter of fiscal year 2021. Compensation expense related to the stock awards granted under this consulting agreement amounted to $102,600 for the three month ended December 31, 2020 and was included in the total stock-based expense. In October 2019, two consulting agreements were executed whereby up to 115,000 shares of common stock were issuable of which 90,000 shares of common stock were issued and 60,000 shares were vested as of December 31, 2019 under these agreements. Vesting was based on a time-based vesting condition ranged over a three to nine month period commencing upon the execution of the consulting agreements. Compensation expense related to the stock awards granted under these consulting agreements amounted to $124,593 and was included in the total stock-based expense referenced above for the three month period ended December 31, 2019. The expense was based on the fair value of the underlying common stock at the point of vesting which ranged from $2.00 to $2.65 per share. General As of December 31, 2020, 1,714,400 shares were available for future issuance on a combined basis under the 2016 Equity Incentive Plan and 2017 Plan. Unrecognized stock-based compensation was $666,127 as of December 31, 2020. The unrecognized share-based expense is expected to be recognized over a weighted average period of 1.9 years. |
Concentrations
Concentrations | 3 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 10 – Concentrations Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash. The Company's cash is held by one financial institution in the United States. Amounts on deposit may at times exceed federally insured limits. The Company has not experienced any losses on its deposits since inception, and management believes that minimal credit risk exists with respect to these financial institutions. As of December 31, 2020, the Company had $6,889,912 of deposits in excess of federally insured amounts. Revenue One customer accounts for all of the Company's product and collaborations revenue. Supplier concentration One contract manufacturer produces all of the Company's Strip/Grid Products. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 – Income Taxes The effective tax rate for the three months ended December 31, 2020 and 2019 was zero percent. As a result of the analysis of all available evidence as of December 31, 2020 and September 30, 2020, the Company recorded a full valuation allowance on its net deferred tax assets. Consequently, the Company reported no income tax benefit during the three months ended December 31, 2020 and 2019. If the Company's assumptions change and the Company believes that it will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of future income tax expense. If the assumptions do not change, each period the Company could record an additional valuation allowance on any increases in the deferred tax assets. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | NOTE 12 – Stockholders' Deficit 2021 Private Placement On January 12, 2021, the Company entered into a common stock and warrant purchase agreement with certain accredited investors pursuant to which the Company, in a private placement (the "2021 Private Placement"), agreed to issue and sell an aggregate of 12,500,000 shares of the common stock and warrants to purchase an aggregate of 12,500,000 shares of common stock resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering expenses. See Note 13 – Subsequent Events. 2019 Common Stock Offering On October 23, 2019, the Company entered into Securities Purchase Agreements with certain accredited investors, pursuant to which the Company, in a private placement, has issued and sold 141,666 shares of the Company's common stock to the accredited investors at a price of $1.80 per share, for gross proceeds amounting to $255,000. The Company filed a registration statement with the SEC covering the resale of the shares of common stock sold in the private placement on August 11, 2020. Warrant Activity and Summary The following table summarizes warrant activity during the three month period ended December 31, 2020: Exercise Weighted Weighted Warrants Per Warrant Exercise Price Term (years) Outstanding and exercisable at September 30, 2020 10,170,588 $ 1.80 - 3.00 $ 2.35 2.89 Issued — $ — $ — — Exercised — $ — $ — — Forfeited — $ — $ — — Outstanding and exercisable at December 31, 2020 10,170,588 $ 1.80 - 3.00 $ 2.35 2.64 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – Subsequent Events 2017 Plan Evergreen Provision Under the 2017 Plan, the shares reserved automatically increase on January 1st of each year, for a period of not more than ten years from the date the 2017 Plan is approved by the stockholders of the Company, commencing on January 1, 2019 and ending on (and including) January 1, 2027, to an amount equal to 13% of the fully-diluted shares outstanding as of December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding sentence. "Fully Diluted Shares" as of a date means an amount equal to the number of shares of common stock (i) outstanding and (ii) issuable upon exercise, conversion or settlement of outstanding awards under the 2017 Plan and any other outstanding options, warrants or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable for shares of common stock, in each case as of the close of business of the Company on December 31 of the preceding calendar year. On January 1, 2021, 1,453,867 shares were added to the 2017 Plan as a result of the evergreen provision. 2021 Private Placement On January 12, 2021, the Company entered into a Common Stock and Warrant Purchase Agreement (the "2021 Purchase Agreement") with certain accredited investors (the "Purchasers"), pursuant to which the Company, in the 2021 Private Placement, agreed to issue and sell an aggregate of 12,500,000 shares (the "Shares") of the common stock of the Company, par value $0.001 per share (the "Common Stock"), and warrants to purchase an aggregate of 12,500,000 shares of Common Stock (the "2021 Warrants") at an aggregate purchase price of $1.00 per share of Common Stock and corresponding warrant, resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering expenses. The 2021 Warrants have an initial exercise price of $1.75 per share. The 2021 Warrants are exercisable beginning on the date of issuance and will expire on the fifth anniversary of such date. Prior to expiration, subject to the terms and conditions set forth in the 2021 Warrants, the holders of such 2021 Warrants may exercise the 2021 Warrants for Warrant Shares by providing notice to the Company and paying the exercise price per share for each share so exercised or by utilizing the "cashless exercise" feature contained in each 2021 Warrant. The 2021 Private Placement closed on January 14, 2021.The Company received $5,000,000 of the 2021 Private Placement proceeds on December 31, 2020. Stock-Based Awards On January 1, 2021, the Company granted 180,000 stock options to an executive officer at an exercise price of $1.57 per share under the 2017 Plan. The stock options vest over a four year period. On January 27, 2021, the Company granted 1,560,000 stock options to four employees, including three executive officers at an exercise price of $1.99 per share under the 2017 Plan. All of the stock options vest over a four year period, except that 250,000 stock options granted to our Chief Executive Officer vest upon certain performance objectives. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Management's Use of Estimates | Management's Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, primarily in connection with the convertible promissory notes, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company entered into a development and distribution agreement which has current and future revenue recognition implications. See Note 7 – Zimmer Development Agreement. Product Revenue Revenues from product sales are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. At the inception of each contract, performance obligations are identified and the total transaction price is allocated to the performance obligations. The Company commenced commercial sales of cEEG strip/grid and electrode cable assembly products in the first quarter of fiscal year 2021. Cost of Product Revenue Cost of product revenue consists of the manufacturing and materials costs incurred by the Company's third-party contract manufacturer in connection with Strip/Grid Products and outside supplier materials costs in connection with the Electrode Cable Assembly Products. In addition, cost of product revenue includes royalty fees incurred in connection with the Company's license agreements. Collaborations Revenue In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. Performance obligations may include license rights, development services, and services associated with regulatory submission and approval processes. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation. Licenses of intellectual property Milestone payments Royalties |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company's accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board ("FASB") fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. As of December 31, 2020 and September 30, 2020, the fair values of cash, accounts receivable, inventory, prepaid expenses, other assets, accounts payable and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the convertible notes while outstanding during the three months ended December 31, 2020 and 2019 were based on both the fair value of our common stock, discount associated with the embedded redemption features, and cash flow models discounted at current implied market rates evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments and are based on Level 3 inputs. There were no transfers between fair value hierarchy levels during the three months ended December 31, 2020 and 2019. The fair value of financial instruments measured on a recurring basis is as follows: As of Description Total Level 1 Level 2 Level 3 Liabilities: Convertible Notes $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — As of Description Total Level 1 Level 2 Level 3 Liabilities: Convertible Notes $ 1,007,206 $ — $ — $ 1,007,206 Total liabilities at fair value $ 1,007,206 $ — $ — $ 1,007,206 The following table provides a roll-forward of the convertible notes at fair value on a recurring basis using unobservable level 3 inputs for the three months ended December 31 as follows: 2020 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Change in fair value including accrued interest (1,974 ) Conversion of convertible promissory notes to common stock (1,005,232 ) Balance as of end of period – December 31, 2020 $ — 2019 Convertible notes Balance as of beginning of period – September 30, 2019 $ — Fair value attributed to convertible promissory notes upon issuance 5,066,740 Fair value attributed to note extinguishment 125,574 Balance as of end of period –December 31, 2019 $ 5,192,314 |
Intellectual Property | Intellectual Property The Company has entered into two licensing agreements with major research institutions, which allows for access to certain patented technology and know-how. Payments under those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired technology. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost and reduced by accumulated depreciation. Depreciation expense is recognized over the estimated useful lives of the assets using the straight-line method. The estimated useful life for equipment and furniture ranges from three to seven years and three years for software. Tangible assets acquired for research and development activities and that have alternative use are capitalized over the useful life of the acquired asset. Estimated useful lives are periodically reviewed, and, when appropriate, changes are made prospectively. Software purchased for internal use consists primarily of amounts paid for perpetual licenses to third-party software providers and installation costs. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Maintenance and repairs are charged directly to expense as incurred. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts The Company records a provision for doubtful accounts, when appropriate, based on historical experience and a detailed assessment of the collectability of its accounts receivable. In estimating the allowance for doubtful accounts, the Company considers, among other factors, the aging of the accounts receivable, its historical write-offs, the credit worthiness of each customer, and general economic conditions. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be recovered. Actual write-offs may be in excess of the Company's estimated allowance. |
Inventories | Inventories Inventories are stated at the lower of cost (using the first-in, first-out "FIFO" method) or net realizable value. The Company calculates inventory valuation adjustments for excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives, and estimated future demand of the products and spare parts. The Company's inventory is currently comprised of cEEG strip/grid and electrode cable assembly finished good product. The strip/ grid products are produced by a third-party contract manufacturer and the electrode cable assembly products are obtained from outside suppliers. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets, which consist of licensed intellectual property and property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred. Research and development expenses may include costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees, and other external costs. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with Accounting Standards Codification (ASC) 730, Research and Development |
Selling, General and Administrative | Selling, General and Administrative Selling, general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with research and development activities. Other significant costs include legal fees relating to corporate matters, intellectual property costs, professional fees for consultants assisting with regulatory, clinical, product development, financial matters, and beginning in the first quarter of fiscal year 2021, sales and marketing in connection with the commercial sale of cEEG strip/grid and electrode cable assembly products. |
Income Taxes | Income Taxes For the Company, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. |
Net Loss Per Share | Net Loss Per Share For the Company, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company's convertible promissory notes, warrants, stock options and restricted stock units while outstanding are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the warrants, stock options and restricted stock units. Diluted earnings with respect to the convertible promissory utilize the if-converted method. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for the three months ended December 31, 2020 and 2019. The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three months ended December 31, 2020 and 2019: 2020 2019 Warrants 10,170,588 8,389,987 Stock options 1,603,485 1,595,818 Restricted stock units 54,952 14,006 Convertible notes — 1,336,472 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . ● Removals: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. ● Modifications: for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee's assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. ● Additions: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should all be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date. The Company adopted the new guidance on October 1, 2020 and it did not have a material impact on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The ASU is effective for fiscal years beginning after December 15, 2020. The Company does not expect that the adoption of this new guidance will have a material impact on the Company's financial statements and plans to adopt this guidance on a prospective basis for the provisions applicable to the Company. In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which, among other things, provides guidance on how to account for contracts on an entity's own equity. This ASU eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity's own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, this ASU modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in this ASU are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of fair value of financial instruments measured on a recurring basis | As of Description Total Level 1 Level 2 Level 3 Liabilities: Convertible Notes $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — As of Description Total Level 1 Level 2 Level 3 Liabilities: Convertible Notes $ 1,007,206 $ — $ — $ 1,007,206 Total liabilities at fair value $ 1,007,206 $ — $ — $ 1,007,206 |
Schedule of convertible notes at fair value on a recurring basis using unobservable level 3 inputs | 2020 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Change in fair value including accrued interest (1,974 ) Conversion of convertible promissory notes to common stock (1,005,232 ) Balance as of end of period – December 31, 2020 $ — 2019 Convertible notes Balance as of beginning of period – September 30, 2019 $ — Fair value attributed to convertible promissory notes upon issuance 5,066,740 Fair value attributed to note extinguishment 125,574 Balance as of end of period –December 31, 2019 $ 5,192,314 |
Schedule of computation of diluted net loss per share | 2020 2019 Warrants 10,170,588 8,389,987 Stock options 1,603,485 1,595,818 Restricted stock units 54,952 14,006 Convertible notes — 1,336,472 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of supplemental cash flow information related to the operating lease | For the three months ended 2020 2019 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 19,231 $ — Right-of -use assets obtained in exchange for lease obligations: Operating leases — $ 335,119 |
Summary of Supplemental balance sheet information related to the operating lease | As of As of Right-of-use assets $ 268,932 $ 282,211 Lease liability $ 298,327 $ 312,176 Weighted average remaining lease term (years) 4.25 4.5 Weighted average discount rate 7.0 % 7.0 % |
Summary of Maturity of the lease liability | As of 2021 (period from January 1, 2021 to September 30, 2021) $ 58,654 2022 79,832 2023 81,827 2024 83,873 2025 42,454 Total lease payments 346,640 Less imputed interest (48,313 ) Total 298,327 Short-term portion (59,350 ) Long-term portion $ 238,977 |
Intangibles and Property and _2
Intangibles and Property and Equipment (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Useful Life Net Intangibles, September 30, 2020 12-13 years $ 156,523 Less: amortization (5,579 ) Net Intangibles, December 31, 2020 150,944 |
Schedule of property and equipment | As of As of Equipment and furniture $ 195,756 $ 195,756 Software 1,895 1,895 Total property and equipment 197,651 197,651 Less accumulated depreciation (44,777 ) (31,620 ) Property and equipment, net $ 152,874 $ 166,031 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | As of As of Accrued payroll $ 282,253 $ 238,212 Operating lease liability, short term 59,350 57,848 Royalty Payments 52,144 — Accrued issuance costs — 50,400 Other 218,125 166,302 Total $ 611,872 $ 512,762 |
Zimmer Development Agreement (T
Zimmer Development Agreement (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Zimmer Development Agreement [Abstract] | |
Schedule of deferred revenue | 2020 Deferred Revenue Balance as of beginning of period – September 30, 2020 $ 73,434 Revenue recognized (22,274 ) Balance as of end of period – December 31, 2020 $ 51,160 |
Convertible Promissory Notes _2
Convertible Promissory Notes and Warrant Agreements (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of convertible promissory notes and warrant agreements | As of As of Paulson convertible notes, principal $ — $ 546,000 Accrued interest — 63,458 Fair value adjustments — 397,748 $ — $ 1,007,206 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | 2020 2019 General and administrative $ 181,792 $ 563,768 Research and development 64,037 23,909 Total stock-based compensation expense $ 245,829 $ 587,677 |
Schedule of weighted-average assumptions used black-scholes option-pricing model | 2020 2019 Expected stock price volatility 54.3 % 52.8 % Expected life of options (years) 5.8 5.7 Expected dividend yield 0 % 0 % Risk free interest rate 0.5 % 1.7 % |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Exercise Weighted Weighted Warrants Per Warrant Exercise Price Term (years) Outstanding and exercisable at September 30, 2020 10,170,588 $ 1.80 - 3.00 $ 2.35 2.89 Issued — $ — $ — — Exercised — $ — $ — — Forfeited — $ — $ — — Outstanding and exercisable at December 31, 2020 10,170,588 $ 1.80 - 3.00 $ 2.35 2.64 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Apr. 30, 2020 | Dec. 31, 2020 | |
Description of Business and Basis of Presentation (Textual) | ||
Funding loan received | $ 83,333 | |
Non-cash lease expense, description | ● an addition of non-cash lease expense of $9,870; ● a decrease in the change in prepaid and other assets of $325,248, bringing the previously reported balance of ($332,075) to a revised balance of ($6,827); and ● a decrease in the change in accrued expenses, deferred revenue, operating lease and other liabilities of $335,118, bringing the previously reported balance of $323,639 to a revised balance, net of the $6,669 reclassification of accounts payable described above, to ($18,148). |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Liquidity and Capital Resources (Textual) | ||
Accumulated deficit | $ 32,838,511 | $ 30,879,031 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Liabilities: | ||
Convertible Notes | $ 1,007,206 | |
Total liabilities at fair value | 1,007,206 | |
Level 1 [Member] | ||
Liabilities: | ||
Convertible Notes | ||
Total liabilities at fair value | ||
Level 2 [Member] | ||
Liabilities: | ||
Convertible Notes | ||
Total liabilities at fair value | ||
Level 3 [Member] | ||
Liabilities: | ||
Convertible Notes | 1,007,206 | |
Total liabilities at fair value | $ 1,007,206 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - Convertible Notes [Member] - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Convertible notes | ||
Balance as of beginning of period | $ 1,007,206 | |
Change in fair value including accrued interest | (1,974) | |
Conversion of convertible promissory notes to common stock | (1,005,232) | |
Fair value attributed to convertible promissory notes upon issuance | 5,066,740 | |
Fair value attributed to note extinguishment | 125,574 | |
Balance as of end of period | $ 5,192,314 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive computation of diluted net loss per share | 10,170,588 | 8,389,987 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive computation of diluted net loss per share | 1,603,485 | 1,595,818 |
Restricted stock units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive computation of diluted net loss per share | 54,952 | 14,006 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive computation of diluted net loss per share | 1,336,472 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended |
Dec. 31, 2020Agreements | |
Summary of Significant Accounting Policies (Textual) | |
Number of licencing agreements | 2 |
Equipment [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Textual) | |
Estimated useful life | 3 years |
Equipment [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Textual) | |
Estimated useful life | 7 years |
Software [Member] | |
Summary of Significant Accounting Policies (Textual) | |
Estimated useful life | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liability: | ||
Operating cash flows from operating leases | $ 19,231 | |
Right-of -use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 335,119 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-use assets | $ 268,932 | $ 282,211 |
Lease liability | $ 298,327 | $ 312,176 |
Weighted average remaining lease term (years) | 4 years 2 months 30 days | 4 years 6 months |
Weighted average discount rate | 7.00% | 7.00% |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 (period from January 1, 2021 to September 30, 2021) | $ 58,654 |
2022 | 79,832 |
2023 | 81,827 |
2024 | 83,873 |
2025 | 42,454 |
Total lease payments | 346,640 |
Less imputed interest | (48,313) |
Total | 298,327 |
Short-term portion | (59,350) |
Long-term portion | $ 238,977 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Textual) - USD ($) | Oct. 12, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 01, 2019 |
Other Commitments [Line Items] | ||||
Royalty payments - 2020 | $ 50,000 | |||
Royalty payments - 2021 | 100,000 | |||
Royalty payments - 2022 | $ 150,000 | |||
Latest expiration date of licensed patent | Dec. 31, 2030 | |||
Court awarded | $ 185,000 | |||
Facility lease term | 65 months | |||
Lease rent expense, description | Prior to the October 2019 Lease, the Company entered into a non-cancellable facility lease for its operations and headquarters for an eleven-month term beginning on December 1, 2018. The monthly rent under that lease was $4,763. | |||
Facility lease agreement, description | On October 7, 2019, the Company entered into a non-cancellable lease agreement (the “Lease”) with Biynah Cleveland, LLC, BIP Cleveland, LLC, and Edenvale Investors (together, the “Landlord”) pursuant to which the Company has agreed to lease office space located at 7599 Anagram Drive, Eden Prairie, Minnesota (the “Premises”). The Company took possession of the Premises on November 1, 2019, with the term of the Lease ending 65 months after such date, unless terminated earlier (the “Term”). The initial base rent for the Premises is $6,410 per month for the first 17 months, increasing to $7,076 per month by the end of the Term. In addition, as long as the Company is not in default under the Lease, the Company shall be entitled to an abatement of its base rent for the first 5 months. In addition, the Company will pay its pro rata share of the Landlord’s annual operating expenses associated with the premises, calculated as set forth in the Lease of which the Company is entitled to an abatement of these operating expense for the first 3 months. | |||
Monthly lease rent | $ 4,763 | |||
Rent expense | $ 29,461 | $ 22,004 | ||
Mayo Agreement [Member] | ||||
Other Commitments [Line Items] | ||||
License and development agreement expiration date | May 25, 2037 | |||
Royalty payments | $ 2,144 | |||
Wade Fredrickson [Member] | ||||
Other Commitments [Line Items] | ||||
Court awarded | $ 145,000 | |||
Minimum [Member] | ||||
Other Commitments [Line Items] | ||||
Royalty payments | $ 50,000 |
Intangibles and Property and _3
Intangibles and Property and Equipment (Details) | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning Balance | $ 156,523 |
Less: amortization | (5,579) |
Ending Balance | $ 150,944 |
Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 12 years |
Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 13 years |
Intangibles and Property and _4
Intangibles and Property and Equipment (Details 1) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Equipment and furniture | $ 195,756 | $ 195,756 |
Software | 1,895 | 1,895 |
Total property and equipment | 197,651 | 197,651 |
Less accumulated depreciation | (44,777) | (31,620) |
Property and equipment, net | $ 152,874 | $ 166,031 |
Intangibles and Property and _5
Intangibles and Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Intangibles and Property and Equipment (Textual) | ||
Depreciation expense | $ 13,157 | $ 4,319 |
Amortization expense | $ 5,579 | $ 5,579 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 282,253 | $ 238,212 |
Operating lease liability, short term | 59,350 | 57,848 |
Royalty Payments | 52,144 | |
Accrued issuance costs | 50,400 | |
Other | 218,125 | 166,302 |
Total | $ 611,872 | $ 512,762 |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities (Details Textual) | 1 Months Ended |
Mar. 31, 2020 | |
Paycheck Protection Program [Member] | |
Paycheck protection program, description | The PPP authorizes over $600 billion in forgivable loans to small businesses. Loan amounts are forgiven to the extent proceeds are used to cover documented payroll, mortgage interest, rent, and utility costs over a 24-week measurement period following loan funding. There can be no assurance that this PPP loan will be forgiven. Loans have a maturity of 2 years and an interest rate of 1%. Prepayments may be made without penalty. In April 2020, the Company received loan funding of $83,333 under the PPP and was recorded as a long-term liability. Interest in connection with the PPP was nominal during the three months ended December 31, 2020. |
Zimmer Development Agreement (D
Zimmer Development Agreement (Details) | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Deferred Revenue | |
Balance as of beginning of period - September 30, 2020 | $ 73,434 |
Revenue recognized | (22,274) |
Balance as of end of period - December 31, 2020 | $ 51,160 |
Zimmer Development Agreement _2
Zimmer Development Agreement (Details Textual) | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Zimmer Development Agreement (Textual) | |
Initial fee payment | $ 2,000,000 |
Total advertising expense | 29,007 |
Development Agreement [Member] | |
Zimmer Development Agreement (Textual) | |
Product revenue recognized | 71,474 |
Development Agreement [Member] | November 30, 2020 [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 500,000 |
Development Agreement [Member] | April 30, 2021 [Member] | Scenario One [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 500,000 |
Development Agreement [Member] | Modified Connector by April 30, 2021 [Member] | Scenario Two [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 500,000 |
Development Agreement [Member] | Modified Connector by September 30, 2021 [Member] | Scenario Two [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 500,000 |
Development Agreement [Member] | On or before June 30, 2021 [Member] | Scenario One [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 3,000,000 |
Development Agreement [Member] | After June 30, 2021, but on or before September 30, 2021 [Member] | Scenario Two [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 3,000,000 |
Development Agreement [Member] | After September 30, 2021, but on or before December 31, 2021 [Member] | Scenario Two [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | 2,500,000 |
Development Agreement [Member] | After December 31, 2021 [Member] | Scenario Two [Member] | |
Zimmer Development Agreement (Textual) | |
Future potential milestone payments to Neuroone | $ 1,500,000 |
Convertible Promissory Notes _3
Convertible Promissory Notes and Warrant Agreements (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Debt Disclosure [Abstract] | ||
Paulson convertible notes, principal | $ 546,000 | |
Accrued interest | 63,458 | |
Fair value adjustments | 397,748 | |
Total | $ 1,007,206 |
Convertible Promissory Notes _4
Convertible Promissory Notes and Warrant Agreements (Details Textual) - USD ($) | Dec. 03, 2019 | Apr. 24, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 01, 2019 |
Convertible Promissory Notes and Warrant Agreements (Textual) | |||||
Net valuation change of instruments measured at fair value benefit | $ 1,974 | $ (125,574) | |||
Paulson Private Placement [Member] | Common Stock [Member] | |||||
Convertible Promissory Notes and Warrant Agreements (Textual) | |||||
Warrants exercise price | $ 1.87 | ||||
Warrants to purchase of common stock shares | 259,476 | ||||
Fair value of warrants | $ 419,635 | ||||
Legal and third party fee | 57,756 | ||||
Principal and interest converted into common stock during the period | $ 615,159 | ||||
Issuance of common stock | 878,253 | ||||
2019 Paulson Private Placement [Member] | |||||
Convertible Promissory Notes and Warrant Agreements (Textual) | |||||
Convertible notes bear interest at fixed rate | 13.00% | ||||
Legal costs | $ 3,053 | ||||
Issuance cost | 865,567 | ||||
Cash commission paid | $ 388,176 | ||||
Paulson Convertible Note Offering [Member] | |||||
Convertible Promissory Notes and Warrant Agreements (Textual) | |||||
Convertible notes bear interest at fixed rate | 13.00% | ||||
Principal amount | $ 3,234,800 | ||||
Extended maturity date, description | The Second 2019 Paulson Notes Amendment extended the maturity date of the 2019 Paulson Notes from May 1, 2020 to November 1, 2020 (in either case, unless a change of control transaction happens prior to such date). | ||||
Revised optional conversion terms, description | (1) the Outstanding Balance as defined below of such subscriber's 2019 Paulson Note elected by the subscriber to be converted divided by (2) an amount equal to 0.6 multiplied by the volume weighted average price of the common stock for the ten (10) trading days immediately preceding the date of conversion. | ||||
Maturity date | May 1, 2020 | ||||
Interest on principal amount | $ 5,701 | 53,875 | |||
Interest expense related to excess of fair value over proceeds at issuance | 1,831,940 | ||||
Warrants exercise price | $ 1.87 | ||||
Warrants exercisable date of issuance and expire | Nov. 1, 2022 | ||||
Warrants, description | (i) 0.5 multiplied by (ii) the principal amount of such subscriber’s 2019 Paulson Notes divided by 1.87, with an exercise price per share equal to $1.87. | ||||
Warrants to purchase of common stock shares | 864,913 | ||||
Paulson Convertible Note Offering [Member] | Qualified Financing [Member] | |||||
Convertible Promissory Notes and Warrant Agreements (Textual) | |||||
Gross proceeds of equity qualified financing | $ 3,000,000 | ||||
Equity qualified financing, description | (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of securities issued by the Company in the Qualified Financing or (B) the ten day volume weighted average closing price of the common stock prior to the first closing of a Qualified Financing. If a change of control transaction had occurred prior to a Qualified Financing or the Maturity Date, the 2019 Paulson Notes would have become payable on demand as of the closing date of such transaction. | ||||
Description of maximum voting power of surviving entity | Change of control meant a merger or consolidation with another entity in which the Company's stockholders did not own more than 50% of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the Company's assets. | ||||
Net valuation change of instruments measured at fair value benefit | $ (1,974) | ||||
Net valuation expense change in fair value | $ 125,574 | ||||
2019 Paulson Private Placement [Member] | |||||
Convertible Promissory Notes and Warrant Agreements (Textual) | |||||
Cash commission percentage rate on proceeds | 12.00% | ||||
Warrant term | 10 years |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 245,829 | $ 587,677 |
General and administrative [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 181,792 | 563,768 |
Research and development [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 64,037 | $ 23,909 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) - Stock Options [Member] | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Offsetting Assets [Line Items] | ||
Expected stock price volatility | 54.30% | 52.80% |
Expected life of options (years) | 5 years 9 months 18 days | 5 years 8 months 12 days |
Expected dividend yield | 0.00% | 0.00% |
Risk free interest rate | 0.50% | 1.70% |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details Textual) - USD ($) | 3 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Aug. 31, 2020 | Oct. 31, 2019 | |
Stock-Based Compensation (Textual) | |||||
Stock options vested | 215,326 | 375,830 | |||
Stock options forfeited | 7,497 | 7,497 | |||
Unrecognized stock-based compensation | $ 666,127 | ||||
Unrecognized share-based expense is expected to be recognized over a weighted average period | 1 year 10 months 25 days | ||||
Total number of stock options outstanding | 1,603,485 | 1,478,485 | |||
Stock-based expense | $ 245,829 | $ 587,677 | |||
Grant date fair value | $ 0.53 | $ 1.06 | |||
Portion of stock-based expense attributed to stock options | $ 100,147 | $ 438,083 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Stock-Based Compensation (Textual) | |||||
RSUs forfeited shares | 7,003 | 7,003 | |||
Restricted stock units vested | 25,144 | 10,503 | |||
Portion of stock-based expense attributed to restricted stock units | $ 43,082 | $ 25,001 | |||
Two consulting agreements [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Compensation expense related to the stock awards | $ 124,593 | ||||
Common stock issued | 90,000 | ||||
Common stock issuable shares | 115,000 | ||||
Common stock vested during period | 60,000 | ||||
Two consulting agreements [Member] | Minimum [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Fair value of common stock price per share | $ 2 | ||||
Two consulting agreements [Member] | Maximum [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Fair value of common stock price per share | $ 2.65 | ||||
Consulting agreements [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Compensation expense related to the stock awards | $ 102,600 | ||||
Stock awards vested under contract | 80,000 | ||||
Common stock issued | 120,000 | ||||
Common stock vested during period | 60,000 | ||||
2016 and 2017 Equity Incentive Plan [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Shares available for future grant issuance | 1,714,400 | ||||
2017 Equity Incentive Plan [Member] | |||||
Stock-Based Compensation (Textual) | |||||
Number of options, granted | 125,000 | 800,000 |
Concentrations (Details)
Concentrations (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Concentrations (Textual) | |
Excess of the amount insured by the FDIC | $ 6,889,912 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - Warrant [Member] | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Warrants, Outstanding and exercisable, Beginning | shares | 10,170,588 |
Issued | shares | |
Exercised | shares | |
Forfeited | shares | |
Warrants, Outstanding and exercisable, Ending | shares | 10,170,588 |
Exercise Price Per Warrant, Issued | |
Exercise Price Per Warrant, Exercised | |
Exercise Price Per Warrant, Forfeited | |
Weighted Average Exercise Price, Outstanding and exercisable, Beginning | 2.35 |
Weighted Average Exercise Price, Issued | |
Weighted Average Exercise Price, Exercised | |
Weighted Average Exercise Price, Forfeited | |
Weighted Average Exercise Price, Outstanding and exercisable, Ending | $ 2.35 |
Outstanding, Weighted Average Term (years), Beginning | 2 years 10 months 21 days |
Outstanding, Weighted Average Term (years), Issued | 0 years |
Outstanding, Weighted Average Term (years), Exercised | 0 years |
Outstanding, Weighted Average Term (years), Forfeited | 0 years |
Outstanding, Weighted Average Term (years), Ending | 2 years 7 months 21 days |
Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price Per Warrant, Outstanding and exercisable, Beginning | $ 1.80 |
Exercise Price Per Warrant, Outstanding and exercisable, Ending | 1.80 |
Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price Per Warrant, Outstanding and exercisable, Beginning | 3 |
Exercise Price Per Warrant, Outstanding and exercisable, Ending | $ 3 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Textual) - USD ($) | Jan. 12, 2021 | Oct. 23, 2019 |
2019 Common Stock Offering [Member] | ||
Stockholders' Deficit (Textual) | ||
Shares issue and sell under private placement | 141,666 | |
Gross proceeds from private placement | $ 255,000 | |
Offering price, per share | $ 1.80 | |
2021 Private Placement [Member] | Subsequent Event [Member] | ||
Stockholders' Deficit (Textual) | ||
Gross proceeds from private placement | $ 12,500,000 | |
2021 Private Placement [Member] | Common Stock [Member] | Subsequent Event [Member] | ||
Stockholders' Deficit (Textual) | ||
Shares issue and sell under private placement | 12,500,000 | |
2021 Private Placement [Member] | Warrant [Member] | Subsequent Event [Member] | ||
Stockholders' Deficit (Textual) | ||
Aggregate number of warrants purchase | 12,500,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 27, 2021 | Jan. 12, 2021 | Jan. 02, 2021 | Dec. 31, 2020 |
2021 Purchase Agreement [Member] | ||||
Subsequent Events (Textual) | ||||
Private placement proceeds received in advance | $ 5,000,000 | |||
Subsequent Event [Member] | 2021 Purchase Agreement [Member] | ||||
Subsequent Events (Textual) | ||||
Aggregate share issued | 12,500,000 | |||
Common stock per share | $ 0.001 | |||
Purchase of warrants | 12,500,000 | |||
Purchase price | $ 1 | |||
Total gross proceeds | $ 12,500,000 | |||
Initial exercise price | $ 1.75 | |||
Subsequent Event [Member] | 2017 Plan [Member] | ||||
Subsequent Events (Textual) | ||||
Shares issued | 1,453,867 | |||
Stock options granted to subject to performance conditions | 250,000 | |||
Number of options, granted | 1,560,000 | 180,000 | ||
Exercise price | $ 1.99 | $ 1.57 | ||
Service period vesting | 4 years |