Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 13, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ADIAL PHARMACEUTICALS, INC. | |
Entity Central Index Key | 0001513525 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 10,629,603 | |
Entity File Number | 001-38323 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 4,951,631 | $ 6,777,052 |
Prepaid research and development | 743,194 | 536,916 |
Prepaid expenses and other current assets | 240,382 | 359,499 |
Total Current Assets | 5,935,207 | 7,673,467 |
Intangible assets, net | 6,029 | 6,170 |
Total Other Assets | 6,029 | 6,170 |
Total Assets | 5,941,236 | 7,679,637 |
Current Liabilities: | ||
Accounts payable | 196,382 | 190,204 |
Accrued expenses | 193,447 | 348,847 |
Total Current Liabilities | 389,829 | 539,051 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Preferred Stock, 5,000,000 shares authorized with a par value of $0.001 per share, 0 shares outstanding at March 31, 2020 and December 31, 2019 | ||
Common Stock, 50,000,000 shares authorized with a par value of $0.001 per share, 10,629,603 and 10,368,352 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 10,629 | 10,368 |
Additional paid in capital | 28,444,390 | 27,757,017 |
Accumulated deficit | (22,903,612) | (20,626,799) |
Total Shareholders' Equity | 5,551,407 | 7,140,586 |
Total Liabilities and Shareholders' Equity | $ 5,941,236 | $ 7,679,637 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 10,629,603 | 10,368,352 |
Common stock, shares outstanding | 10,629,603 | 10,368,352 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Expenses: | ||
Research and development expenses | $ 1,054,609 | $ 686,914 |
General and administrative expenses | 1,245,636 | 1,562,352 |
Total Operating Expenses | 2,300,245 | 2,249,266 |
Loss From Operations | (2,300,245) | (2,249,266) |
Other Income (Expense) | ||
Interest income | 23,432 | 8,378 |
Warrant modification expense | 441,763 | |
Total other income (expense) | 23,432 | (433,385) |
Loss Before Provision For Income Taxes | (2,276,813) | (2,682,651) |
Benefit from income taxes | ||
Net Loss | $ (2,276,813) | $ (2,682,651) |
Net loss per share, basic and diluted | $ (0.22) | $ (0.33) |
Weighted average shares, basic and diluted | 10,497,325 | 8,250,708 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 6,863 | $ 16,469,818 | $ (12,035,370) | $ 4,441,311 |
Balance, shares at Dec. 31, 2018 | 6,862,499 | |||
Equity-based compensation - stock option expense | 129,150 | 129,150 | ||
Equity-based compensation - stock issuances to consultants and employees | $ 94 | 154,760 | 154,854 | |
Equity-based compensation - stock issuances to consultants and employees, shares | 93,750 | |||
Warrant modification expense | 441,763 | 441,763 | ||
Sale of common stock & warrants | $ 2,845 | 9,243,404 | 9,246,249 | |
Sale of common stock & warrants, shares | 2,845,000 | |||
Offering issuance cost | (1,050,576) | (1,050,576) | ||
Exercise of warrants | $ 367 | 1,050,270 | 1,050,637 | |
Exercise of warrants, shares | 367,577 | |||
Net loss | (2,682,651) | (2,682,651) | ||
Balance at Mar. 31, 2019 | $ 10,169 | 26,438,589 | (14,718,021) | 11,730,737 |
Balance, shares at Mar. 31, 2019 | 10,168,826 | |||
Balance at Dec. 31, 2019 | $ 10,368 | 27,757,017 | (20,626,799) | 7,140,586 |
Balance, shares at Dec. 31, 2019 | 10,368,352 | |||
Equity-based compensation - stock option expense | 342,007 | 342,007 | ||
Equity-based compensation - stock issuances to consultants and employees | $ 261 | 345,366 | 345,627 | |
Equity-based compensation - stock issuances to consultants and employees, shares | 261,251 | |||
Net loss | (2,276,813) | (2,276,813) | ||
Balance at Mar. 31, 2020 | $ 10,629 | $ 28,444,390 | $ (22,903,612) | $ 5,551,407 |
Balance, shares at Mar. 31, 2020 | 10,629,603 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,276,813) | $ (2,682,651) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Equity-based compensation | 570,633 | 284,004 |
Non-cash warrant modification expense | 441,763 | |
Amortization of intangible assets | 141 | 142 |
Changes in operating assets and liabilities: | ||
Prepaid research and development expenses | (206,278) | 126,290 |
Prepaid expenses and other current assets | 119,117 | 38,125 |
Accrued expenses | (38,399) | 110,633 |
Accounts payable | 6,178 | (39,415) |
Net cash used in operating activities | (1,825,421) | (1,721,109) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from sale of common stock and warrants | 8,195,673 | |
Proceeds from warrant exercise | 1,050,637 | |
Net cash provided by financing activities | 9,246,310 | |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (1,825,421) | 7,525,201 |
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD | 6,777,052 | 3,869,043 |
CASH AND CASH EQUIVALENTS-END OF PERIOD | 4,951,631 | 11,394,244 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | ||
Income taxes paid | ||
Previously accrued expenses paid in equity | $ 117,001 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | 1 — DESCRIPTION OF BUSINESS Adial Pharmaceuticals, Inc. (the "Company" or "Adial") was converted from a limited liability company formed under the name ADial Pharmaceuticals, LLC on November 23, 2010 in the Commonwealth of Virginia to a corporation and reincorporated in Delaware on October 1, 2017. Adial is presently engaged in the development of medications for the treatment of addictions and related disorders. The Company has commenced its first Phase 3 clinical trial of its lead compound AD04 ("AD04") for the treatment of alcohol use disorder. Both the U.S. Food and Drug Administration ("FDA") and the European Medicines Authority ("EMA") have indicated they will accept heavy-drinking-based endpoints as a basis for approval for the treatment of alcohol use disorder rather than the previously required abstinence-based endpoints. Key patents have been issued in the United States, the European Union, and other jurisdictions for which the Company has exclusive license rights. The active ingredient in AD04 is ondansetron, a serotonin-3 antagonist. Due to its mechanism of action, AD04 has the potential to be used for the treatment of other addictive disorders, such as opioid use disorder, obesity, smoking, and other drug addictions. |
Liquidity, Going Concern and Ot
Liquidity, Going Concern and Other Uncertainties | 3 Months Ended |
Mar. 31, 2020 | |
Liquidity Going Concern and Other Uncertainties [Abstract] | |
LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES | 2 — LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES The unaudited condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States ("GAAP"), which contemplate continuation of the Company as a going concern. The Company is in a development stage and has not generated any revenues The Company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception and has an accumulated deficit of approximately $22.9 million as of March 31, 2020. Based on the current development plans for AD04 in both the U.S. and international markets and other operating requirements, the Company believes that the existing cash and equivalents will not be sufficient to fund operations for at least the next twelve months following the filing of these unaudited condensed financial statements. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The cash and cash equivalents as of the financial statement filing date are expected to fund operations into the fourth quarter of 2020. Due to delays in trial enrollment resulting from the current coronavirus pandemic, the Company estimates that funds currently on hand will not support the current Phase 3 clinical trial to database lock, which is the endpoint of clinical activities for our current trial. Moreover, though the Company has applied for grants that could be used for the current Phase 3 clinical trial and which, if received, would allow the Company to continue operations into the first quarter of 2021, the Company is expecting significant delays in trial enrollment resulting from the coronavirus pandemic. During such delays the Company will continue to bear the minimum overhead costs necessary to resume full trial activities when possible. The Company is also expecting other increased costs resulting from the coronavirus pandemic, such as insurance premiums. As a result, funds on hand will not be sufficient to reach database lock even if the grants to which the Company has applied are received, and the Company will need to obtain additional funding. The full extent to which the COVID-19 pandemic impacts the Company's business, the clinical development of AD04, the business of the Company's suppliers and other commercial partners, the Company's corporate development objectives and the value of and market for the Company's common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe, and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. The Company's ultimate liquidity requirements will depend upon a number of factors, including, but not limited to, clinical trial costs, the time required to complete planned trials, and the use of cash in pursuit of non-dilutive funding sources and the success or failure of such pursuit. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company's business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces. The Company's continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, grant funding, strategic relationships, or out-licensing in order to complete its current and subsequent clinical trial requirements for its lead compound, AD04. Management can provide no assurance that such financing or strategic relationships will be available on acceptable terms, or at all. Without additional funding, the Company would be required to delay, scale back or eliminate some or all of its research and development programs, which would likely have a material adverse effect on the Company and its financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. Generally, this industry subjects the Company to a number of other risks and uncertainties that can affect its operating results and financial condition. Such factors include, but are not limited to: the timing, costs and results of clinical trials and other development activities versus expectations; the ability to obtain regulatory approval to market product candidates; the ability to manufacture products successfully; competition from products sold or being developed by other companies; the price of, and demand for, Company products once approved; the ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products. The Company also faces the ongoing risk that the coronavirus pandemic may further delay, for an unforeseeable period, the conduct of the Company's trial. Additional delays would affect the Company's liquidity needs and ability to continue as a going concern. The ongoing coronavirus pandemic may also impact the Company in other ways, through the increase of non-trial costs such as insurance premiums, by increasing the demand for and cost of capital, creation of a wider economic slow down, by the loss of work time from key personnel, and through impacts on our key vendors, any of which could affect the Company's liquidity needs and ability to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions for Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. The interim operating results are not necessarily indicative of results that may be expected for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2019, included in the Annual Report on Form 10-K filed on March 20, 2020. Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of stock-based compensation, accruals associated with third party providers supporting clinical trials, and income tax asset realization. In particular, the recognition of clinical trial costs are dependent on the our own judgement, as well as the judgment of our contractors and subcontractors in their reporting of information to us. Basic and Diluted Earnings (Loss) per Share Basic and diluted earnings (loss) per share are computed based on the weighted-average outstanding shares of common stock, which are all voting shares. Diluted net loss per share is computed giving effect to all proportional shares of common stock, including stock options and warrants to the extent dilutive. Basic net loss per share was the same as diluted net loss per share for the three months ended March 31, 2020 and 2019 as the inclusion of all potential common shares outstanding would have an anti-dilutive effect. The total number of potentially dilutive common shares that were excluded at March 31, 2020 and 2019 was as follows: Potentially Dilutive Common 2020 2019 Warrants to purchase Common Shares 6,595,631 6,728,113 Common Shares issuable on exercise of options 2,620,877 1,400,967 Total potentially dilutive Common Shares excluded 9,216,508 8,129,080 Research and Development Research and development costs are charged to expense as incurred and include direct trial expenses such as fees due to contract research organizations, consultants which support the Company's research and development endeavors, the acquisition of technology rights without an alternative use, and compensation and benefits of clinical research and development personnel. Certain research and development costs, in particular fees to contract research organizations ("CROs"), are structured with milestone payments due on the occurrence of certain key events. Where such milestone payments are greater than those earned through the provision of such services, the Company recognizes a prepaid asset which is recorded as expense as services are incurred. Stock-Based Compensation The Company measures the cost of option awards based on the grant date fair value of the awards. That cost is recognized on a straight-line basis over the period during which the awardee was required to provide service in exchange for the entire award. The fair value of options is calculated using the Black-Scholes option pricing model, based on key assumptions such as the market price of shares of the Company's common stock, the expected volatility of the Company's common stock, the risk-free rate of return, and expected term of the options. The Company's estimates of these assumptions are primarily based on historical data, peer company data, government data, and the judgment of management regarding future trends. Common shares issued are valued based on the fair value of the Company's common shares as determined by the market closing price of a share of our common stock on the date of the Commitment to make the issuance. Income Taxes The Company accounts for income taxes using 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 basis and tax 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce net deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition and measurement are reflected in the period in which the change in judgment occurs. Interest and penalties related to unrecognized tax benefits are included in income tax expense. The Company has generally recorded a full valuation allowance for its tax carryforwards, reflecting the judgment of Company management that they are more likely than not to expire unused. Adoption of Recent Accounting Pronouncements Fair Value |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | 4 — ACCRUED EXPENSES Accrued liabilities consist of the following: March 31, December 31, Accrued employee compensation $ 111,769 $ 263,914 Legal and consulting services 25,350 68,056 Clinical research organization services and expenses 46,328 16,877 Minimum license royalties 10,000 – Total accrued liabilities $ 193,447 $ 348,847 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 5 — RELATED PARTY TRANSACTIONS In January 2011, the Company entered into an exclusive, worldwide license agreement with The University of Virginia Patent Foundation d/b/a the University of Virginia Licensing and Ventures Group (the "UVA LVG") for rights to make, use or sell licensed products in the United States based upon patents and patent applications made and held by UVA LVG (the "UVA LVG License"). The Company is required to pay compensation to the UVA LVG, as described Note 7. A certain percentage of these payments by the Company to the UVA LVG may then be distributed to the Company's former Chairman of the Board who currently serves as the Company's Chief Medical Officer in his capacity as inventor of the patents by the UVA LVG in accordance with their policies at the time. See Note 7 for related party vendor, consulting, and lease agreements. |
Shareholders_ Equity
Shareholders’ Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 6 — SHAREHOLDERS' EQUITY Common Stock Issuances On January 22, 2019, the Company issued 250,000 unregistered shares of common stock upon the exercise of the warrant to purchase 300,000 shares of common stock at an exercise price of $3.75 per share for a cash payment of $468,750 and the cashless exercise of the remaining warrant. On January 31, 2019, the Company issued 22,311 unregistered shares of common stock upon the full cashless exercise of a warrant to purchase 65,130 shares of common stock at an exercise price of $4.99 per share. On February 22, 2019, the Company concluded the Follow-on Offering of 2,475,000 shares of common stock and warrants to purchase 1,856,250 shares of common stock at an exercise price of $4.0625 per share. The shares of common stock and accompanying warrants were sold to the public at a price of $3.25 per share and warrant. The underwriters were granted an over-allotment option to purchase up to 371,250 shares of common stock and warrants to purchase 278,437 shares of common stock at a price of $3.25 per share of common stock and warrant. The underwriters partially exercised their over-allotment option by purchasing 370,000 shares of common stock and warrants to purchase 277,500 shares common stock. Gross proceeds of the offering, totaled $9,246,249, which after offering expenses, resulted in net proceeds of $8,195,673. On March 3, 2020, the Compensation Committee of Board of Directors of the Company awarded the Company's executive officers, William B. Stilley, Chief Executive Officer, and Joseph Truluck, Chief Financial Officer, performance bonuses for 2019, partially paid in common stock of the Company to preserve cash, of $42,000 and $21,000 in cash, respectively, and 54,167 and 27,084 shares of the Company's common stock, respectively, which shares are subject to a six-month contractual restriction on sale. Of the $180,002 total cost of these bonuses, $150,000 were recognized in the year ended December 31, 2019 as expected under these executives' contracts, and the remaining $30,002 in bonus was recognized as time of issue as Board discretionary. The cost of the equity component of these issuances was recorded as contributed equity of $117,001. During the three months ended March 31, 2020, the Company issued 180,000 shares of common stock to consultants for services rendered at a total cost of $210,300. 2017 Equity Incentive Plan On October 9, 2017, the Company adopted the Adial Pharmaceuticals, Inc. 2017 Equity Incentive Plan (the "2017 equity incentive plan"); which became effective on July 31, 2018. Initially, the aggregate number of shares of our common stock that may be issued pursuant to stock awards under the 2017 equity incentive plan was 1,750,000 shares. On August 16, by a vote of the shareholders, the number of shares issuable under the plan was increased to 3,500,000. At March 31, 2020, we had issued 614,438 shares and had outstanding 2,481,191 options to purchase shares of our common stock under the 2017 equity incentive plan. Stock Options The following table provides the stock option activity for the three months ended March 31, 2020: Total Options Outstanding Weighted Average Remaining Term (Years) Weighted Average Exercise Price Weighted Average Fair Value at Issue Outstanding December 31, 2019 1,661,466 9.14 3.38 2.38 Issued 1,100,000 10.00 1.44 1.13 Cancelled (140,589 ) 8.44 3.30 2.54 Outstanding March 31, 2020 2,620,877 9.56 2.61 1.88 Outstanding March 31, 2020, vested and exercisable 656,580 8.66 $ 3.63 $ 2.68 At March 31, 2020, the intrinsic value totals of the outstanding options were $0. The Company used the Black Scholes valuation model to determine the fair value of the options issued, using the following key assumptions for the three months ended March 31, 2020 and 2019: March 31, March 31, Fair Value per Share $ 1.44 $ 3.01-3.39 Expected Term 5.75 years 6.5 years Expected Dividend $0 $0 Expected Volatility 102.4 % 97.37-97.48 % Risk free rate 0.72 % 2.32-2.51 % Compensation expense associated with issuance of options was recognized using the straight-line method over the requisite service period. During the three months ended March 31, 2020, 1,100,000 options to purchase shares of common stock were issued at a cost of $1.13 per option, for a total cost of $1,243,000 to be amortized over a service a weighted average period of three years. As of March 31, 2020, $3,505,359 in further compensation expense resulting from issued options remained to be recognized over a weighted average remaining service period of 2.57 years. The components of stock-based compensation expense included in the Company's Statements of Operations for the three months ended March 31, 2020 and 2019 are as follows: Three months ended March 31 2020 2019 Research and development options expense 86,439 43,174 Total research and development expenses 86,439 43,174 General and administrative options expense 255,568 85,976 Stock issued to consultants and employees 228,626 154,854 Total general and administrative expenses 484,194 240,830 Total stock-based compensation expense $ 570,633 $ 284,004 Stock Warrants The following table provides the activity in warrants for the respective periods. Total Warrants Weighted Average Remaining Term (Years) Weighted Average Exercise Price Average Intrinsic Value Outstanding December 31, 2019 6,669,274 4.23 $ 5.38 0.03 Issued – NA NA NA Exercised – NA NA NA Outstanding March 31, 2020 6,669,274 3.98 $ 5.38 0.01 During the three months ended March 31, 2020, no warrants to purchase shares of common stock were either issued or exercised. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7 — COMMITMENTS AND CONTINGENCIES License with University of Virginia Patent Foundation In January 2011, the Company entered into an exclusive, worldwide license agreement with (the "UVA LVG") for rights to make, use or sell licensed products in the United States based upon the ten separate patents and patent applications made and held by UVA LVG. As consideration for the rights granted in the UVA LVG License, the Company is obligated to pay UVA LVG yearly license fees and milestone payments, as well as a royalty based on net sales of products covered by the patent-related rights. More specifically, the Company paid UVA LVG a license issue fee and is obligated to pay UVA LVG (i) annual minimum royalties of $40,000 commencing in 2017; (ii) a $20,000 milestone payments upon dosing the first patient under a Phase 3 human clinical trial of a licensed product, $155,000 upon the earlier of the completion of a Phase 3 trial of a licensed product, partnering of a licensed product, or sale of the Company, $275,000 upon acceptance of an NDA by the FDA, and $1,000,000 upon approval for sale of AD04 in the U.S., Europe or Japan; as well as (iii) royalties equal to a 2% and 1% of net sales of licensed products in countries in which a valid patent exists or does not exist, respectively, with royalties paid quarterly. In the event of a sublicense to a third party, the Company is obligated to pay royalties to UVA LVG equal to a percentage of what the Company would have been required to pay to UVA LVG had it sold the products under sublicense ourselves. In addition, the Company is required to pay to UVA LVG 15% of any sublicensing income. The license agreement may be terminated by UVA LVG upon sixty (60) days written notice if the Company breaches its obligations thereunder, including failing to make any milestone, failure to make required payments, or the failure to exercise diligence to bring licensed products to market. In the event of a termination, the Company will be obligated to pay all amounts that accrued prior to such termination. The term of the license continues until the expiration, abandonment or invalidation of all licensed patents and patent applications, and following any such expiration, abandonment or invalidation will continue in perpetuity on a royalty-free, fully paid basis. The Company executed an amendment, dated December 14, 2017, which changed the dates by which the Company, using commercially reasonable efforts, was to achieve the goals of submitting a New Drug Application to the FDA for a licensed product to December 31, 2024 (from December 31, 2023) and commencing commercialization of an FDA approved product by December 31, 2025 (from December 31, 2024). If the Company were to fail to use commercially reasonable effort and fail to meet either goal, the licensor would have the right to terminate the license. The Company executed a further amendment to the license agreement, dated December 18, 2018, changing the date at which the Company must have initiated a Phase 3 trial to December 31, 2019. On December 31, 2019, the Company executed a further amendment to the license agreement which, among other things, removed in its entirety the diligence milestone to initiate a Phase 3 clinical trial by December 31, 2019. Furthermore, the Company agreed to pay upon execution of the Amendment the diligence milestone payment of $20,000 that had been due upon initiation of a Phase 3 clinical trial. In addition, the Company agreed to use and will continue to use best efforts to dose a first patient with a Licensed Product (as defined in the License Agreement) in a Phase 3 clinical trial on or before March 31, 2020. In March of 2020, the first patient was dosed with AD04 after having joined the Company's trial, satisfying this term of the license agreement. During the three months ended March 31, 2020, the Company recognized a $10,000 minimum license royalty expense under this agreement. Clinical Research Organization (CRO) On October 31, 2018, the Company entered into a master services agreement ("MSA") with Crown CRO Oy ("Crown") for contract clinical research and consulting services. The MSA has a term of five years, automatically renewed for two-year periods, unless either party gives written notice of a decision not to renew the agreement three months prior to automatic renewal. The agreement can be terminated by the Company if, in the Company's reasonable opinion, clinical or non-clinical data support termination of the clinical research for safety reasons. On November 16, 2018, the Company and Crown entered into Service Agreement 1 under the MSA for a 24 week, multi-centered, randomized, double-blind, placebo-controlled, parallel-group, Phase 3 clinical study of the Company's lead compound, AD04. The MSA or a service agreement under it may be terminated by the Company, without penalty, on fourteen days written notice. On June 28, 2019, the Company and Crown Executed a change order to Service Agreement 1 increasing Crown's fee from $3,262,411 (€2,958,835 converted to dollars at the Euro/US Dollar exchange rate of 1.1026 as of March 31, 2020) to $3,494,024 (€3,168,895) and rescheduling future milestone payments as shown below. On November 21, 2018, the Company made the initial prepayment under the agreement of $505,960, after exchange to US dollars at the rate then prevailing. The fees are to be paid as milestones are reached on the following schedule. On September 30, 2019, the Company received an invoice for the 10% milestone payment associated with the first submission of a trial application to a national regulatory authority and recorded a prepaid expense of $294,124. On February 1, 2020, the first site initiation visit ("SIV") of a study site had been completed and the second milestone of €269,938, was recognized as a prepaid expense of $299,496. On February 27, 2020, the first potential patient for the study had been screened and the third milestone payment of €269,938 was recognized as a prepaid expense of $297,013. At March 31, 2020, the remaining future milestone payments are shown in the table below, converted to dollars from euros at the exchange rate then prevailing. Milestone Event Percent Amount 30% patients randomized 10 % $ 297,634 50% sites initiated 10 % $ 297,634 60% patients randomized 10 % $ 297,634 100% sites initiated 10 % $ 297,634 100% of patients randomized 10 % $ 297,634 90% of case report form pages monitored 5 % $ 148,817 PE analysis 5 % $ 148,817 Database is locked 10 % $ 297,634 Service Agreement 1 also estimated approximately $2.4 million (€ 2,172,000) in pass-through costs, mostly fees to clinical investigators and sites, which will be billed as incurred and the total contingent upon individual site rate and enrollment rates. In the event that the MSA or Service Order are terminated, Crown's actual costs up the date of termination will be payable by the Company, but any unrealized milestones shall not be. During the three months ended March 31, 2020, the Company recognized $34,120 in costs associated with fees to investigators and sites. During the three months ended March 31, 2020, the Company recognized $337,503 in direct expenses associated with the Service Agreement 1, classified as R&D expense, leaving a $473,639 prepaid expense asset. Lease Commitments – Related Party On March 1, 2020, the Company entered into a sublease with Purnovate, LLC, a private company in which the Company's CEO has a 35% financial interest for the lease of three offices at 1180 Seminole Trail, Suite 495, Charlottesville, VA 22901. The lease has a term of two years, and the monthly rent is $1,400. In the three months ended March 31, 2020, the rent expense associated with this lease was $1,400. Consulting Agreements – Related Party On March 24, 2019, the Company entered into a consulting agreement (the "Consulting Agreement") with Dr. Bankole A. Johnson, who at the time of the agreement was serving as the Chairman of the Board of Directors, for his service as Chief Medical Officer of the Company. The Consulting Agreement has a term of three years, unless terminated by mutual consent or by the Company for cause. Dr. Johnson resigned as Chairman of the Board of Directors at the time of execution of the consulting agreement. Under the terms of the Consulting Agreement, Dr. Johnson's annual fee of $375,000 per year is paid twice per month. On execution, Dr. Johnson received a signing bonus of $250,000 and option to purchase 250,000 shares of common stock. Dr. Johnson's participation in the Grant Incentive Plan (see below) continues unaffected. The total expense to the Company under this agreement was $93,750 in the three months ended March 31, 2020. On July 5, 2019, the Company entered into a Master Services Agreement (the "MSA") and attached statement of work with Psychological Education Publishing Company ("PEPCO") to administer a behavioral therapy program during the Company's upcoming Phase 3 clinical trial. PEPCO is owned by a related party, Dr. Bankole Johnson, the Company's Chief Medical Officer, and currently the largest stockholder in the Company. It is anticipated that the compensation to be paid to PEPCO for services under the MSA will total approximately $300,000, of which shares of the Company's common stock having a value equal to twenty percent (20%) of this total can be issued to Dr. Johnson in lieu of cash payment. On December 12, 2019, the Company entered into an Amendment (the "Amendment") to the statement of work ("SOW"). The Company had paid PEPCO $39,064 under the SOW for services rendered to date, leaving as estimated balance of $274,779 to be paid under the SOW. The Amendment provided the Company with a 20% discount on the remaining services and to fix the price of any remaining services at a total of $219,823 for all services required for the use of Brief Behavioral Compliance Enhancement Treatment (BBCET) in support of the Trial. In addition, Dr. Johnson executed a guaranty, dated December 12, 2019, of PEPCO's performance under the MSA and SOW (the "Guaranty"), together with a pledge and security agreement, dated December 12, 2019 (the "Pledge and Security Agreement"), to secure the Guaranty with 600,000 shares of the Company's common stock beneficially owned by him and a lock-up agreement, dated December 12, 2019 (the "Lock-Up"), pursuant to which he agreed not to transfer or dispose of, directly or indirectly, any shares of the Company's common stock, as currently owned by him, until after January 1, 2021. As of March 31, 2020, the Company had recognized $91,972 in expenses, of which $52,908 were charged against cash advanced under the terms of the Amendment, leaving a net prepaid expense asset of $167,095 associated with this vendor agreement. Litigation The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company's liquidity, financial condition and cash flows. At March 31, 2020, the Company did not have any pending legal actions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions for Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. The interim operating results are not necessarily indicative of results that may be expected for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2019, included in the Annual Report on Form 10-K filed on March 20, 2020. |
Reclassification | Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of stock-based compensation, accruals associated with third party providers supporting clinical trials, and income tax asset realization. In particular, the recognition of clinical trial costs are dependent on the our own judgement, as well as the judgment of our contractors and subcontractors in their reporting of information to us. |
Basic and Diluted Earnings (Loss) per Share | Basic and Diluted Earnings (Loss) per Share Basic and diluted earnings (loss) per share are computed based on the weighted-average outstanding shares of common stock, which are all voting shares. Diluted net loss per share is computed giving effect to all proportional shares of common stock, including stock options and warrants to the extent dilutive. Basic net loss per share was the same as diluted net loss per share for the three months ended March 31, 2020 and 2019 as the inclusion of all potential common shares outstanding would have an anti-dilutive effect. The total number of potentially dilutive common shares that were excluded at March 31, 2020 and 2019 was as follows: Potentially Dilutive Common 2020 2019 Warrants to purchase Common Shares 6,595,631 6,728,113 Common Shares issuable on exercise of options 2,620,877 1,400,967 Total potentially dilutive Common Shares excluded 9,216,508 8,129,080 |
Research and Development | Research and Development Research and development costs are charged to expense as incurred and include direct trial expenses such as fees due to contract research organizations, consultants which support the Company's research and development endeavors, the acquisition of technology rights without an alternative use, and compensation and benefits of clinical research and development personnel. Certain research and development costs, in particular fees to contract research organizations ("CROs"), are structured with milestone payments due on the occurrence of certain key events. Where such milestone payments are greater than those earned through the provision of such services, the Company recognizes a prepaid asset which is recorded as expense as services are incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of option awards based on the grant date fair value of the awards. That cost is recognized on a straight-line basis over the period during which the awardee was required to provide service in exchange for the entire award. The fair value of options is calculated using the Black-Scholes option pricing model, based on key assumptions such as the market price of shares of the Company's common stock, the expected volatility of the Company's common stock, the risk-free rate of return, and expected term of the options. The Company's estimates of these assumptions are primarily based on historical data, peer company data, government data, and the judgment of management regarding future trends. Common shares issued are valued based on the fair value of the Company's common shares as determined by the market closing price of a share of our common stock on the date of the Commitment to make the issuance. |
Income Taxes | Income Taxes The Company accounts for income taxes using 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 basis and tax 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce net deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition and measurement are reflected in the period in which the change in judgment occurs. Interest and penalties related to unrecognized tax benefits are included in income tax expense. The Company has generally recorded a full valuation allowance for its tax carryforwards, reflecting the judgment of Company management that they are more likely than not to expire unused. |
Adoption of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements Fair Value |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of potentially dilutive common shares | Potentially Dilutive Common 2020 2019 Warrants to purchase Common Shares 6,595,631 6,728,113 Common Shares issuable on exercise of options 2,620,877 1,400,967 Total potentially dilutive Common Shares excluded 9,216,508 8,129,080 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilties | March 31, December 31, Accrued employee compensation $ 111,769 $ 263,914 Legal and consulting services 25,350 68,056 Clinical research organization services and expenses 46,328 16,877 Minimum license royalties 10,000 – Total accrued liabilities $ 193,447 $ 348,847 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of stock options activity | Total Options Outstanding Weighted Average Remaining Term (Years) Weighted Average Exercise Price Weighted Average Fair Value at Issue Outstanding December 31, 2019 1,661,466 9.14 3.38 2.38 Issued 1,100,000 10.00 1.44 1.13 Cancelled (140,589 ) 8.44 3.30 2.54 Outstanding March 31, 2020 2,620,877 9.56 2.61 1.88 Outstanding March 31, 2020, vested and exercisable 656,580 8.66 $ 3.63 $ 2.68 |
Schedule of black scholes valuation model to determine the fair value of the options issued | March 31, March 31, Fair Value per Share $ 1.44 $ 3.01-3.39 Expected Term 5.75 years 6.5 years Expected Dividend $0 $0 Expected Volatility 102.4 % 97.37-97.48 % Risk free rate 0.72 % 2.32-2.51 % |
Schedule of stock-based compensation expense | Three months ended March 31 2020 2019 Research and development options expense 86,439 43,174 Total research and development expenses 86,439 43,174 General and administrative options expense 255,568 85,976 Stock issued to consultants and employees 228,626 154,854 Total general and administrative expenses 484,194 240,830 Total stock-based compensation expense $ 570,633 $ 284,004 |
Schedule of activity in warrants | Total Warrants Weighted Average Remaining Term (Years) Weighted Average Exercise Price Average Intrinsic Value Outstanding December 31, 2019 6,669,274 4.23 $ 5.38 0.03 Issued – NA NA NA Exercised – NA NA NA Outstanding March 31, 2020 6,669,274 3.98 $ 5.38 0.01 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of remaining future milestone payments | Milestone Event Percent Amount 30% patients randomized 10 % $ 297,634 50% sites initiated 10 % $ 297,634 60% patients randomized 10 % $ 297,634 100% sites initiated 10 % $ 297,634 100% of patients randomized 10 % $ 297,634 90% of case report form pages monitored 5 % $ 148,817 PE analysis 5 % $ 148,817 Database is locked 10 % $ 297,634 |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Description of Business (Textual) | |
Incorporation of business, date | Oct. 1, 2017 |
Incorporation country name | Delaware |
Liquidity, Going Concern and _2
Liquidity, Going Concern and Other Uncertainties (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Liquidity, Going Concern and Other Uncertainties (Textual) | ||
Accumulated deficit | $ (22,903,612) | $ (20,626,799) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Warrants to purchase Common Shares | 6,595,631 | 6,728,113 |
Common Shares issuable on exercise of options | 2,620,877 | 1,400,967 |
Total potentially dilutive Common Shares excluded | 9,216,508 | 8,129,080 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended |
Mar. 31, 2020 | |
Significant Accounting Policies (Textual) | |
Recognized income tax, description | Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Changes in recognition and measurement are reflected in the period in which the change in judgment occurs. Interest and penalties related to unrecognized tax benefits are included in income tax expense. |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued employee compensation | $ 111,769 | $ 263,914 |
Legal and consulting services | 25,350 | 68,056 |
Clinical research organization services and expenses | 46,328 | 16,877 |
Minimum license royalties | 10,000 | |
Total accrued liabilities | $ 193,447 | $ 348,847 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) - Option [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Total Options Outstanding | |
Beginning balance | shares | 1,661,466 |
Issued | shares | 1,100,000 |
Cancelled | shares | (140,589) |
Ending balance | shares | 2,620,877 |
Outstanding non-vested | shares | 656,580 |
Weighted Average Remaining Term (Years) | |
Outstanding Beginning | 9 years 1 month 20 days |
Issued | 10 years |
Cancelled | 8 years 5 months 9 days |
Outstanding Ending | 9 years 6 months 21 days |
Outstanding Ending, non-vested | 8 years 7 months 28 days |
Weighted Average Exercise Price | |
Beginning balance | $ 3.38 |
Issued | 1.44 |
Cancelled | 3.30 |
Ending balance | 2.61 |
Outstanding non vested | 3.63 |
Weighted Average Fair Value at Issue | |
Beginning balance | 2.38 |
Issued | 1.13 |
Cancelled | 2.54 |
Ending balance | $ 1.88 |
Outstanding, non- vested | shares | 2.68 |
Shareholders_ Equity (Details 1
Shareholders’ Equity (Details 1) - Black Scholes [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair value of the options | ||
Fair Value per Share | $ 1.44 | |
Expected Term | 5 years 9 months | 6 years 6 months |
Expected Dividend | $ 0 | $ 0 |
Expected Volatility | 102.40% | |
Risk free rate | 0.72% | |
Minimum [Member] | ||
Fair value of the options | ||
Fair Value per Share | $ 3.01 | |
Expected Volatility | 97.37% | |
Risk free rate | 2.32% | |
Maximum [Member] | ||
Fair value of the options | ||
Fair Value per Share | $ 3.39 | |
Expected Volatility | 97.48% | |
Risk free rate | 2.51% |
Shareholders_ Equity (Details 2
Shareholders’ Equity (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total research and development expenses | $ 1,054,609 | $ 686,914 |
Total general and administrative expenses | 1,245,636 | 1,562,352 |
Total stock-based compensation expense | 570,633 | 284,004 |
Stock Options [Member] | ||
Research and development options expense | 86,439 | 43,174 |
Total research and development expenses | 86,439 | 43,174 |
General and administrative options expense | 255,568 | 85,976 |
Stock issued to consultants and employees | 228,626 | 154,854 |
Total general and administrative expenses | 484,194 | 240,830 |
Total stock-based compensation expense | $ 570,633 | $ 284,004 |
Shareholders_ Equity (Details 3
Shareholders’ Equity (Details 3) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Total Warrants | |
Beginning balance | shares | 6,669,274 |
Issued | shares | |
Exercised | shares | |
Ending Balance | shares | 6,669,274 |
Weighted Average Remaining Term (Years) | |
Outstanding beginning | 4 years 2 months 23 days |
Outstanding ending | 3 years 11 months 23 days |
Weighted Average Exercise Price | |
Beginning balance | $ 5.38 |
Issued | |
Exercised | |
Ending balance | 5.38 |
Average Intrinsic Value | |
Beginning balance | 0.03 |
Issued | |
Exercised | |
Ending balance | $ 0.01 |
Shareholders_ Equity (Details T
Shareholders’ Equity (Details Textual) - USD ($) | Aug. 16, 2019 | Mar. 03, 2020 | Jan. 31, 2019 | Jan. 22, 2019 | Oct. 09, 2017 | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders' Deficit (Textual) | |||||||
Shares issued | 22,311 | 250,000 | |||||
Options for purchase | 1,100,000 | ||||||
Warrants for purchase | $ 65,130 | $ 300,000 | |||||
Equity-based compensation expense | $ 117,001 | $ 1,243,000 | |||||
Outstanding options intrinsic value | 0 | ||||||
Common stock exercise price | $ 4.99 | $ 3.75 | |||||
Interest and financing charges | |||||||
Weighted average remaining vesting period | 2 years 6 months 25 days | ||||||
Common stock issued price | $ 581,875 | ||||||
Further compensation expense resulting from issued options remained to be recognized | $ 3,505,359 | ||||||
Common stock, description | The Compensation Committee of Board of Directors of the Company awarded the Company’s executive officers, William B. Stilley, Chief Executive Officer, and Joseph Truluck, Chief Financial Officer, performance bonuses for 2019, partially paid in common stock of the Company to preserve cash, of $42,000 and $21,000 in cash, respectively, and 54,167 and 27,084 shares of the Company’s common stock, respectively, which shares are subject to a six-month contractual restriction on sale. The cost of these issuances was $117,002, not including the cash component. Of the $180,002 total cost of these bonuses, $150,000 were recognized in the year ended December 31, 2019 as expected under these executives’ contracts, and the remaining $30,002 in bonus was recognized as time of issue as Board discretionary. | ||||||
Option [Member] | |||||||
Stockholders' Deficit (Textual) | |||||||
Common stock exercise price | $ 1.13 | ||||||
Common stock issued, shares | 2,481,191 | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Stockholders' Deficit (Textual) | |||||||
Common stock issued, shares | 3,500,000 | 1,750,000 | 614,438 | ||||
Warrants [Member] | |||||||
Stockholders' Deficit (Textual) | |||||||
Warrant purchase, description | 93,100 previously-registered shares of common stock were issued as a result of the exercise of tradeable warrants to purchase 93,100 shares of common stock at an exercise price of $6.25 per share for cash payments of $581,875 and 61,005 unregistered shares of common stock were issued as a result of the exercise of at an exercise price of $0.005 per share for cash payments of $325. | ||||||
Consultant [Member] | |||||||
Stockholders' Deficit (Textual) | |||||||
Common stock issued, shares | 180,000 | 184,437 | |||||
Consultants at a total cost | $ 210,300 | $ 440,745 | |||||
Officers and Director [Member] | |||||||
Stockholders' Deficit (Textual) | |||||||
Common stock issued price | $ 468,750 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
30% patients randomized [Member] | |
Milestone Event | 30% patients randomized |
Percent Milestone Fees | 10.00% |
Amount | $ 297,634 |
50% sites initiated [Member] | |
Milestone Event | 50% sites initiated |
Percent Milestone Fees | 10.00% |
Amount | $ 297,634 |
60% patients randomized [Member] | |
Milestone Event | 60% patients randomized |
Percent Milestone Fees | 10.00% |
Amount | $ 297,634 |
100% sites initiated [Member] | |
Milestone Event | 100% sites initiated |
Percent Milestone Fees | 10.00% |
Amount | $ 297,634 |
100% of patients randomized [Member] | |
Milestone Event | 100% of patients randomized |
Percent Milestone Fees | 10.00% |
Amount | $ 297,634 |
90% of case report form pages monitored [Member] | |
Milestone Event | 90% of case report form pages monitored |
Percent Milestone Fees | 5.00% |
Amount | $ 148,817 |
PE analysis [Member] | |
Milestone Event | PE analysis |
Percent Milestone Fees | 5.00% |
Amount | $ 148,817 |
Database is locked [Member] | |
Milestone Event | Database is locked |
Percent Milestone Fees | 10.00% |
Amount | $ 297,634 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) | Dec. 12, 2019 | Jul. 05, 2019 | Dec. 14, 2017 | Mar. 01, 2020USD ($) | Feb. 27, 2020USD ($) | Feb. 01, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 28, 2019USD ($) | Jun. 28, 2019EUR (€) | Mar. 24, 2019USD ($)shares | Nov. 21, 2018USD ($) | Jan. 31, 2011 | Mar. 31, 2020USD ($)$ / shares | Mar. 31, 2020EUR (€) | Mar. 31, 2019USD ($) | Feb. 27, 2020EUR (€) | Feb. 01, 2020EUR (€) | Dec. 31, 2019USD ($) |
Commitments and Contingencies (Textual) | ||||||||||||||||||
Milestone payment | $ 20,000 | |||||||||||||||||
Minimum license royalty expense | $ 10,000 | |||||||||||||||||
Prepaid research and development | 743,194 | 536,916 | ||||||||||||||||
Prepaid expenses | $ 294,124 | 206,278 | $ (126,290) | |||||||||||||||
Milestone payment associated, percentage | 10.00% | |||||||||||||||||
Cash advance | $ 52,908 | |||||||||||||||||
Second Milestone [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Prepaid expenses | $ 299,496 | |||||||||||||||||
Third Milestone [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Prepaid expenses | $ 297,013 | |||||||||||||||||
Purnovate, LLC [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Monthly rent payment of lease | $ 1,400 | |||||||||||||||||
Sublease, description | The Company entered into a sublease with Purnovate, LLC, a private company in which the Company's CEO has a 35% financial interest for the lease of three offices at 1180 Seminole Trail, Suite 495, Charlottesville, VA 22901. | |||||||||||||||||
Rent expense | 1,400 | |||||||||||||||||
Consulting Agreement [Member] | Dr. Bankole A. Johnson [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Consultant fees | 93,750 | |||||||||||||||||
Annual salary | $ 375,000 | |||||||||||||||||
Bonus | $ 250,000 | |||||||||||||||||
Option to purchase | shares | 250,000 | |||||||||||||||||
Euro [Member] | Second Milestone [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Milestone payment | € | € 269,938 | |||||||||||||||||
Euro [Member] | Third Milestone [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Milestone payment | € | € 269,938 | |||||||||||||||||
Service Agreement [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Crown’s fee | $ 3,262,411 | $ 3,494,024 | ||||||||||||||||
Euro/US dollar exchange rate | $ / shares | $ 1.1026 | |||||||||||||||||
Prepayment under the agreement cost | $ 505,960 | |||||||||||||||||
Service Agreement [Member] | Euro [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Crown’s fee | € | € 2,958,835 | € 3,168,895 | ||||||||||||||||
Euro/US dollar exchange rate | $ / shares | $ 1.1026 | |||||||||||||||||
Service agreement 1 [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Cost of agreement | $ 34,120 | |||||||||||||||||
Estimated cost | 2,400,000 | |||||||||||||||||
Prepaid research and development | 473,639 | |||||||||||||||||
Direct expenses | $ 337,503 | |||||||||||||||||
Service agreement 1 [Member] | Euro [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Estimated cost | € | € 2,172,000 | |||||||||||||||||
Master Services Agreement [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Description of master services agreement | The Company entered into a Master Services Agreement (the "MSA") and attached statement of work with Psychological Education Publishing Company ("PEPCO") to administer a behavioral therapy program during the Company's upcoming Phase 3 clinical trial. PEPCO is owned by a related party, Dr. Bankole Johnson, the Company's Chief Medical Officer, and currently the largest stockholder in the Company. It is anticipated that the compensation to be paid to PEPCO for services under the MSA will total approximately $300,000, of which shares of the Company's common stock having a value equal to twenty percent (20%) of this total can be issued to Dr. Johnson in lieu of cash payment. | |||||||||||||||||
Contract research organizations, description | The Company entered into an Amendment (the "Amendment") to the statement of work ("SOW"). The Company had paid PEPCO $39,064 under the SOW for services rendered to date, leaving as estimated balance of $274,779 to be paid under the SOW. The Amendment provided the Company with a 20% discount on the remaining services and to fix the price of any remaining services at a total of $219,823 for all services required for the use of Brief Behavioral Compliance Enhancement Treatment (BBCET) in support of the Trial. In addition, Dr. Johnson executed a guaranty, dated December 12, 2019, of PEPCO's performance under the MSA and SOW (the "Guaranty"), together with a pledge and security agreement, dated December 12, 2019 (the "Pledge and Security Agreement"), to secure the Guaranty with 600,000 shares of the Company's common stock beneficially owned by him and a lock-up agreement, dated December 12, 2019 (the "Lock-Up"), pursuant to which he agreed not to transfer or dispose of, directly or indirectly, any shares of the Company's common stock, as currently owned by him, until after January 1, 2021. As of March 31, 2020, the Company had recognized $91,972 in expenses and recorded a prepaid expense asset of $167,095 associated with this vendor agreement. | |||||||||||||||||
Licensing & Venture Group [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
License agreement description | The Company is obligated to pay UVA LVG yearly license fees and milestone payments, as well as a royalty based on net sales of products covered by the patent-related rights. More specifically, the Company paid UVA LVG a license issue fee and is obligated to pay UVA LVG (i) annual minimum royalties of $40,000 commencing in 2017; (ii) a $20,000 milestone payments upon dosing the first patient under a Phase 3 human clinical trial of a licensed product, $155,000 upon the earlier of the completion of a Phase 3 trial of a licensed product, partnering of a licensed product, or sale of the Company, $275,000 upon acceptance of an NDA by the FDA, and $1,000,000 upon approval for sale of AD04 in the U.S., Europe or Japan; as well as (iii) royalties equal to a 2% and 1% of net sales of licensed products in countries in which a valid patent exists or does not exist, respectively, with royalties paid quarterly. In the event of a sublicense to a third party, the Company is obligated to pay royalties to UVA LVG equal to a percentage of what the Company would have been required to pay to UVA LVG had it sold the products under sublicense ourselves. In addition, the Company is required to pay to UVA LVG 15% of any sublicensing income. | |||||||||||||||||
License agreement notice period, description | The license agreement may be terminated by UVA LVG upon sixty (60) days written notice if the Company breaches its obligations thereunder, including failing to make any milestone, failure to make required payments, or the failure to exercise diligence to bring licensed products to market. In the event of a termination, the Company will be obligated to pay all amounts that accrued prior to such termination. | |||||||||||||||||
License agreement amendment changed dates, description | The Company, using commercially reasonable efforts, was to achieve the goals of submitting a New Drug Application to the FDA for a licensed product to December 31, 2024 (from December 31, 2023) and commencing commercialization of an FDA approved product by December 31, 2025 (from December 31, 2024). If the Company were to fail to use commercially reasonable effort and fail to meet either goal, the licensor would have the right to terminate the license. |