Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 13, 2021 | Mar. 31, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | NEUROONE MEDICAL TECHNOLOGIES Corp | ||
Trading Symbol | NMTC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Common Stock, Shares Outstanding | 16,187,722 | ||
Entity Public Float | $ 82,500,000 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001500198 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Sep. 30, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-40439 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-0863354 | ||
Entity Address, Address Line One | 7599 Anagram Dr. | ||
Entity Address, City or Town | Eden Prairie | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55344 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
City Area Code | 952 | ||
Local Phone Number | 426-1383 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash | $ 6,901,346 | $ 4,036,397 |
Accounts receivable | 48,336 | |
Inventory | 98,287 | |
Prepaid and other assets | 244,043 | 118,611 |
Total current assets | 7,292,012 | 4,155,008 |
Intangible assets, net | 134,207 | 156,523 |
Right-of-use asset | 288,948 | 282,211 |
Property and equipment, net | 223,329 | 166,031 |
Total assets | 7,938,496 | 4,759,773 |
Current liabilities: | ||
Accounts payable | 528,829 | 762,538 |
Accrued expenses | 644,249 | 512,762 |
Convertible promissory notes (Note 8) | 1,007,206 | |
Deferred revenue | 8,622 | 73,434 |
Total current liabilities | 1,181,700 | 2,355,940 |
Operating lease liability, long term | 202,895 | 254,328 |
Other liabilities | 83,333 | |
Total liabilities | 1,384,595 | 2,693,601 |
Commitments and contingencies (Note 4) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of September 30, 2021 and 2020; no shares issued or outstanding as of September 30, 2021 and 2020. | ||
Common stock, $0.001 par value; 100,000,000 shares authorized as of September 30, 2021 and 2020; 12,010,019 and 7,393,637 shares issued and outstanding as of September 30, 2021 and 2020, respectively. | 35,834 | 22,181 |
Additional paid–in capital | 47,345,266 | 32,923,022 |
Accumulated deficit | (40,827,199) | (30,879,031) |
Total stockholders’ equity | 6,553,901 | 2,066,172 |
Total liabilities and stockholders’ equity | $ 7,938,496 | $ 4,759,773 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 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 (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 12,010,019 | 7,393,637 |
Common stock, shares outstanding | 12,010,019 | 7,393,637 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||
Product revenue | $ 178,146 | |
Cost of product revenue | 275,895 | |
Product gross loss | (97,749) | |
Collaborations revenue | 64,812 | 1,926,566 |
Operating expenses: | ||
Selling, general and administrative | 6,260,266 | 4,753,036 |
Research and development | 3,925,008 | 2,075,791 |
Total operating expenses | 10,185,274 | 6,828,827 |
Loss from operations | (10,218,211) | (4,902,261) |
Interest expense | (3,053) | (7,524,581) |
Net valuation change of instruments measured at fair value | 1,974 | 804,529 |
Loss on note extinguishment | (2,017,847) | |
Other income | 271,122 | |
Net loss | $ (9,948,168) | $ (13,640,160) |
Net loss per share: | ||
Basic and diluted (in Dollars per share) | $ (0.93) | $ (2.52) |
Number of shares used in per share calculations: | ||
Basic and diluted (in Shares) | 10,696,799 | 5,415,424 |
Statement of Changes in Stockho
Statement of Changes in Stockholders’ Equity (Deficit) - USD ($) | Common Stock | Additional Paid–In Capital | Accumulated Deficit | Total |
Balance at Sep. 30, 2019 | $ 13,494 | $ 15,987,799 | $ (17,238,871) | $ (1,237,578) |
Balance (in Shares) at Sep. 30, 2019 | 4,497,930 | |||
Issuance of common stock under securities purchase agreement | $ 217 | 389,783 | 390,000 | |
Issuance of common stock under securities purchase agreement (in Shares) | 72,223 | |||
Issuance of warrants in connection with convertible notes offering | 696,672 | 696,672 | ||
Conversion of convertible notes into common stock | $ 7,794 | 14,172,676 | 14,180,470 | |
Conversion of convertible notes into common stock (in Shares) | 2,598,025 | |||
Issuance costs in connection with conversion of convertible notes into common stock | (161,881) | (161,881) | ||
Stock-based compensation | 798,242 | 798,242 | ||
Issuance of common stock for consulting services | $ 427 | 641,289 | 641,716 | |
Issuance of common stock for consulting services (in Shares) | 142,200 | |||
Issuance of common stock upon vesting of restricted stock units | $ 173 | 395,839 | 396,012 | |
Issuance of common stock upon vesting of restricted stock units (in Shares) | 57,744 | |||
Exercise of stock options | $ 76 | 2,603 | 2,679 | |
Exercise of stock options (in Shares) | 25,515 | |||
Net loss | (13,640,160) | (13,640,160) | ||
Balance at Sep. 30, 2020 | $ 22,181 | 32,923,022 | (30,879,031) | 2,066,172 |
Balance (in Shares) at Sep. 30, 2020 | 7,393,637 | |||
Issuance of common stock under securities purchase agreement | $ 12,500 | 12,487,500 | 12,500,000 | |
Issuance of common stock under securities purchase agreement (in Shares) | 4,166,682 | |||
Conversion of convertible notes into common stock | $ 878 | 1,004,354 | 1,005,232 | |
Conversion of convertible notes into common stock (in Shares) | 292,754 | |||
Issuance costs in connection with securities issuances | (1,198,080) | (1,198,080) | ||
Issuance cost adjustment related to private placement | 50,400 | 50,400 | ||
Stock-based compensation | 1,793,199 | 1,793,199 | ||
Issuance of common stock for consulting services | $ 74 | (74) | ||
Issuance of common stock for consulting services (in Shares) | 74,327 | |||
Issuance of common stock upon vesting of restricted stock units | $ 63 | (63) | ||
Issuance of common stock upon vesting of restricted stock units (in Shares) | 30,021 | |||
Exercise of stock options | $ 3 | 10,143 | 10,146 | |
Exercise of stock options (in Shares) | 1,552 | |||
Exercise of warrants | $ 135 | 274,865 | 275,000 | |
Exercise of warrants (in Shares) | 51,046 | |||
Net loss | (9,948,168) | (9,948,168) | ||
Balance at Sep. 30, 2021 | $ 35,834 | $ 47,345,266 | $ (40,827,199) | $ 6,553,901 |
Balance (in Shares) at Sep. 30, 2021 | 12,010,019 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net loss | $ (9,948,168) | $ (13,640,160) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 80,748 | 47,609 |
Stock-based compensation | 1,793,199 | 1,835,970 |
Non-cash interest on convertible promissory notes | 5,616,858 | |
Payroll protection program loan forgiveness | (83,333) | |
Fair value change of convertible promissory notes | (1,974) | (804,529) |
Issuance costs attributed to financing activities | 3,053 | 1,907,723 |
Non-cash lease expense | 66,382 | 22,943 |
Loss on notes extinguishment | 2,017,847 | |
Change in assets and liabilities: | ||
Accounts receivable | (48,336) | |
Inventory | (98,287) | |
Prepaid and other assets | (8,320) | (77,609) |
Accounts payable | (350,313) | (269,601) |
Accrued expenses, deferred revenue, operating lease and other liabilities | (7,477) | (82,353) |
Net cash used in operating activities | (8,602,826) | (3,425,302) |
Investing activities | ||
Purchase of property and equipment | (67,079) | (122,427) |
Net cash used in investing activities | (67,079) | (122,427) |
Financing activities | ||
Proceeds from issuance of convertible promissory notes | 8,357,500 | |
Proceeds from issuance of common stock in connection with private placements | 8,829,236 | 390,000 |
Proceeds from issuance of warrants in connection with private placements | 3,670,764 | |
Issuance costs in connection with convertible promissory notes | (3,053) | (1,125,241) |
Issuance costs in connection with private placements | (1,198,080) | (384,894) |
Exercise of warrants | 275,000 | |
Exercise of stock-options | 10,146 | 2,679 |
Proceeds from paycheck protection program | 83,333 | |
Deferred offering costs | (49,159) | |
Net cash provided by financing activities | 11,534,854 | 7,323,377 |
Net increase in cash | 2,864,949 | 3,775,648 |
Cash at beginning of period | 4,036,397 | 260,749 |
Cash at end of period | 6,901,346 | 4,036,397 |
Supplemental non-cash financing and investing transactions: | ||
Conversion of convertible promissory notes to equity | 1,005,232 | 14,180,470 |
Unpaid issuance costs and non-cash adjustments attributed to convertible notes and private placement | 50,400 | 95,735 |
Non-cash issuance of broker warrants in connection with convertible notes and private placements | 696,672 | |
Operating lease right of use asset obtained in exchange for operating lease | 73,118 | 335,119 |
Payroll protection program loan forgiveness | 83,333 | |
Unpaid deferred offering costs | 67,954 | |
Unpaid purchases of property and equipment | $ 48,651 | $ 16,872 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | NOTE 1 - Organization and Nature of Operations NeuroOne Medical Technologies Corporation (the “Company” or “NeuroOne”), a Delaware corporation, is an early-stage medical technology company developing comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and brain stimulation solutions to diagnose and treat patients with epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological disorders. The Company received 510(k) clearance from the FDA for its Evo cortical technology in November 2019, and in September 2021 received 510(k) clearance from the FDA for its Evo sEEG electrode technology for temporary (less than 24 hours) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain. To date, the Company has had limited commercial sales. The Company’s common stock commenced trading on The Nasdaq Capital Market on May 26, 2021 under the ticker symbol “NMTC.” Previously, the Company’s common stock was traded on the OTC Markets quotation system on the OTCQB. 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. As a result of the COVID-19 pandemic, the Company has experienced, and will likely continue to experience, delays and disruptions in its pre-clinical and clinical trials, as well as interruptions in its manufacturing, supply chain, shipping, and research and development operations. In April 2020, given the impact of COVID-19 on the Company and in connection with the enactment of the CARES Act, the Company applied for and received loan funding of $83,333 under the Paycheck Protection Program, which was forgiven by the U.S. Small Business Administration in June 2021. manufacturing, component supply, shipping and research and development operations The extent to which the COVID-19 pandemic may further impact the Company’s business 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 duration of the pandemic, 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. 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 for fiscal year 2022 and beyond. |
Going Concern
Going Concern | 12 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 - Going Concern The accompanying 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 an accumulated deficit of $40.8 million as of September 30, 2021. To date, the Company’s revenues have not been sufficient 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. The Company does not have adequate liquidity to fund its operations without raising additional funds and such actions are not solely within the control of the Company. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this condition. If the Company is unable to raise additional funds, or the Company’s anticipated operating results are not achieved, management believes planned expenditures may need to be reduced in order to extend the time period that existing resources can fund the Company’s operations. The Company intends to fund ongoing activities by utilizing its current cash on hand, from product and collaborations revenue and by raising additional capital through equity or debt financings. If management is unable to obtain the necessary capital, it may have a material adverse effect on the operations of the Company and the development of its technology, or the Company may have to cease operations altogether. There was also substantial doubt about the Company’s ability to continue as a going concern for the financial statements as of and for the year ended September 30, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. 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. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment, which is the business of development and commercialization of products related to comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and brain stimulation solutions. Accordingly, the Company has a single reporting segment. Reverse Stock Split On March 11, 2021, the Company’s Board of Directors (the “Board”) approved a one-for-three reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”) effective end-of-day March 31, 2021. All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, restricted stock units and warrants to purchase shares of common stock. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split. Any fraction of a share of common stock that was created as a result of the Reverse Stock Split was rounded up to the next whole share. The authorized shares and par value of the common stock and preferred stock were not adjusted as a result of the Reverse Stock Split. 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 expenses during the reporting period. Actual results could differ from those estimates. Concentration of 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 September 30, 2021, the Company had $6.7 million of deposits in excess of federally insured amounts. 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 customer 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 the Company’s strip and grid cortical electrodes (the “Strip/Grid Products”) and outside supplier materials costs in connection with the . 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 Account Standards Codification (“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 September 30, 2021 and 2020, the fair values of cash, accounts receivable, inventory, prepaid, 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 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 years ended September 30, 2021 and 2020. There were no financial instruments measured on a recurring basis outstanding as of September 30, 2021. The fair value of financial instruments measured on a recurring basis was as follows as of September 30, 2020: 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, warrant liability and premium debt conversion derivatives measured at fair value on a recurring basis using unobservable level 3 inputs for the years ended September 30 as follows: 2021 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Conversion of convertible promissory notes to common stock (1,005,232 ) Change in fair value including accrued interest (1,974 ) Balance as of end of period – September 30, 2021 $ — 2020 Convertible notes Balance as of beginning of period – September 30, 2019 $ — Fair value attributed to convertible promissory notes upon issuance 13,974,358 Fair value attributed to note extinguishment 2,017,847 Conversion of convertible promissory notes to common stock (14,180,470 ) Change in fair value including accrued interest (804,529 ) Balance as of end of period – September 30, 2020 $ 1,007,206 Intellectual Property The Company has entered into two licensing agreements with major research institutions, which allow 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. Impairment of Long-Lived Assets The Company evaluates its long-lived assets, which consist of licensed intellectual property, property and equipment and right of use assets 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. 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. 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 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 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 years ended September 30, 2021 and 2020. 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 years ended September 30: 2021 2020 Warrants 7,503,808 3,390,320 Stock options 1,122,560 492,842 Restricted stock units 11,384 26,698 Unissued vested restricted stock units 1,148 2,063 Convertible notes — 277,618 Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses” 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 earnings per share 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 | 12 Months Ended |
Sep. 30, 2021 | |
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 WARF may terminate the WARF License on 30 days’ written notice if we default on the payments of amounts due to WARF or fail to timely submit development reports, actively pursue our development plan or breach any other covenant in the WARF License and fail to remedy such default in 90 days or in the event of certain bankruptcy events involving us. WARF may also terminate the WARF License (i) on 90 days’ notice if we had failed to have commercial sales of one or more FDA-approved products under the WARF License by June 30, 2021 or (ii) if, after royalties earned on sales begin to be paid, such earned royalties cease for more than four calendar quarters. The first commercial sale occurred on December 7, 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 September 30, 2021, $3,894 in royalty fees were incurred given the commencement of commercial sales and were reflected as a component of cost of product revenue during the year ended September 30, 2021. Legal PMT Litigation From time to time, the Company is subject to litigation and claims arising in the ordinary course of business. On March 29, 2018, the Company was served with a complaint filed by PMT Corporation (“PMT”), the former employer of Mark Christianson, a current Company employee, and Wade Fredrickson, a now former Company employee. The complaint added the Company, NeuroOne, Inc. and Mr. Christianson to its existing lawsuit against Mr. Fredrickson in the Fourth Judicial District Court of the State of Minnesota. In the lawsuit, PMT claims that Mr. Fredrickson and Mr. Christianson, by virtue of their work for the Company and their prior work during employment with PMT, 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. The complaint purported to attach Mr. Fredrickson’s noncompete agreement as Exhibit A. Against Mr. Fredrickson, PMT also alleged 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, Inc., PMT alleged that the Company and NeuroOne, Inc. 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 moved for summary judgment on all remaining claims asserted against them as well as for leave to assert counterclaims against PMT for abuse of process. Following hearings on the dispositive motions and defendants’ sanctions motion, the district court granted the Company’s motion for sanctions on April 29, 2020. 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 with respect to its conduct pertaining to the Fredrickson noncompete. On October 12, 2020 the Court awarded NeuroOne, Inc. $185,000 in Rule 11 sanctions and Fredrickson $145,000 in Rule 11 sanctions with respect to PMT’s 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 statements of operations. The Court granted NeuroOne, Inc.’s motion to amend to permit its assertion of the right to assert a punitive damages claim against PMT associated with fighting the allegations relating to the Fredrickson noncompete. On May 27, 2021 PMT moved for summary judgment on defendants’ claims for abuse of process and punitive damages, and on August 5, 2021, the district court granted PMT’s motion to dismiss the abuse of process and punitive damage claims. Trial has been postponed from December 2021 to August of 2022. 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 issuance of these financial statements. Facility Leases Headquarters 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. Los Gatos Lease In July 1, 2021, the Company entered into a non-cancellable facility lease (the “New Lease”), pursuant to which the Company agreed to rent office space for its research and development operations located at 718 University Avenue, Suite #111, Los Gatos, California. The term of the New Lease is eighteen months. The facility space under the New Lease is approximately 1,162 square feet. The Company took possession of the office space on July 2, 2021. The initial monthly rent under the New Lease is approximately $4,241. San Jose Lease On December 30, 2020, the Company entered into a non-cancellable lease agreement for short term office space in San Jose, California (the “San Jose Lease”) for a three month initial term. After March 31, 2021, the San Jose Lease was cancellable upon a 30-day notice to the landlord. The Company took possession of the office space on January 1, 2021 and the San Jose Lease was terminated upon the commencement of the New Lease discussed above. The base rent under the San Jose Lease was $504 per month. During the years ended September 30, 2021 and 2020, rent expense associated with the facility leases amounted to $136,826 and $103,189, respectively. Supplemental cash flow information related to the operating lease was as follows: For the 2021 2020 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 70,897 $ 38,462 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 73,118 $ 335,119 Supplemental balance sheet information related to the operating lease was as follows: As of September 30, 2021 2020 Right-of-use assets $ 288,948 $ 282,211 Lease liability $ 315,673 $ 312,176 Weighted average remaining lease term (years) 3.1 4.5 Weighted average discount rate 6.7 % 7.0 % Maturity of the lease liability was as follows: Calendar Year As of 2021 (period from October 1, 2021 to December 31, 2021) $ 32,435 2022 131,220 2023 82,333 2024 84,391 2025 21,227 Total lease payments 351,606 Less imputed interest (35,933 ) Total 315,673 Short-term portion (112,778 ) Long-term portion $ 202,895 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Sep. 30, 2021 | |
Supplemental Balance Sheet Information [Abstract] | |
Supplemental Balance Sheet Information | NOTE 5 – Supplemental Balance Sheet Information Prepaid and Other Assets Prepaid and other assets consisted of the following: As of September 30, 2021 2020 Prepaid expenses $ 151,109 $ 118,010 Deferred offering costs 92,934 — Other — 601 Total $ 244,043 $ 118,611 Intangibles Intangible assets roll forward is as follows: Useful Life Net Intangibles, September 30, 2019 12-13 years $ 178,838 Less: amortization (22,315 ) Net Intangibles, September 30, 2020 156,523 Less: amortization (22,316 ) Net Intangibles, September 30, 2021 $ 134,207 The Company anticipates amortization expense of approximately $21,000 per year for fiscal year 2022 through 2026 based upon the two current license agreements. Property and Equipment Property and equipment held for use by category are presented in the following table: As of 2021 2020 Equipment and furniture $ 311,486 $ 195,756 Software 1,895 1,895 Total property and equipment 313,381 197,651 Less accumulated depreciation (90,052 ) (31,620 ) Property and equipment, net $ 223,329 $ 166,031 Depreciation expense was $58,432 and $25,294 for the years ended September 30, 2021 and 2020, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses and Other Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | NOTE 6 - Accrued Expenses and Other Liabilities Accrued expenses consisted of the following at September 30: As of 2021 2020 Accrued payroll $ 376,236 $ 238,212 Operating lease liability, short term 112,778 57,848 Accrued issuance costs — 50,400 Royalty Fees 72,083 — Other 83,152 166,302 Total $ 644,249 $ 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 may be 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. 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. The PPP loan was forgiven on June 9, 2021 by the U.S. Small Business Administration and was reflected as other income in the accompanying statements of operations. Interest was nominal during the years ended September 30, 2021 and 2020. |
Zimmer Development Agreement
Zimmer Development Agreement | 12 Months Ended |
Sep. 30, 2021 | |
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 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 is responsible for all costs and expenses related to developing the Products, and Zimmer is 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 is 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. Except where Zimmer timely delivers a Design Modification Notice pursuant to Section 1.2, if one or more of the events set forth below occurs on or before the deadline indicated for such event and the Product Availability Date (as defined in the Development Agreement) for the SEEG Products occurs on or before June 30, 2021, then the Company shall receive the additional amount indicated for such event as part of the SEEG Exclusivity Maintenance Fee: ● Design freeze for the SEEG Products by December 15, 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 If Zimmer timely delivers a Design Modification Notice to the Company under the Development Agreement, and one or more of the events set forth below occurs on or before the deadline indicated for such event and the Product Availability Date for the SEEG Products occurs on or before June 30, 2021, then the Company shall receive the additional amount indicated for such event as part of the SEEG Exclusivity Maintenance Fee: ● 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 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. The Product Availability Date for the SEEG Products has not yet occurred. 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)), 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 September 30, 2021, the Company had identified the following three performance obligations under the Zimmer Development Agreement: (1) the Company obligation to license Zimmer rights to certain of its intellectual property; (2) complete SEEG Product development; and (3) complete Strip/Grid Product development. Accordingly, the Company recognized revenue in the amount of $64,812 and $1,926,566 during the years ended September 30, 2021 and 2020, respectively, related to the development of the Products completed during the periods 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 September 30, 2021 and 2020: Deferred Revenue Balance as of September 30, 2019 $ — Upfront initial exclusivity payment 2,000,000 Revenue recognized (1,926,566 ) Balance as of September 30, 2020 73,434 Revenue recognized (64,812 ) Balance as of September 30, 2021 $ 8,622 The remaining performance obligations reflected in deferred revenue as of September 30, 2021 are expected to be completed in first half of fiscal year 2022. 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 year ended September 30, 2021 was $178,146. Advertising Expense Advertising expense is charged to selling, general and administrative expenses during the period that it is incurred. Total advertising expense amounted to $338,837 for the year ended September 30, 2021. Advertising expense during the prior year period was negligible. |
Convertible Promissory Notes an
Convertible Promissory Notes and Warrant Agreements | 12 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes and Warrant Agreements | NOTE 8 - Convertible Promissory Notes and Warrant Agreements As of 2021 2020 Paulson convertible notes, principal $ — $ 546,000 Accrued interest — 63,458 Fair value adjustments — 397,748 $ — $ 1,007,206 Paulson Convertible Note Offerings 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. 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 $213,383 during the years ended September 30, 2021 and 2020, respectively, and was recorded under the net valuation change of instruments measured at fair value in the 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. The fair value of the 2019 Paulson Notes was significantly higher than the proceeds received as of each of the respective issuance dates given the significant redemption discount associated with the Qualified Financing provision. The excess of fair value over proceeds at issuance amounted to $1,831,940 and was recorded to interest expense in the statements of operations during the year ended September 30, 2020. Subsequent to issuance, the fair value change of the 2019 Paulson Notes amounted to a benefit of $1,974 and $1,221,480 during the years ended September 30, 2021 and 2020, respectively, and was recorded under the net valuation change of instruments measured at fair value in the statements of operations. Each 2019 Paulson Warrant granted 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 5.61, with an exercise price per share equal to $5.61. As of the final closing on December 3, 2019, the Company issued 2019 Paulson Warrants exercisable for 288,305 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 financial statements. In connection with the 2019 Private Placement, Paulson Investment Company, LLC (“Paulson”) received a cash commission equal to 12% of the gross proceeds from the sale of the 2019 Paulson Notes, and 10-year warrants to purchase an amount of common stock equal to 86,498 shares of common stock at an exercise price equal to $5.61 per share (the “Broker Warrants”). The issuance costs incurred during the year ended September 30, 2021 and 2020 in connection with the 2019 Paulson Private Placement were $3,053 and $865,567, respectively. Issuance costs in 2021 related to legal costs. Issuance costs in 2020 included cash commissions equal to $388,176 and legal and third-party fees in the amount of $57,756. In addition, issuance costs included the value of the Broker Warrants in the amount of $419,635. The issuance costs were recorded as a component of interest in the accompanying statements of operations. 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. Revised the Registration Date – The Second 2019 Paulson Notes Amendment was accounted for as a note extinguishment for accounting purposes given the substantive change in the optional redemption feature’s conversion formula. The fair value change in the 2019 Paulson Notes associated with the extinguishment was recorded as a loss on notes extinguishment in the accompanying statements of operations in the amount of $2,017,847 during the year ended September 30, 2020. Lastly, in connection with the Second 2019 Paulson Notes Amendment, legal costs in the amount of $1,943 were incurred and recorded as a component of interest in the accompanying statements of operations. During the years ended September 30, 2021 and 2020, the 2019 Paulson Notes were converted into 292,754 and 725,394 shares of common stock, respectively. All of the 2019 Paulson notes were converted into shares of common stock by December 31, 2020. Paulson 2020 Convertible Note Financing On April 30, 2020, the Company entered into a subscription agreement with certain accredited investors, pursuant to which the Company, in a private placement (the “2020 Paulson Private Placement”), agreed to issue and sell to the investors 13% convertible promissory notes (each, a “2020 Paulson Note” and collectively, the “2020 Paulson Notes”) and warrants (each, a “2020 Paulson Warrant” and collectively, the “2020 Paulson Warrants”) to purchase shares of the Company’s common stock. Between May 1, 2020 and June 30, 2020, the Company issued 2020 Paulson Notes in an aggregate principal amount of $5,122,700 to the Subscribers. The 2020 Paulson Private Placement was terminated on June 30, 2020. The 2020 Paulson Notes had a fixed interest rate of 13% per annum and require the Company to repay the principal and accrued and unpaid interest thereon on the earlier of December 31, 2020 or a change of control transaction. Interest on principal amounted to $81,613 during the year ended September 30, 2020 and was recorded under the net valuation change of instruments measured at fair value in the statements of operations. If the Company had raised more than $5,000,000 in an equity financing before the maturity date (the “2020 Qualified Financing”), without any action on the part of the Subscribers, all of the outstanding principal and accrued and unpaid interest of the Notes (the “Outstanding Balance”) would have been converted into that number of shares of the securities issued by the Company in the closing on the date a 2020 Qualified Financing occurred equal to: (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of the securities issued by the Company in the closing on the date a 2020 Qualified Financing occurred and (B) the volume weighted average price of the common stock for ten (10) trading days immediately preceding the 2020 Qualified Financing. If the Company had announced a transaction between the Company and any other company (or an affiliate of any such company) that was included in the S&P 500 Health Care Index as published from time to time by S&P Dow Jones Indices LLC that included an investment or upfront payments resulting in gross proceeds to the Company of at least $2,000,000 upon the execution of such transaction or definitive agreement, and provides for terms of collaboration, manufacturing, distribution, licensing or supply of the Company’s products (a “Strategic Transaction”) before the maturity date, without any action on the part of the subscribers, the Outstanding Balance would be converted into that number of shares of common stock equal to: (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the VWAP of the common stock for the ten (10) trading days immediately preceding the first announcement of the Strategic Transaction or (B) closing price of the common stock on the day preceding the first announcement by the Company of a Strategic Transaction. At any time, at the sole election of the holder of such 2020 Paulson Note, all or a portion of the Outstanding Balance could have been converted into that number of shares of common stock equal to: (i) the Outstanding Balance elected by the holder to be converted divided by (ii) 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. If a change of control transaction had occurred prior to the conversion of the 2020 Paulson Notes or the maturity date, the 2020 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 2020 Paulson Notes on a fair value basis under ASC 825 to comprehensively value and streamline the accounting for the embedded conversion options Each 2020 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 2020 Paulson Notes divided by 5.61, with an exercise price per share equal to $5.61. The 2020 Paulson Warrants are immediately exercisable and expire on April 30, 2023. The exercise price is subject to adjustment in the event of any stock dividends or splits, reverse stock split, recapitalization, reorganization or similar transaction. The Company issued 2020 Paulson Warrants exercisable for 456,564 shares of common stock in connection with all closings of the 2020 Paulson Private Placement through June 30, 2020. The 2020 Paulson warrants were deemed to be a free-standing instrument and were accounted for as equity. Given that the fair value of the 2020 Paulson Notes exceeded the proceeds received at issuance, there was no value attributed to the 2020 Paulson Warrants in the financial statements. In connection with the 2020 Paulson Private Placement, Paulson received a cash commission equal to 12% of the gross proceeds from the sale of the 2020 Paulson Notes and received 7-year warrants to purchase an amount of common stock equal to 136,971 (“Broker Warrants”). The Broker Warrants have an exercise price equal to $5.61 per share. The issuance costs incurred during the year ended September 30, 2020 in connection with the 2020 Paulson Private Placement were $1,040,213. Issuance costs included cash commissions equal to $614,725 and legal and third-party fees in the amount of $148,451. In addition, issuance costs included the value of the Broker Warrants in the amount of $277,037. The issuance costs were recorded as a component of interest in the accompanying statements of operations. Between May 4, 2020 and July 22, 2020, certain Subscribers elected to convert $3,590,353 of the outstanding principal and interest of such Subscribers’ 2020 Paulson Notes into 1,337,459 shares of common stock. On July 23, 2020, the remaining outstanding principal and interest balance of the 2020 Paulson Notes in the amount of $1,613,961 was converted into 535,178 shares of common stock upon the announcement of the Zimmer Development Agreement that qualified as a Strategic Transaction. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 9 - Stock-Based Compensation During the years ended September 30, 2021 and 2020, stock-based expense related to the stock options, restricted stock units and stock awards was included in selling, general and administrative and research and development costs as follows in the accompanying statements of operations: 2021 2020 Selling, general and administrative $ 1,550,841 $ 1,623,629 Research and development 242,358 212,341 Total stock-based compensation expense $ 1,793,199 $ 1,835,970 The Company’s 2016 and 2017 Equity Incentive Plans provide for the issuance of restricted shares and stock options to employees, directors, and consultants of the Company. The Company initially reserved 764,089 shares of common stock for issuance under the 2016 and 2017 Equity Incentive Plans on a combined basis. 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 and 2020, 484,622 and 428,930 shares were added to the 2017 Plan, respectively, as a result of the evergreen provision. Stock Options During the years ended September 30, 2021 and 2020, 703,117 and 334,731 stock options were granted to employees, directors and consultants, respectively, with a weighted average grant date fair value of $3.01 and $3.03 per share, respectively. The options granted have vesting periods ranging from being immediate to four years. All options expire ten years from the date of grant. The total expense for the years ended September 30, 2021 and 2020 related to the stock options was $983,301 and $798,242, respectively. The following table summarizes the Company’s stock option plan activity for the years ended September 30, 2021 and 2020 as follows: Number of Weighted Weighted- Aggregate Outstanding at September 30, 2019 281,956 $ 5.46 9.0 $ 343,406 Granted 334,731 $ 6.18 — — Exercised (25,515 ) $ 0.12 — — Forfeited/Cancelled (98,330 ) $ 5.91 — — Outstanding at September 30, 2020 492,842 $ 6.13 8.8 $ 96,088 Granted 703,117 $ 5.83 — — Exercised (1,538 ) $ 6.60 — — Forfeited/Cancelled (71,861 ) $ 6.85 — — Outstanding at September 30, 2021 1,122,560 $ 5.89 8.8 $ 127,339 Vested and exercisable at September 30, 2021 481,047 $ 5.89 8.2 $ 311,388 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of September 30, 2021 and 2020 of $3.95 and $3.86 per share, respectively. As of September 30, 2021 and 2020, 1,055,376 and 467,327 outstanding options, respectively, had no intrinsic value. The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the years ended September 30: 2021 2020 Expected stock price volatility 55.9 % 53.1 % Expected life of options (years) 6.0 5.6 Expected dividend yield 0 % 0 % Risk free interest rate 0.6 % 1.4 % During the year ended September 30, 2021 and 2020, 280,557 and 198,191 stock options vested, respectively. Restricted Stock Units A summary of restricted stock unit (“RSU”) activity is as follows for the years ended September 30, 2021 and 2020: Number of Shares Non-vested at September 30, 2019 10,503 Granted 78,323 Forfeited (2,335 ) Vested (59,793 ) Non-vested at September 30, 2020 26,698 Granted 13,776 Vested (29,090 ) Non-vested at September 30, 2021 11,384 During the years ended September 30, 2021 and 2020, 13,776 and 78,323 RSUs were granted to members of the Company’s board of directors and consultants that vest over a period ranging from an immediate to a two year period, with a grant date fair value of $7.26 and $6.27 per unit, respectively. During the years ended September 30, 2021 and 2020, 29,090 and 59,793 RSUs vested, respectively. The total expense for the years ended September 30, 2021 and 2020 related to the RSU’s was $163,988 and $396,012, respectively. The number of RSUs forfeited during the years ended September 30, 2021 and 2020 was zero and 2,335, respectively. Other Stock-Based Awards 2021 Activity In April 2021, two consulting agreements were executed whereby a total of 62,659 shares of common stock were issued and vested as of September 30, 2021. In July 2021, two consulting agreements were executed whereby a total of 11,668 shares of common stock were issued and vested as of September 30, 2021. 2020 Activity In October 2019, two consulting agreements were executed whereby up to 38,334 shares of common stock were issued and vested as of September 30, 2020. On April 22, 2020, the Company entered into an amendment (the “Amendment”) to one of the consulting agreements. Pursuant to the Amendment, the Company issued an additional 11,667 shares in exchange for consulting services of which 11,667 shares of common stock were vested as of September 30, 2020 under the Amendment. Vesting was based on a time-based vesting condition ranging over a three to nine-month period commencing upon the execution of the consulting agreements. In February 2020, an additional consulting agreement was executed whereby up to 30,000 shares of common stock were issued and vested as of September 30, 2020 under this agreement. In addition, on May 21, 2020, 22,195 shares of common stock were issued as compensation to a former 2019 Paulson Note holder related to a prior 2019 Paulson Note conversion and release of liability. In August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company repurchase. The stock award under the agreement vests over a six-month period. As of September 30, 2021 and 2020, 33,333 and 6,667 shares vested under this agreement, respectively. Compensation expense related to the stock awards granted under the consulting agreements and to the former 2019 Paulson Note holder referenced above amounted to $645,910 and $641,716 for the years ended September 30, 2021 and 2020, respectively, and was included in stock-based compensation expense. The expense recognition related to the grants was based on the fair value of the underlying common stock at the point of vesting which ranged from $4.53 to $7.95 per share. General As of September 30, 2021, 389,709 shares were available for future issuance on a combined basis under the 2016 and 2017 Equity Incentive Plans. Unrecognized stock-based compensation was $1.7 million as of September 30, 2021. The unrecognized share-based expense is expected to be recognized over a weighted average period of 2.9 years. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | NOTE 10 - 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 the 2021 Private Placement, agreed to issue and sell an aggregate of 4,166,682 shares of the common stock of the Company and warrants to purchase an aggregate of 4,166,682 shares of common stock (the “2021 Warrants”) at an aggregate purchase price of $3.00 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 $5.25 per share. The 2021 Warrants are immediately exercisable and will expire on the fifth anniversary of issuance. 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 shares of common stock 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 fair value of the 2021 Warrants was $7.3 million and was based on the Black-Scholes pricing model. Input assumptions used were as follows: a risk-free interest rate of 0.5%; expected volatility of 56.0%; expected life of 5 years; expected dividend yield of 0%; and the underlying traded stock price. $3.7 million of the total proceeds was allocated to the 2021 Warrants based on the relative fair value allocation method, which has been reflected in stockholders’ equity. The 2021 Warrants were classified in stockholders’ equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment. The private placement closed on January 14, 2021. 2020 Common Stock Offering On July 28, 2020, the Company entered into securities purchase agreements with an accredited investor in a private placement, pursuant to which the Company has issued and sold 25,000 shares to such investor, at $5.40 per share for gross proceeds amounting to $135,000. 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 47,223 shares of the Company’s common stock to the accredited investors at a price of $5.40 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 years ended September 30, 2021 and 2020: Warrants Exercise Weighted Weighted Outstanding and exercisable at September 30, 2019 2,421,940 $ 5.40 - 9.00 $ 7.65 3.60 Issued 968,380 $ 5.61 $ 5.61 — Exercised — $ — $ — — Forfeited — $ — $ — — Outstanding and exercisable at September 30, 2020 3,390,320 $ 5.40 - 9.00 $ 7.05 2.89 Issued 4,166,682 $ 5.25 $ 4.29 — Exercised (53,194 ) $ 5.61-8.25 $ 5.61 — Forfeited — $ — $ — — Outstanding and exercisable at September 30, 2021 7,503,808 $ 5.25-9.00 $ 6.06 3.23 The following table summarizes information about warrants outstanding at September 30, 2021: Exercise Price Number Outstanding Weighted Average Number Exercisable at $ 5.25 4,166,682 4.29 4,166,682 $ 5.40 750,364 0.14 750,364 $ 5.61 916,753 2.68 916,753 $ 6.00 45,173 2.75 45,173 $ 7.50 279,733 2.41 279,733 $ 8.25 62,911 2.75 62,911 $ 9.00 1,282,192 2.18 1,282,192 Total 7,503,808 7,503,808 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 - Income Taxes The effective tax rate for the Company for the years ended September 30, 2021 and 2020 was zero percent. A reconciliation of income tax computed at the statutory federal income tax rate to the provision (benefit) for income taxes included in the accompanying statements of operations for the years ended September 30 is as follows: 2021 2020 Income tax benefit at federal statutory rate (21.0 )% (21.0 )% State income tax, net of federal benefit (7.7 ) (7.7 ) Disqualified interest and other — 17.0 Research credits (3.7 ) (1.3 ) Stock-based compensation 1.0 0.2 Valuation allowance 31.4 12.8 Effective tax rate — % — % Significant components of the Company’s deferred tax assets and liabilities are summarized in the tables below as of September 30: 2021 2020 Deferred tax assets: Federal and state operating loss carryforwards $ 7,575,069 $ 4,936,384 Acquired intangibles 24,541 22,635 Accruals and other 8,370 30,406 Research and development credit carryforwards 812,781 450,081 Stock-based compensation 451,757 255,068 Total deferred tax assets 8,872,518 5,694,574 Deferred tax liabilities: Fixed assets (64,189 ) — Total deferred tax liabilities (64,189 ) — Valuation allowance (8,808,329 ) (5,694,574 ) Net deferred tax assets $ — $ — As of September 30, 2021 and 2020, the Company had gross deferred tax assets of approximately $8,873,000 and $5,695,000, respectively. Realization of the deferred assets is primarily dependent upon future taxable income, if any, the amount and timing of which are uncertain. The Company has had significant pre-tax losses since its inception. The Company has not yet generated revenues from sales and faces significant challenges to becoming profitable. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance of approximately $8,808,000 and $5,695,000 as of September 30, 2021 and 2020, respectively. The U.S. net deferred tax assets will continue to require a valuation allowance until the Company can demonstrate their realizability through sustained profitability or another source of income. As of September 30, 2021 and 2020, the Company’s federal net operating loss carryforwards were approximately $26,355,000 and $17,175,000, respectively. The Company had federal research credit carryforwards as of September 30, 2021 and 2020 of approximately $506,000 and $272,000, respectively. The federal net operating loss incurred prior to January 1, 2018 and tax credit carryforwards will begin to expire in 2036 if not utilized. Federal net operating losses incurred after December 31, 2017 will not expire. As of September 30, 2021 and 2020, the Company had state net operating loss carryforwards of approximately $26,355,000 and $17,175,000, respectively. The Company had state research credit carryforwards of approximately $307,000 and $178,000 as of September 30, 2021 and 2020, respectively. The state net operating loss carryforwards will begin to expire in 2031, if not utilized, and the state research credit carryforwards will begin to expire in 2032 if not utilized. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. Generally, in addition to certain entity reorganizations, the limitation applies when one or more “5-percent shareholders” increase their ownership, in the aggregate, by more than 50 percentage points over a 36-month testing period or beginning the day after the most recent ownership change, if shorter. The annual limitation may result in the expiration of net operating losses and credits before utilization. In accordance with ASC 740, Income Taxes In accordance with this guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses in the statements of operations. The Company has tax filing obligations in the following jurisdictions: U.S. federal, Minnesota and California. The income tax returns since inception as a corporation in 2016 are subject to examination by the federal and Minnesota taxing authorities. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Sep. 30, 2021 | |
Defined Contribution Plan [Abstract] | |
Defined Contribution Plan | NOTE 12 - Defined Contribution Plan The Company has a 401(k) defined contribution plan (the “401K Plan”) for all employees over age 21. Employees can defer up to 100% of their compensation through payroll withholdings into the 401K Plan subject to federal law limits. The Company may match 100% of deferrals up to 3% of one’s contributions. The Company’s matching contributions to employee deferrals are discretionary. The Company may also make discretionary profit sharing contributions under the 401K Plan in the future, but it has not done so through September 30, 2021. Employee contributions and any employer matching contributions made to satisfy certain non-discrimination tests required by the Internal Revenue Code are 100% vested upon contribution. Discretionary employer matches to employee deferrals vest over a six year period beginning on the second anniversary of an employee’s date of hire. Discretionary profit sharing contributions vest over a five year period beginning on the first anniversary of an employee’s date of hire. The amount of contributions made by the Company under the 401K Plan during the years ended September 30, 2021 and 2020 was $14,803 and zero, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 - Subsequent Events Inducement Plan On October 4, 2021, the Company adopted the NeuroOne Medical Technologies Corporation 2021 Inducement Plan (the “Plan”), pursuant to which the Company reserved 420,350 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Plan was approved by the Company’s Board of Directors without stockholder approval in accordance with such rule. Public Offering On October 13, 2021, the Company, entered into an Underwriting Agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC, as underwriter (the “Underwriter”), relating to the issuance and sale of 3,750,000 shares of the Company’s common stock at a price to the public of $3.20 per share. In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days, to purchase up to an additional 562,500 shares of common stock on the same terms. The base offering closed on October 15, 2021, and the sale of 422,057 shares of common stock subject to the Underwriter’s overallotment option closed on November 15, 2021. Deferred offering costs in connection with the offering amounted to $92,934 and are reflected in the prepaid and other assets line item in the accompanying balance sheets as of September 30, 2021. The gross proceeds to the Company from this offering were approximately $13.4 million prior to deducting underwriting discounts and other offering expenses payable by the Company. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. 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. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment, which is the business of development and commercialization of products related to comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and brain stimulation solutions. Accordingly, the Company has a single reporting segment. |
Reverse Stock Split | Reverse Stock Split On March 11, 2021, the Company’s Board of Directors (the “Board”) approved a one-for-three reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”) effective end-of-day March 31, 2021. All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, restricted stock units and warrants to purchase shares of common stock. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split. Any fraction of a share of common stock that was created as a result of the Reverse Stock Split was rounded up to the next whole share. The authorized shares and par value of the common stock and preferred stock were not adjusted as a result of the Reverse Stock Split. |
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 expenses during the reporting period. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of 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 September 30, 2021, the Company had $6.7 million of deposits in excess of federally insured amounts. |
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 customer 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 the Company’s strip and grid cortical electrodes (the “Strip/Grid Products”) and outside supplier materials costs in connection with the . 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 Account Standards Codification (“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 September 30, 2021 and 2020, the fair values of cash, accounts receivable, inventory, prepaid, 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 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 years ended September 30, 2021 and 2020. There were no financial instruments measured on a recurring basis outstanding as of September 30, 2021. The fair value of financial instruments measured on a recurring basis was as follows as of September 30, 2020: 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, warrant liability and premium debt conversion derivatives measured at fair value on a recurring basis using unobservable level 3 inputs for the years ended September 30 as follows: 2021 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Conversion of convertible promissory notes to common stock (1,005,232 ) Change in fair value including accrued interest (1,974 ) Balance as of end of period – September 30, 2021 $ — 2020 Convertible notes Balance as of beginning of period – September 30, 2019 $ — Fair value attributed to convertible promissory notes upon issuance 13,974,358 Fair value attributed to note extinguishment 2,017,847 Conversion of convertible promissory notes to common stock (14,180,470 ) Change in fair value including accrued interest (804,529 ) Balance as of end of period – September 30, 2020 $ 1,007,206 |
Intellectual Property | Intellectual Property The Company has entered into two licensing agreements with major research institutions, which allow 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets, which consist of licensed intellectual property, property and equipment and right of use assets 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. |
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. |
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 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 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 years ended September 30, 2021 and 2020. 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 years ended September 30: 2021 2020 Warrants 7,503,808 3,390,320 Stock options 1,122,560 492,842 Restricted stock units 11,384 26,698 Unissued vested restricted stock units 1,148 2,063 Convertible notes — 277,618 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses” 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 earnings per share 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_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
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 $ 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 | 2021 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Conversion of convertible promissory notes to common stock (1,005,232 ) Change in fair value including accrued interest (1,974 ) Balance as of end of period – September 30, 2021 $ — 2020 Convertible notes Balance as of beginning of period – September 30, 2019 $ — Fair value attributed to convertible promissory notes upon issuance 13,974,358 Fair value attributed to note extinguishment 2,017,847 Conversion of convertible promissory notes to common stock (14,180,470 ) Change in fair value including accrued interest (804,529 ) Balance as of end of period – September 30, 2020 $ 1,007,206 |
Schedule of computation of diluted net loss per share | 2021 2020 Warrants 7,503,808 3,390,320 Stock options 1,122,560 492,842 Restricted stock units 11,384 26,698 Unissued vested restricted stock units 1,148 2,063 Convertible notes — 277,618 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of supplemental cash flow information related to the operating lease | For the 2021 2020 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 70,897 $ 38,462 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 73,118 $ 335,119 |
Schedule of supplemental balance sheet information related to the operating lease | As of September 30, 2021 2020 Right-of-use assets $ 288,948 $ 282,211 Lease liability $ 315,673 $ 312,176 Weighted average remaining lease term (years) 3.1 4.5 Weighted average discount rate 6.7 % 7.0 % |
Schedule of maturity of the lease liability | Calendar Year As of 2021 (period from October 1, 2021 to December 31, 2021) $ 32,435 2022 131,220 2023 82,333 2024 84,391 2025 21,227 Total lease payments 351,606 Less imputed interest (35,933 ) Total 315,673 Short-term portion (112,778 ) Long-term portion $ 202,895 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Supplemental Balance Sheet Information [Abstract] | |
Schedule of Prepaid and other assets | As of September 30, 2021 2020 Prepaid expenses $ 151,109 $ 118,010 Deferred offering costs 92,934 — Other — 601 Total $ 244,043 $ 118,611 |
Schedule of intangible assets | Useful Life Net Intangibles, September 30, 2019 12-13 years $ 178,838 Less: amortization (22,315 ) Net Intangibles, September 30, 2020 156,523 Less: amortization (22,316 ) Net Intangibles, September 30, 2021 $ 134,207 |
Schedule of property and equipment | As of 2021 2020 Equipment and furniture $ 311,486 $ 195,756 Software 1,895 1,895 Total property and equipment 313,381 197,651 Less accumulated depreciation (90,052 ) (31,620 ) Property and equipment, net $ 223,329 $ 166,031 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses and Other Liabilities [Abstract] | |
Schedule of accrued expenses | As of 2021 2020 Accrued payroll $ 376,236 $ 238,212 Operating lease liability, short term 112,778 57,848 Accrued issuance costs — 50,400 Royalty Fees 72,083 — Other 83,152 166,302 Total $ 644,249 $ 512,762 |
Zimmer Development Agreement (T
Zimmer Development Agreement (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Zimmer Development Agreement [Abstract] | |
Schedule of deferred revenue | Deferred Revenue Balance as of September 30, 2019 $ — Upfront initial exclusivity payment 2,000,000 Revenue recognized (1,926,566 ) Balance as of September 30, 2020 73,434 Revenue recognized (64,812 ) Balance as of September 30, 2021 $ 8,622 |
Convertible Promissory Notes _2
Convertible Promissory Notes and Warrant Agreements (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of convertible promissory notes and warrant agreements | As of 2021 2020 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) | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | 2021 2020 Selling, general and administrative $ 1,550,841 $ 1,623,629 Research and development 242,358 212,341 Total stock-based compensation expense $ 1,793,199 $ 1,835,970 |
Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model | Number of Weighted Weighted- Aggregate Outstanding at September 30, 2019 281,956 $ 5.46 9.0 $ 343,406 Granted 334,731 $ 6.18 — — Exercised (25,515 ) $ 0.12 — — Forfeited/Cancelled (98,330 ) $ 5.91 — — Outstanding at September 30, 2020 492,842 $ 6.13 8.8 $ 96,088 Granted 703,117 $ 5.83 — — Exercised (1,538 ) $ 6.60 — — Forfeited/Cancelled (71,861 ) $ 6.85 — — Outstanding at September 30, 2021 1,122,560 $ 5.89 8.8 $ 127,339 Vested and exercisable at September 30, 2021 481,047 $ 5.89 8.2 $ 311,388 |
Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model | 2021 2020 Expected stock price volatility 55.9 % 53.1 % Expected life of options (years) 6.0 5.6 Expected dividend yield 0 % 0 % Risk free interest rate 0.6 % 1.4 % |
Schedule of restricted stock unit activity | Number of Shares Non-vested at September 30, 2019 10,503 Granted 78,323 Forfeited (2,335 ) Vested (59,793 ) Non-vested at September 30, 2020 26,698 Granted 13,776 Vested (29,090 ) Non-vested at September 30, 2021 11,384 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Warrants Exercise Weighted Weighted Outstanding and exercisable at September 30, 2019 2,421,940 $ 5.40 - 9.00 $ 7.65 3.60 Issued 968,380 $ 5.61 $ 5.61 — Exercised — $ — $ — — Forfeited — $ — $ — — Outstanding and exercisable at September 30, 2020 3,390,320 $ 5.40 - 9.00 $ 7.05 2.89 Issued 4,166,682 $ 5.25 $ 4.29 — Exercised (53,194 ) $ 5.61-8.25 $ 5.61 — Forfeited — $ — $ — — Outstanding and exercisable at September 30, 2021 7,503,808 $ 5.25-9.00 $ 6.06 3.23 |
Schedule of summarizes information about warrants outstanding | Exercise Price Number Outstanding Weighted Average Number Exercisable at $ 5.25 4,166,682 4.29 4,166,682 $ 5.40 750,364 0.14 750,364 $ 5.61 916,753 2.68 916,753 $ 6.00 45,173 2.75 45,173 $ 7.50 279,733 2.41 279,733 $ 8.25 62,911 2.75 62,911 $ 9.00 1,282,192 2.18 1,282,192 Total 7,503,808 7,503,808 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income tax computed at the statutory federal income tax rate | 2021 2020 Income tax benefit at federal statutory rate (21.0 )% (21.0 )% State income tax, net of federal benefit (7.7 ) (7.7 ) Disqualified interest and other — 17.0 Research credits (3.7 ) (1.3 ) Stock-based compensation 1.0 0.2 Valuation allowance 31.4 12.8 Effective tax rate — % — % |
Schedule of deferred tax assets and liabilities | 2021 2020 Deferred tax assets: Federal and state operating loss carryforwards $ 7,575,069 $ 4,936,384 Acquired intangibles 24,541 22,635 Accruals and other 8,370 30,406 Research and development credit carryforwards 812,781 450,081 Stock-based compensation 451,757 255,068 Total deferred tax assets 8,872,518 5,694,574 Deferred tax liabilities: Fixed assets (64,189 ) — Total deferred tax liabilities (64,189 ) — Valuation allowance (8,808,329 ) (5,694,574 ) Net deferred tax assets $ — $ — |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | 1 Months Ended |
Apr. 30, 2020USD ($) | |
Accounting Policies [Abstract] | |
Funding loan received | $ 83,333 |
Going Concern (Details)
Going Concern (Details) $ in Millions | Sep. 30, 2021USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated deficit | $ 40.8 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Number of operating segments | 1 |
Deposits in excess of federally insured amounts (in Dollars) | $ 6.7 |
Number of licensing agreements | 2 |
Software [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Estimated useful life | 3 years |
Minimum [Member] | Equipment and Furniture [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Estimated useful life | 3 years |
Maximum [Member] | Equipment and Furniture [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Estimated useful life | 7 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of fair value of financial instruments measured on a recurring basis | Sep. 30, 2020USD ($) |
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) - Schedule of convertible notes at fair value on a recurring basis using unobservable level 3 inputs - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Convertible notes | ||
Balance as of beginning of period | $ 1,007,206 | |
Fair value attributed to convertible promissory notes upon issuance | 13,974,358 | |
Fair value attributed to note extinguishment | 2,017,847 | |
Conversion of convertible promissory notes to common stock | (1,005,232) | (14,180,470) |
Change in fair value including accrued interest | (1,974) | (804,529) |
Balance as of end of period | $ 1,007,206 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of computation of diluted net loss per share - shares | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of computation of diluted net loss per share [Abstract] | ||
Warrants | 7,503,808 | 3,390,320 |
Stock options | 1,122,560 | 492,842 |
Restricted stock units | 11,384 | 26,698 |
Unissued vested restricted stock units | 1,148 | 2,063 |
Convertible notes | 277,618 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Jul. 01, 2021USD ($)m² | Oct. 12, 2020USD ($) | Jan. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2022USD ($) |
Commitments and Contingencies (Details) [Line Items] | ||||||
Royalty payments - 2020 | $ 50,000 | |||||
Royalty payments - 2021 | $ 100,000 | |||||
Royalty payments - 2022 | $ 150,000 | |||||
Court awarded | $ 185,000 | |||||
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. | |||||
Lease space (in Square Meters) | m² | 1,162 | |||||
Lease rental expense | $ 4,241 | |||||
Monthly lease rent | $ 504 | |||||
Rent expense | 136,826 | $ 103,189 | ||||
Wade Fredrickson [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Court awarded | $ 145,000 | |||||
Minimum [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Royalty payments | $ 50,000 | |||||
Mayo Agreement [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Royalty payments | $ 3,894 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of supplemental cash flow information related to the operating lease - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash paid for amounts included in the measurement of lease liability: | ||
Operating cash flows from operating leases | $ 70,897 | $ 38,462 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 73,118 | $ 335,119 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of supplemental balance sheet information related to the operating lease - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of supplemental balance sheet information related to the operating lease [Abstract] | ||
Right-of-use assets | $ 288,948 | $ 282,211 |
Lease liability | $ 315,673 | $ 312,176 |
Weighted average remaining lease term (years) | 3 years 1 month 6 days | 4 years 6 months |
Weighted average discount rate | 6.70% | 7.00% |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of maturity of the lease liability | Sep. 30, 2021USD ($) |
Schedule of maturity of the lease liability [Abstract] | |
2021 (period from October 1, 2021 to December 31, 2021) | $ 32,435 |
2022 | 131,220 |
2023 | 82,333 |
2024 | 84,391 |
2025 | 21,227 |
Total lease payments | 351,606 |
Less imputed interest | (35,933) |
Total | 315,673 |
Short-term portion | (112,778) |
Long-term portion | $ 202,895 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental Balance Sheet Information [Abstract] | ||
Amortization expense | $ 21,000 | |
Depreciation expense | $ 58,432 | $ 25,294 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information (Details) - Schedule of Prepaid and other assets - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of Prepaid and other assets [Abstract] | ||
Prepaid expenses | $ 151,109 | $ 118,010 |
Deferred offering costs | 92,934 | |
Other | 601 | |
Total | $ 244,043 | $ 118,611 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information (Details) - Schedule of intangible assets - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangibles, beginning | $ 156,523 | $ 178,838 |
Less: amortization | (22,316) | (22,315) |
Net Intangibles, ending | $ 134,207 | $ 156,523 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangibles, useful lives | 12 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangibles, useful lives | 13 years |
Supplemental Balance Sheet In_6
Supplemental Balance Sheet Information (Details) - Schedule of property and equipment - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of property and equipment [Abstract] | ||
Equipment and furniture | $ 311,486 | $ 195,756 |
Software | 1,895 | 1,895 |
Total property and equipment | 313,381 | 197,651 |
Less accumulated depreciation | (90,052) | (31,620) |
Property and equipment, net | $ 223,329 | $ 166,031 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) | 12 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Paycheck protection program, description | The PPP authorizes over $600 billion in forgivable loans to small businesses. Loan amounts may be 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. 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 $83,333 under the PPP and was recorded as a long-term liability. The PPP loan was forgiven on June 9, 2021 by the U.S. Small Business Administration and was reflected as other income in the accompanying statements of operations. Interest was nominal during the years ended September 30, 2021 and 2020. |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities (Details) - Schedule of accrued expenses - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of accrued expenses [Abstract] | ||
Accrued payroll | $ 376,236 | $ 238,212 |
Operating lease liability, short term | 112,778 | 57,848 |
Accrued issuance costs | 50,400 | |
Royalty Fees | 72,083 | |
Other | 83,152 | 166,302 |
Total | $ 644,249 | $ 512,762 |
Zimmer Development Agreement (D
Zimmer Development Agreement (Details) - USD ($) | Dec. 15, 2020 | Jun. 30, 2021 | Apr. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Zimmer Development Agreement (Details) [Line Items] | |||||
Initial fee payment | $ 2,000,000 | ||||
Product revenue | 178,146 | ||||
Total advertising expense | 338,837 | ||||
Development Agreement [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Product revenue recognized | 64,812 | $ 1,926,566 | |||
Development Agreement [Member] | November 30, 2020 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | $ 500,000 | ||||
Development Agreement [Member] | After September 30, 2021, but on or before December 31, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | 2,500,000 | ||||
Development Agreement [Member] | After December 31, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | 1,500,000 | ||||
Scenario One [Member] | Development Agreement [Member] | April 30, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | $ 500,000 | ||||
Scenario One [Member] | Development Agreement [Member] | On or before June 30, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | $ 3,000,000 | ||||
Scenario Two [Member] | Development Agreement [Member] | Modified Connector by April 30, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | $ 500,000 | ||||
Scenario Two [Member] | Development Agreement [Member] | Modified Connector by September 30, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | 500,000 | ||||
Scenario Two [Member] | Development Agreement [Member] | After June 30, 2021, but on or before September 30, 2021 [Member] | |||||
Zimmer Development Agreement (Details) [Line Items] | |||||
Future potential milestone payments to Neuroone | $ 3,000,000 |
Zimmer Development Agreement _2
Zimmer Development Agreement (Details) - Schedule of deferred revenue - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Deferred Revenue | ||
Balance | $ 73,434 | |
Upfront initial exclusivity payment | 2,000,000 | |
Revenue recognized | (64,812) | (1,926,566) |
Balance | $ 8,622 | $ 73,434 |
Convertible Promissory Notes _3
Convertible Promissory Notes and Warrant Agreements (Details) - USD ($) | Dec. 03, 2019 | Apr. 30, 2020 | Apr. 24, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Nov. 01, 2019 |
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Outstanding voting percentage | 50.00% | |||||||||||
Issuance of fair value amount | $ 1,831,940 | |||||||||||
Changes of fair value benefit | $ 1,974 | $ 1,221,480 | ||||||||||
Issuance costs, description | In connection with the 2019 Private Placement, Paulson Investment Company, LLC (“Paulson”) received a cash commission equal to 12% of the gross proceeds from the sale of the 2019 Paulson Notes, and 10-year warrants to purchase an amount of common stock equal to 86,498 shares of common stock at an exercise price equal to $5.61 per share (the “Broker Warrants”). The issuance costs incurred during the year ended September 30, 2021 and 2020 in connection with the 2019 Paulson Private Placement were $3,053 and $865,567, respectively. Issuance costs in 2021 related to legal costs. Issuance costs in 2020 included cash commissions equal to $388,176 and legal and third-party fees in the amount of $57,756. In addition, issuance costs included the value of the Broker Warrants in the amount of $419,635. The issuance costs were recorded as a component of interest in the accompanying statements of operations. 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 – 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); ii.Revised Optional Conversion Terms – The Second 2019 Paulson Notes Amendment provided that the amount of shares to be received upon the subscriber’s optional conversion of the 2019 Paulson Notes prior to a 2019 Qualified Financing (as defined in the 2019 Paulson Notes) would have equaled: (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; and iii.Revised the Registration Date – The Second 2019 Paulson Notes Amendment provided that promptly following the earlier of (1) May 1, 2020, if the applicable subscriber converted all or a majority of the Outstanding Balance of such subscriber’s 2019 Paulson Note prior to such date; (2) the final closing of a 2019 Qualified Financing; and (3) the maturity date, the Company will enter into a registration rights agreement with the applicable subscriber containing customary and usual terms pursuant to which the Company shall agree to prepare and file with the SEC a registration statement on or prior to the 90th calendar day following the registration date, covering the resale of any common stock received on conversion of such 2019 Paulson Notes, and shares of common stock underlying the Warrants. The Second 2019 Paulson Notes Amendment was accounted for as a note extinguishment for accounting purposes given the substantive change in the optional redemption feature’s conversion formula. The fair value change in the 2019 Paulson Notes associated with the extinguishment was recorded as a loss on notes extinguishment in the accompanying statements of operations in the amount of $2,017,847 during the year ended September 30, 2020. Lastly, in connection with the Second 2019 Paulson Notes Amendment, legal costs in the amount of $1,943 were incurred and recorded as a component of interest in the accompanying statements of operations. During the years ended September 30, 2021 and 2020, the 2019 Paulson Notes were converted into 292,754 and 725,394 shares of common stock, respectively. All of the 2019 Paulson notes were converted into shares of common stock by December 31, 2020. Paulson 2020 Convertible Note Financing On April 30, 2020, the Company entered into a subscription agreement with certain accredited investors, pursuant to which the Company, in a private placement (the “2020 Paulson Private Placement”), agreed to issue and sell to the investors 13% convertible promissory notes (each, a “2020 Paulson Note” and collectively, the “2020 Paulson Notes”) and warrants (each, a “2020 Paulson Warrant” and collectively, the “2020 Paulson Warrants”) to purchase shares of the Company’s common stock. Between May 1, 2020 and June 30, 2020, the Company issued 2020 Paulson Notes in an aggregate principal amount of $5,122,700 to the Subscribers. The 2020 Paulson Private Placement was terminated on June 30, 2020. The 2020 Paulson Notes had a fixed interest rate of 13% per annum and require the Company to repay the principal and accrued and unpaid interest thereon on the earlier of December 31, 2020 or a change of control transaction. Interest on principal amounted to $81,613 during the year ended September 30, 2020 and was recorded under the net valuation change of instruments measured at fair value in the statements of operations. If the Company had raised more than $5,000,000 in an equity financing before the maturity date (the “2020 Qualified Financing”), without any action on the part of the Subscribers, all of the outstanding principal and accrued and unpaid interest of the Notes (the “Outstanding Balance”) would have been converted into that number of shares of the securities issued by the Company in the closing on the date a 2020 Qualified Financing occurred equal to: (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of the securities issued by the Company in the closing on the date a 2020 Qualified Financing occurred and (B) the volume weighted average price of the common stock for ten (10) trading days immediately preceding the 2020 Qualified Financing. If the Company had announced a transaction between the Company and any other company (or an affiliate of any such company) that was included in the S&P 500 Health Care Index as published from time to time by S&P Dow Jones Indices LLC that included an investment or upfront payments resulting in gross proceeds to the Company of at least $2,000,000 upon the execution of such transaction or definitive agreement, and provides for terms of collaboration, manufacturing, distribution, licensing or supply of the Company’s products (a “Strategic Transaction”) before the maturity date, without any action on the part of the subscribers, the Outstanding Balance would be converted into that number of shares of common stock equal to: (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the VWAP of the common stock for the ten (10) trading days immediately preceding the first announcement of the Strategic Transaction or (B) closing price of the common stock on the day preceding the first announcement by the Company of a Strategic Transaction. At any time, at the sole election of the holder of such 2020 Paulson Note, all or a portion of the Outstanding Balance could have been converted into that number of shares of common stock equal to: (i) the Outstanding Balance elected by the holder to be converted divided by (ii) 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. If a change of control transaction had occurred prior to the conversion of the 2020 Paulson Notes or the maturity date, the 2020 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 2020 Paulson Notes on a fair value basis under ASC 825 to comprehensively value and streamline the accounting for the embedded conversion options. The fair value of the 2020 Paulson Notes was significantly higher than the proceeds received as of each of the respective issuance dates given the significant redemption discount associated with the redemption provisions. The excess of fair value over proceeds at issuance amounted to $3,784,918 and was recorded to interest expense in the statements of operations during the year ended September 30, 2020. Subsequent to issuance, the fair value change of the 2020 Paulson Notes amounted to an expense of $416,951 during the year ended September 30, 2020 and was recorded under the net valuation change of instruments measured at fair value in the statements of operations. Each 2020 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 2020 Paulson Notes divided by 5.61, with an exercise price per share equal to $5.61. The 2020 Paulson Warrants are immediately exercisable and expire on April 30, 2023. The exercise price is subject to adjustment in the event of any stock dividends or splits, reverse stock split, recapitalization, reorganization or similar transaction. The Company issued 2020 Paulson Warrants exercisable for 456,564 shares of common stock in connection with all closings of the 2020 Paulson Private Placement through June 30, 2020. The 2020 Paulson warrants were deemed to be a free-standing instrument and were accounted for as equity. Given that the fair value of the 2020 Paulson Notes exceeded the proceeds received at issuance, there was no value attributed to the 2020 Paulson Warrants in the financial statements. In connection with the 2020 Paulson Private Placement, Paulson received a cash commission equal to 12% of the gross proceeds from the sale of the 2020 Paulson Notes and received 7-year warrants to purchase an amount of common stock equal to 136,971 (“Broker Warrants”). The Broker Warrants have an exercise price equal to $5.61 per share. The issuance costs incurred during the year ended September 30, 2020 in connection with the 2020 Paulson Private Placement were $1,040,213. Issuance costs included cash commissions equal to $614,725 and legal and third-party fees in the amount of $148,451. In addition, issuance costs included the value of the Broker Warrants in the amount of $277,037. The issuance costs were recorded as a component of interest in the accompanying statements of operations. | |||||||||||
Loss on notes extinguishment | $ (2,017,847) | |||||||||||
Converted notes common stock (in Shares) | 292,754 | 725,394 | ||||||||||
Gross proceeds | $ 2,000,000 | $ 13,400,000 | ||||||||||
Increase decrease in fair value | $ 416,951 | |||||||||||
Cash commissions | $ 614,725 | |||||||||||
Convertible Note financing, description | Between May 4, 2020 and July 22, 2020, certain Subscribers elected to convert $3,590,353 of the outstanding principal and interest of such Subscribers’ 2020 Paulson Notes into 1,337,459 shares of common stock. On July 23, 2020, the remaining outstanding principal and interest balance of the 2020 Paulson Notes in the amount of $1,613,961 was converted into 535,178 shares of common stock upon the announcement of the Zimmer Development Agreement that qualified as a Strategic Transaction. | |||||||||||
2019 Paulson Private Placement [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Convertible notes bear interest at fixed rate | 13.00% | |||||||||||
Warrants exercisable for shares of common stock connection (in Shares) | 288,305 | |||||||||||
Cash commission percentage rate on proceeds | 12.00% | |||||||||||
Warrant term | 7 years | |||||||||||
Paulson Convertible Note Offering [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Convertible notes bear interest at fixed rate | 13.00% | |||||||||||
Principal amount | $ 3,234,800 | |||||||||||
Warrants, description | Each 2019 Paulson Warrant granted 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 5.61, with an exercise price per share equal to $5.61. | |||||||||||
Warrants exercisable date of issuance and expire | Nov. 1, 2022 | |||||||||||
Extended maturity date, description | Extended the Maturity Date – 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 | Revised Optional Conversion Terms – The Second 2019 Paulson Notes Amendment provided that the amount of shares to be received upon the subscriber’s optional conversion of the 2019 Paulson Notes prior to a 2019 Qualified Financing (as defined in the 2019 Paulson Notes) would have equaled: (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; and | |||||||||||
Revise the registration date description | Revised the Registration Date – The Second 2019 Paulson Notes Amendment provided that promptly following the earlier of (1) May 1, 2020, if the applicable subscriber converted all or a majority of the Outstanding Balance of such subscriber’s 2019 Paulson Note prior to such date; (2) the final closing of a 2019 Qualified Financing; and (3) the maturity date, the Company will enter into a registration rights agreement with the applicable subscriber containing customary and usual terms pursuant to which the Company shall agree to prepare and file with the SEC a registration statement on or prior to the 90th calendar day following the registration date, covering the resale of any common stock received on conversion of such 2019 Paulson Notes, and shares of common stock underlying the Warrants. | |||||||||||
Non-cash interest on principal amount | $ 81,613 | |||||||||||
Interest expense related to excess of fair value over proceeds at issuance | $ 3,784,918 | |||||||||||
Warrants exercise price (in Dollars per share) | $ 5.61 | |||||||||||
Warrants to purchase of common stock shares (in Shares) | 456,564 | |||||||||||
2019 Paulson Notes [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Convertible notes bear interest at fixed rate | 13.00% | |||||||||||
Interest on principal amount | $ 5,701 | $ 213,383 | ||||||||||
Equity financing amount | 3,000,000 | |||||||||||
Second 2019 Paulson Notes Amendment [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Legal costs | $ 1,943 | |||||||||||
2020 Paulson Private Placement [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Interest rate | 13% | |||||||||||
Issuance costs incurred | $ 1,040,213 | |||||||||||
2020 Paulson Notes [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Aggregate principal amount | $ 5,122,700 | |||||||||||
Common Stock [Member] | Paulson Private Placement [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Warrants to purchase of common stock shares (in Shares) | 136,971 | |||||||||||
Legal and third party fee | $ 148,451 | |||||||||||
Broker Warrants [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
Warrants exercise price (in Dollars per share) | $ 5.61 | |||||||||||
Issuance costs | $ 277,037 | |||||||||||
2019 Qualified Financing [Member] | Paulson Convertible Note Offering [Member] | ||||||||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | ||||||||||||
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. |
Convertible Promissory Notes _4
Convertible Promissory Notes and Warrant Agreements (Details) - Schedule of convertible promissory notes and warrant agreements - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of convertible promissory notes and warrant agreements [Abstract] | ||
Paulson convertible notes, principal | $ 546,000 | |
Accrued interest | 63,458 | |
Fair value adjustments | 397,748 | |
Total | $ 1,007,206 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Jul. 31, 2021 | Apr. 30, 2021 | Aug. 31, 2020 | Feb. 29, 2020 | Oct. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-Based Compensation (Details) [Line Items] | |||||||
Stock options, granted | 703,117 | 334,731 | |||||
Vested over a period term | 10 years | ||||||
Total expense (in Dollars) | $ 983,301 | $ 798,242 | |||||
Exercise price of the underlying option (in Dollars per share) | $ 3.95 | $ 3.86 | |||||
Outstanding stock options | 1,055,376 | 467,327 | |||||
Stock options vested | 280,557 | 198,191 | |||||
Compensation expense related to the stock awards (in Dollars) | $ 645,910 | $ 641,716 | |||||
Unrecognized stock-based compensation (in Dollars) | $ 1.7 | ||||||
Weighted average period | 2 years 10 months 24 days | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Total expense (in Dollars) | $ 163,988 | $ 396,012 | |||||
Restricted stock units vested | 29,090 | 59,793 | |||||
RSUs forfeited shares | 0 | 2,335 | |||||
Board of Directors [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Stock options, granted | 13,776 | 78,323 | |||||
Vested over a period term | 2 years | 2 years | |||||
Grant date fair value (in Dollars per share) | $ 7.26 | $ 6.27 | |||||
Stock Options [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Stock options, granted | 703,117 | 334,731 | |||||
Weighted average grant date fair value, per share (in Dollars per share) | $ 3.01 | $ 3.03 | |||||
Vested over a period term | 4 years | ||||||
2021 Activity [Member] | Two consulting agreements [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares of common stock | 11,668 | 62,659 | |||||
2020 Activity [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Consulting agreements description | an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company repurchase. The stock award under the agreement vests over a six-month period. As of September 30, 2021 and 2020, 33,333 and 6,667 shares vested under this agreement, respectively. | an additional consulting agreement was executed whereby up to 30,000 shares of common stock were issued and vested as of September 30, 2020 under this agreement. In addition, on May 21, 2020, 22,195 shares of common stock were issued as compensation to a former 2019 Paulson Note holder related to a prior 2019 Paulson Note conversion and release of liability. | two consulting agreements were executed whereby up to 38,334 shares of common stock were issued and vested as of September 30, 2020. On April 22, 2020, the Company entered into an amendment (the “Amendment”) to one of the consulting agreements. Pursuant to the Amendment, the Company issued an additional 11,667 shares in exchange for consulting services of which 11,667 shares of common stock were vested as of September 30, 2020 under the Amendment. Vesting was based on a time-based vesting condition ranging over a three to nine-month period commencing upon the execution of the consulting agreements. | ||||
Minimum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Vesting points (in Dollars per share) | $ 4.53 | ||||||
Maximum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Vesting points (in Dollars per share) | $ 7.95 | ||||||
2016 and 2017 Equity Incentive Plans [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares of common stock | 764,089 | ||||||
2017 Plan [Member] | Stock Options [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares reserved, description | 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 and 2020, 484,622 and 428,930 shares were added to the 2017 Plan, respectively, as a result of the evergreen provision. | ||||||
2016 and 2017 Equity Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Future issuance shares | 389,709 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total share-based compensation | $ 1,793,199 | $ 1,835,970 |
General and administrative [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total share-based compensation | 1,550,841 | 1,623,629 |
Research and development [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total share-based compensation | $ 242,358 | $ 212,341 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of stock option plan activity - USD ($) | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of stock option plan activity [Abstract] | ||||
Number of Options, Outstanding at beginning | 281,956 | 492,842 | ||
Weighted Average Exercise Price, Outstanding at beginning | $ 5.46 | $ 6.13 | ||
Weighted- Average Remaining Contractual Term (years), Outstanding at beginning | 9 years | |||
Aggregate Intrinsic Value, Outstanding at beginning | [1] | $ 343,406 | ||
Number of Options, Granted | 703,117 | 334,731 | ||
Weighted Average Exercise Price, Granted | $ 5.83 | $ 6.18 | ||
Number of Options, Exercised | (1,538) | (25,515) | ||
Weighted Average Exercise Price, Exercised | $ 6.6 | $ 0.12 | ||
Number of Options, Forfeited/Cancelled | (71,861) | (98,330) | ||
Weighted Average Exercise Price, Forfeited/Cancelled | $ 6.85 | $ 5.91 | ||
Number of Options, Outstanding at ending | 1,122,560 | 492,842 | ||
Weighted Average Exercise Price, Outstanding at ending | $ 5.89 | $ 6.13 | ||
Weighted- Average Remaining Contractual Term (years), Outstanding at ending | 8 years 9 months 18 days | 8 years 9 months 18 days | ||
Aggregate Intrinsic Value, Outstanding at ending | [1] | $ 127,339 | $ 96,088 | |
Number of Options, Vested and exercisable at ending | 481,047 | |||
Weighted Average Exercise Price, Vested and exercisable at ending | $ 5.89 | |||
Weighted- Average Remaining Contractual Term (years), Vested and exercisable at ending | 8 years 2 months 12 days | |||
Aggregate Intrinsic Value, Vested and exercisable at ending | [1] | $ 311,388 | ||
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of September 30, 2021 and 2020 of $3.95 and $3.86 per share, respectively. As of September 30, 2021 and 2020, 1,055,376 and 467,327 outstanding options, respectively, had no intrinsic value. |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model [Abstract] | ||
Expected stock price volatility | 55.90% | 53.10% |
Expected life of options (years) | 6 years | 5 years 7 months 6 days |
Expected dividend yield | 0.00% | 0.00% |
Risk free interest rate | 0.60% | 1.40% |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details) - Schedule of restricted stock unit activity - shares | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of restricted stock unit activity [Abstract] | ||
Non-vested, Number of Shares beginning | 26,698 | 10,503 |
Granted, Number of Shares | 13,776 | 78,323 |
Forfeited, Number of Shares | (2,335) | |
Vested, Number of Shares | (29,090) | (59,793) |
Non-vested, Number of Shares ending | 11,384 | 26,698 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) | Jan. 12, 2021 | Jul. 28, 2020 | Oct. 23, 2019 | Sep. 30, 2021 | Sep. 30, 2020 |
Stockholders' Deficit (Details) [Line Items] | |||||
Risk-free interest rate | 0.60% | 1.40% | |||
Expected volatility | 55.90% | 53.10% | |||
Expected life | 6 years | 5 years 7 months 6 days | |||
Expected dividend yield | 0.00% | 0.00% | |||
2021 Warrants [Member] | |||||
Stockholders' Deficit (Details) [Line Items] | |||||
Aggregate share issued (in Shares) | 4,166,682 | ||||
Purchase of warrants (in Shares) | 4,166,682 | ||||
Purchase price (in Dollars per share) | $ 3 | ||||
Total gross proceeds | $ 12,500,000 | ||||
Initial exercise price (in Dollars per share) | $ 5.25 | ||||
Fair value of warrants | $ 7,300,000 | ||||
Risk-free interest rate | 0.50% | ||||
Expected volatility | 56.00% | ||||
Expected life | 5 years | ||||
Expected dividend yield | 0.00% | ||||
Total proceeds | $ 3,700,000 | ||||
2020 Common Stock Offering [Member] | |||||
Stockholders' Deficit (Details) [Line Items] | |||||
Shares issue and sell under private placement (in Shares) | 25,000 | ||||
Offering price, per share (in Dollars per share) | $ 5.4 | ||||
Gross proceeds from private placement | $ 135,000 | ||||
2019 Common Stock Offering [Member] | |||||
Stockholders' Deficit (Details) [Line Items] | |||||
Shares issue and sell under private placement (in Shares) | 47,223 | ||||
Offering price, per share (in Dollars per share) | $ 5.4 | ||||
Gross proceeds from private placement | $ 255,000 |
Stockholders' Deficit (Detail_2
Stockholders' Deficit (Details) - Schedule of warrant activity - $ / shares | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stockholders' Deficit (Details) - Schedule of warrant activity [Line Items] | ||
Warrants, Outstanding and exercisable, Beginning (in Shares) | 3,390,320 | 2,421,940 |
Weighted Average Exercise Price, Outstanding and exercisable, Beginning | $ 7.65 | |
Weighted Average Term (years), Outstanding and exercisable, Beginning | 3 years 7 months 6 days | |
Warrants, Issued (in Shares) | 4,166,682 | 968,380 |
Exercise Price Per Warrant, Issued | $ 5.25 | $ 5.61 |
Weighted Average Exercise Price, Issued | $ 4.29 | $ 5.61 |
Weighted Average Term (years), Issued | ||
Warrants, Exercised (in Shares) | (53,194) | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Exercised | $ 5.61 | |
Weighted Average Term (years), Exercised | ||
Warrants, Forfeited (in Shares) | ||
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Term (years), Forfeited | ||
Warrants, Outstanding and exercisable, Ending (in Shares) | 7,503,808 | 3,390,320 |
Weighted Average Exercise Price, Outstanding and exercisable, Ending | $ 6.06 | $ 7.05 |
Weighted Average Term (years), Outstanding and exercisable, Ending | 3 years 2 months 23 days | 2 years 10 months 20 days |
Minimum [Member] | ||
Stockholders' Deficit (Details) - Schedule of warrant activity [Line Items] | ||
Exercise Price Per Warrant, Outstanding and exercisable, Beginning | $ 5.4 | |
Weighted Average Exercise Price, Exercised | $ 5.61 | |
Exercise Price Per Warrant, Outstanding and exercisable, Ending | 5.25 | 5.4 |
Maximum [Member] | ||
Stockholders' Deficit (Details) - Schedule of warrant activity [Line Items] | ||
Exercise Price Per Warrant, Outstanding and exercisable, Beginning | 9 | |
Weighted Average Exercise Price, Exercised | 8.25 | |
Exercise Price Per Warrant, Outstanding and exercisable, Ending | $ 9 | $ 9 |
Stockholders' Deficit (Detail_3
Stockholders' Deficit (Details) - Schedule of summarizes information about warrants outstanding - Warrant [Member] | 12 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Number Outstanding, Total | 7,503,808 |
Number Exercisable , Total | 7,503,808 |
5.25 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 5.25 |
Number Outstanding, Total | 4,166,682 |
Weighted Average Remaining Contractual life (Years), Total | 4 years 3 months 14 days |
Number Exercisable , Total | 4,166,682 |
5.40 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 5.4 |
Number Outstanding, Total | 750,364 |
Weighted Average Remaining Contractual life (Years), Total | 1 month 20 days |
Number Exercisable , Total | 750,364 |
5.61 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 5.61 |
Number Outstanding, Total | 916,753 |
Weighted Average Remaining Contractual life (Years), Total | 2 years 8 months 4 days |
Number Exercisable , Total | 916,753 |
6.00 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 6 |
Number Outstanding, Total | 45,173 |
Weighted Average Remaining Contractual life (Years), Total | 2 years 9 months |
Number Exercisable , Total | 45,173 |
7.50 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 7.5 |
Number Outstanding, Total | 279,733 |
Weighted Average Remaining Contractual life (Years), Total | 2 years 4 months 28 days |
Number Exercisable , Total | 279,733 |
8.25 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 8.25 |
Number Outstanding, Total | 62,911 |
Weighted Average Remaining Contractual life (Years), Total | 2 years 9 months |
Number Exercisable , Total | 62,911 |
9.00 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 9 |
Number Outstanding, Total | 1,282,192 |
Weighted Average Remaining Contractual life (Years), Total | 2 years 2 months 4 days |
Number Exercisable , Total | 1,282,192 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
Gross deferred tax assets | $ 8,873,000 | $ 5,695,000 |
Valuation allowance | 8,808,000 | 5,695,000 |
Federal net operating loss carryforwards | 26,355,000 | 17,175,000 |
Federal research credit carryforwards | 506,000 | 272,000 |
State net operating loss carryforwards | 26,355,000 | 17,175,000 |
State tax credit carry forward | $ 307,000 | $ 178,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of reconciliation of income tax computed at the statutory federal income tax rate | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of reconciliation of income tax computed at the statutory federal income tax rate [Abstract] | ||
Income tax benefit at federal statutory rate | (21.00%) | (21.00%) |
State income tax, net of federal benefit | (7.70%) | (7.70%) |
Disqualified interest and other | 17.00% | |
Research credits | (3.70%) | (1.30%) |
Stock-based compensation | 1.00% | 0.20% |
Valuation allowance | 31.40% | 12.80% |
Effective tax rate |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of deferred tax assets and liabilities - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred tax assets: | ||
Federal and state operating loss carryforwards | $ 7,575,069 | $ 4,936,384 |
Acquired intangibles | 24,541 | 22,635 |
Accruals and other | 8,370 | 30,406 |
Research and development credit carryforwards | 812,781 | 450,081 |
Stock-based compensation | 451,757 | 255,068 |
Total deferred tax assets | 8,872,518 | 5,694,574 |
Deferred tax liabilities: | ||
Fixed assets | (64,189) | |
Total deferred tax liabilities | (64,189) | |
Valuation allowance | (8,808,329) | (5,694,574) |
Net deferred tax assets |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Retirement Benefits [Abstract] | ||
Employees compensation percentage | 100.00% | |
Deferrals percentage | 100.00% | |
Contributions percentage | 3.00% | |
Internal Revenue percentage | 100.00% | |
Contributions amount (in Dollars) | $ 14,803 | $ 14,803 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 04, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Oct. 13, 2021 |
Subsequent Events [Abstract] | ||||
Shares are authorized for future issuance | 420,350 | |||
Underwriting agreement, description | the Company, entered into an Underwriting Agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC, as underwriter (the “Underwriter”), relating to the issuance and sale of 3,750,000 shares of the Company’s common stock at a price to the public of $3.20 per share. In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days, to purchase up to an additional 562,500 shares of common stock on the same terms. The base offering closed on October 15, 2021, and the sale of 422,057 shares of common stock subject to the Underwriter’s overallotment option closed on November 15, 2021. Deferred offering costs in connection with the offering amounted to $92,934 and are reflected in the prepaid and other assets line item in the accompanying balance sheets as of September 30, 2021. | |||
Gross proceeds | $ 2,000,000 | $ 13,400,000 |