Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | ADIAL PHARMACEUTICALS, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 17,503,522 | |
Amendment Flag | false | |
Entity Central Index Key | 0001513525 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity File Number | 001-38323 | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 5,637,907 | $ 4,401,114 |
Prepaid research and development | 236,882 | 233,035 |
Prepaid expenses and other current assets | 297,510 | 501,689 |
Total Current Assets | 6,172,299 | 5,135,838 |
Other Assets: | ||
Research and development supplies | 1,548,397 | |
Right-to-use asset | 282,630 | |
Acquired in-process research and development | 455,000 | |
Goodwill | 131,495 | |
Fixed assets, net | 30,213 | |
Advance to seller | 350,000 | |
Intangible assets, net | 5,465 | 5,606 |
Total Assets | 8,625,499 | 5,491,444 |
Current Liabilities: | ||
Accounts payable | 637,400 | 648,739 |
Accrued expenses | 1,331,449 | 856,639 |
Lease liability, current | 44,403 | |
Note payable | 29,088 | |
Total Current Liabilities | 2,042,340 | 1,505,378 |
Lease liability, net of current portion | 239,505 | |
Contingent liabilities | 726,012 | |
Total Liabilities | 3,007,857 | 1,505,378 |
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, 2021 and December 31, 2020 | ||
Common Stock, 50,000,000 shares authorized with a par value of $0.001 per share, 17,269,877 and 14,393,100 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 17,270 | 14,393 |
Additional paid in capital | 41,953,925 | 35,491,462 |
Accumulated deficit | (36,353,553) | (31,519,789) |
Total Shareholders’ Equity | 5,617,642 | 3,986,066 |
Total Liabilities and Shareholders’ Equity | $ 8,625,499 | $ 5,491,444 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,269,877 | 14,393,100 |
Common stock, shares outstanding | 17,269,877 | 14,393,100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Expenses: | ||
Research and development expenses | $ 2,051,623 | $ 1,059,578 |
General and administrative expenses | 2,788,711 | 1,240,667 |
Total Operating Expenses | 4,840,334 | 2,300,245 |
Loss From Operations | (4,840,334) | (2,300,245) |
Other Income (Expense) | ||
Gain on change in value of contingent liability | 6,275 | |
Interest income | 295 | 23,432 |
Total Other Income (Expense) | 6,570 | 23,432 |
Loss Before Provision For Income Taxes | (4,833,764) | (2,276,813) |
Benefit from income taxes | ||
Net Loss | $ (4,833,764) | $ (2,276,813) |
Net loss per share, basic and diluted (in Dollars per share) | $ (0.30) | $ (0.22) |
Weighted average shares, basic and diluted (in Shares) | 15,911,897 | 10,497,325 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 10,368 | $ 27,757,017 | $ (20,626,799) | $ 7,140,586 |
Balance (in 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 (in 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 (in Shares) at Mar. 31, 2020 | 10,629,603 | |||
Balance at Dec. 31, 2020 | $ 14,393 | 35,491,462 | (31,519,789) | 3,986,066 |
Balance (in Shares) at Dec. 31, 2020 | 14,393,100 | |||
Equity-based compensation - stock option expense | 473,787 | 473,787 | ||
Equity-based compensation - stock issuances to consultants and employees | $ 350 | 850,550 | 850,900 | |
Equity-based compensation - stock issuances to consultants and employees (in Shares) | 350,000 | |||
Warrants exercised | $ 712 | 1,424,288 | 1,425,000 | |
Warrants exercised | 712,500 | |||
Stock options exercised | $ 10 | 14,490 | 14,500 | |
Stock options exercised (in Shares) | 10,000 | |||
Stock issued as consideration for acquisition | $ 700 | 1,059,450 | 1,060,150 | |
Stock issued as consideration for acquisition (in Shares) | 699,980 | |||
Sale of common stock, net of transaction costs | $ 1,105 | 2,639,898 | 2,641,003 | |
Sale of common stock, net of transaction costs (in Shares) | 1,104,297 | |||
Net loss | (4,833,764) | (4,833,764) | ||
Balance at Mar. 31, 2021 | $ 17,270 | $ 41,953,925 | $ (36,353,553) | $ 5,617,642 |
Balance (in Shares) at Mar. 31, 2021 | 17,269,877 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,833,764) | $ (2,276,813) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Equity-based compensation | 1,324,687 | 570,633 |
Depreciation of fixed assets | 662 | |
Fixed Asset Disposal | 6,954 | |
Amortization of intangible assets | 141 | 141 |
Amortization of right-to-use asset | 11,663 | |
Change in fair value of contingent liability | (6,275) | |
Changes in operating assets and liabilities: | ||
Prepaid research and development expenses | (3,847) | (206,278) |
Prepaid expenses and other current assets | 204,179 | 119,117 |
Accrued expenses | 474,810 | (38,399) |
Accounts payable | (12,246) | 6,178 |
Change in operating lease liability | (10,388) | |
Net cash used in operating activities | (2,843,424) | (1,825,421) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (30,875) | |
Purchase consideration paid for acquisition, net of cash acquired | 30,589 | |
Net cash provided by (used in) investing activities | (286) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from sale of common stock | 2,641,003 | |
Proceeds from warrant exercise | 1,425,000 | |
Proceeds from options exercise | 14,500 | |
Net cash provided by financing activities | 4,080,503 | |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 1,236,793 | (1,825,421) |
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD | 4,401,114 | 6,777,052 |
CASH AND CASH EQUIVALENTS-END OF PERIOD | 5,637,907 | 4,951,631 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | ||
Income taxes paid | ||
Issuance of common stock for acquisition | 1,060,150 | |
Contingent consideration for acquisition | $ 732,287 | |
Reclassification of stock-based comp from accrued expenses | $ 117,001 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Description of Business [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, formed 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. The Company’s wholly owned subsidiary, Purnovate, Inc., was acquired on January 26, 2021, having been formed as Purnovate, LLC in December of 2019. Purnovate is a drug development company with a platform focused on developing drug candidates for non-opioid pain reduction and other diseases and disorders potentially targeted with adenosine analogs that are selective, potent, stable, and soluble. |
Liquidity, Going Concern and Ot
Liquidity, Going Concern and Other Uncertainties | 3 Months Ended |
Mar. 31, 2021 | |
Liquidity, Going Concern and Other Uncertainties [Abstract] | |
LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES | 2 — LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES The unaudited condensed consolidated 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 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 $36.4 million as of March 31, 2021. Based on the current development plans for AD04 in both the U.S. and international markets and other operating requirements, the Company does not believe that the existing cash and equivalents are sufficient to fund operations for the next twelve months following the filing of these unaudited condensed consolidated financial statements, though the Company expects cash on hand to be sufficient to fund operations into the fourth quarter of 2021. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Due to the COVID-19 pandemic, during the first three quarters of 2020, the Company experienced delays in certain countries in obtaining regulatory approval required to commence the trial in such countries, resulting in significantly slowed trial enrollment (see Other Uncertainties below). Enrollment has since improved, though enrollment in higher cost sites in Scandinavia have recovered more quickly than in lower cost sites in Central and Eastern Europe. The Company presently projects completion of its Phase 3 clinical trial near in the first quarter of 2022. There continues to be uncertainties regarding the potential impact of COVID-19 on our clinical trial and the associated cash projections. While the Company’s current estimates include the overhead costs necessary to support operations during the extended trial period and other costs increases associated with conducting trial activities impacted by the pandemic, additional delays and cost increases could add to those estimates. While the Company’s cash on hand at the filing date is not sufficient to fund operation to database lock, the Company has an active equity purchase agreement (See Note 10) with Keystone Capital, LLC, which allows the sale of up to $15 million, which amount, if fully accessible, would be sufficient to fund the Company’s operations beyond one year from the filing date of these statements and through database lock. Under this equity purchase agreement, $2.85 million has already been raised as of this filing. However, there can be no guarantee that the Company will meet the conditions to use the equity line and without access to this credit line and/or additional funding, which may not be available on acceptable terms or at all, in which case 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 accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Other Uncertainties Generally, the industry in which the Company operates 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 slow, for an unforeseeable period, the conduct of the Company’s trial. The effects of the ongoing coronavirus pandemic may also increase non-trial costs such as insurance premiums, increase the demand for and cost of capital, increase loss of work time from key personnel, and negatively impact our key clinical trial vendors and supplier of our active pharmaceutical ingredient. The full extent to which the COVID-19 pandemic impacts the clinical development of AD04, the Company’s suppliers and other commercial partners, will depend on future developments that are still highly uncertain and cannot be predicted with confidence at this time, all of which could have a material adverse effect on our business, financial condition, and results of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principals of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. 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, 2020, included in the Annual Report on Form 10-K filed on March 22, 2021. The unaudited condensed consolidated financial statements represent the consolidation of the Company and its subsidiary in conformity with GAAP. All intercompany transactions have been eliminated in consolidation. Use of Estimates The preparation of unaudited condensed consolidated 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, estimated fair values of long-lived assets used to record impairment charges related to intangible assets, acquired in-process research and development (“IPR&D”) and goodwill, allocation of purchase price in business acquisitions, measurement of contingent liabilities, and income tax asset realization. In particular, the recognition of clinical trial costs is dependent on 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, 2021 and 2020 as the inclusion of all potential common shares outstanding would have an anti-dilutive effect. The total potentially dilutive common shares that were excluded for the three month periods ended March 31, 2021, and 2020 were as follows: Potentially Dilutive Common 2021 2020 Warrants to purchase common shares 7,884,936 6,595,631 Common Shares issuable on exercise of options 3,576,866 2,620,877 Total potentially dilutive Common Shares excluded 11,461,802 9,216,508 Fair Value Measurements FASB ASC 820, Fair Value Measurement, (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: ● Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). ● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). ● Level 3 inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). The fair value of cash and cash equivalents, prepaid and other current assets, accounts payable and accrued liabilities approximate their carrying value due to their short-term maturities. The lease liability are presented at their carrying value, which based on borrowing rates currently available to the Company for leases with similar terms, approximate their fair values. Non-financial assets, such as R&D supplies, IPR&D, and goodwill, are accounted for at fair value on a nonrecurring basis. Acquisition-Related Contingent Consideration In connection with the Purnovate business combination, the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approvals or sales-based milestone events. The Company determines the fair value of these obligations using various estimates that are not observable in the market and represent a Level 3 measurement within the fair value hierarchy. As of March 31, 2021, the resulting probability-weighted cash flows were discounted using a weighted average cost of capital of 43% for regulatory and sales-based milestones. March 31, Opening balance $ — Additions (732,287 ) Total gains (losses) recognized 6,275 Balance as of March 31, 2021 $ (726,012 ) Business Combinations The Company accounts for its business combinations under the provisions of Accounting Standards Codification (“ASC”) Topic 805-10, Business Combinations (“ASC 805-10”), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed are recorded at the date of acquisition at their respective fair values. For transactions that are business combinations, the Company evaluates the existence of goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. The estimated fair value of net assets acquired, including the allocation of the fair value to identifiable assets and liabilities, was determined using established valuation techniques. A fair value measurement is determined as the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. In the context of purchase accounting, the determination of fair value often involves significant judgments and estimates by management, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows, discount rates, and selection of comparable companies. The estimated fair values reflected in the purchase accounting are subject to management’s judgment. Contingent Consideration The Company records contingent consideration resulting from a business combination at fair value on the acquisition date. On a quarterly basis, the Company revalues these obligations and record increases or decreases in their fair value as an adjustment to operating expenses. Changes to contingent consideration obligations can result from adjustments to discount rates, accretion of the liability due to the passage of time, changes in our estimates of the likelihood or timing of achieving development or commercial milestones, changes in the probability of certain clinical events or changes in the assumed probability associated with regulatory approval. Intangible Assets Intangible assets generally consist of patents, purchased technology, acquired IPR&D and other intangibles. Intangible assets with definite lives are amortized based on their pattern of economic benefit over their estimated useful lives and reviewed periodically for impairment. Intangible assets related to acquired IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment. Impairment testing is performed at least annually or when a triggering event occurs that could indicate a potential impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets. Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company is organized in one reporting unit and evaluates the goodwill for the Company as a whole. We review goodwill for impairment on a reporting unit basis annually during the fourth quarter of each year and whenever events or changes in circumstances indicate the carrying value of goodwill might not be recoverable. Under the authoritative guidance issued by the FASB, the Company has the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test is performed. The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the fair value exceeds the carrying amount, then no impairment is recognized. If the carrying amount recorded exceeds the fair value calculated, then an impairment charge is recognized for the difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations. There was no impairment of goodwill for the period ended March 31, 2021. Leases The Company determines if an arrangement is a lease at inception and on the lease commencement date, the Company recognizes an asset for the right to use a leased asset and a liability based on the present value of remaining lease payments over the lease term. As the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on a third-party analysis, which is updated periodically. The incremental borrowing rate is determined using the remaining lease term as of the lease commencement date. The Company elected the package of practical expedients included in this guidance, which allows us (i) to not reassess whether any expired or existing contracts contain leases; (ii) to not reassess the lease classification for any expired or existing leases; (iii) to account for a lease and non-lease component as a single component for both its real estate and non-real estate leases; and (iv) to not reassess the initial direct costs for existing leases. Amortization and interest expense related to lease right-of-use assets and liabilities are generally calculated on a straight-line basis over the lease term. Amortization and interest expense related to previously impaired lease right-of-use assets are calculated on a front-loaded amortization pattern resulting in higher single lease expense in earlier periods. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, the Company does not have any finance leases, any material sublease arrangements or any material leases where the Company is considered the lessor. Research and Development Research and development costs are charged to expense as incurred and include supplies and other 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 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. 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. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2021 | |
Acquisition [Abstract] | |
ACQUISITION | 4 — ACQUISITION Purnovate, Inc. Acquisition – Related Party On January 26, 2021 the Company completed its business acquisition of 100% of the equity interests of Purnovate, Inc. (“Purnovate”), pursuant to the Equity Purchase Agreement, dated December 7, 2020, as amended. Mr. Stilley, Adial’s CEO, owned 28.73% of the membership interests in Purnovate and, therefore, the acquisition of Purnovate is considered a related party transaction. The acquisition of Purnovate included an in-place workforce comprised of four employees, ongoing research and development projects and pending patents, certain net working capital assets and an assumed operating lease for laboratory and office space (“Assumed Lease”). Purnovate began occupying the premises of the Assumed Lease in January, 2020 and, as a term of its lease, gained access and use to a significant library of chemical compounds and certain laboratory equipment had been abandoned by the prior tenant. On January 19, 2021, Purnovate, modified and agreed to amend the lease agreement with the landlord (a third party) of the Assumed Lease, which transferred legal title to Purnovate for all assets on the premises of the Assumed Lease while simultaneously extending its term. The Company concluded that the Purnovate Lease Amendment was completed for the benefit of the Company and therefore the acquisition of the assets were considered a separate transaction and apart from the acquisition of Purnovate in accordance with ASC 805-10-25-21. The purchase price of Purnovate consisted of cash consideration of $350,000 (excludes an $350,000 initial working capital loan to Purnovate, which assumed by Adial at acquisition through its ownership of Purnovate, Purnovate’s liability and Adial’s asset being eliminated in consolidation), the issuance 699,980 shares of Adial common stock ($2.34 at date of closing, less a discount of 35% for a discount for lack of marketability related to the restrictions on the stock-based consideration) and contingent consideration for (i) certain development milestones in an aggregate amount of up to $2,100,000 for the first time any product or compound has achieved the relevant milestone within forty five (45) days after such occurrence (ii) milestones in an aggregate amount of up to $20,000,000 for each compound commercialized, and (iii) royalties of 3.0% of Net Sales (as defined in the Purchase Agreement). The equity consideration has been placed into escrow to secure certain indemnification and other obligations of Purnovate and the Members and will be released, subject to certain terms. The Company utilized a relative fair value approach to allocate the fair value of the assets acquired in connection with the Purnovate Lease Amendment and the fair value of Purnovate’s business to the purchase price of Purnovate. Assets acquired and liabilities assumed are recorded at the date of acquisition at their respective fair values. The estimated fair value of net assets acquired, including the allocation of the fair value to identifiable assets and liabilities, was determined using established valuation techniques. The estimated fair value of the acquired IPR&D was determined using a method which reflects the present value of the operating cash flows generated by this asset after taking into account the cost to realize the revenue, and an appropriate discount rate to reflect the time value and risk associated with the invested capital. These assets are subject to impairment testing until completion or abandonment of each project. The estimated fair value of the acquired research and development supplies (library of chemical compounds and certain laboratory equipment) was determined by discounting the replacement cost of the supplies for probability of use and salvage value if unused. Book value was determined by assigning a portion of the value of consideration paid to the supplies according to the relative fair value of the supplies compared to the fair value of Purnovate’s business. The Company believes that the book value of the supplies is materially lower than their replacement cost, and that therefore the research and development expenses reported as the supplies are utilized is likely be less than the costs defrayed by their acquisition. Certain adjustments to the assessed fair values of the assets and liabilities made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. In connection with the business acquisition, the Company incurred acquisition costs of approximately $46,000 that were recognized in selling, general and administrative expense. Total consideration paid Cash consideration $ 350,000 Stock consideration 1,060,150 Contingent consideration 732,287 Total 2,142,437 Less: Assets acquired through Purnovate Lease Amendment Research and development supplies (1,548,397 ) Remaining consideration $ 594,040 The table below sets forth the allocation of the fair value of the Purnovate Net Acquired Assets and the corresponding line item in the Company’s consolidated balance sheet at the date of acquisition. Cash $ 380,589 Property and equipment 6,954 Lease right of use assets 294,294 In-process research and development 455,000 Total identifiable assets acquired 1,136,837 Accounts payable and accrued liabilities 910 Notes payable 350,000 Lease liability 294,294 Paycheck protection program loan 29,088 Total liabilities assumed 674,292 Total identifiable net assets acquired 462,545 Goodwill 131,495 Net assets acquired $ 594,040 The Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2021 include the results of operations of Purnovate since January 26, 2021 during which period Purnovate contributed an approximately $82,000 net loss. On an unaudited pro forma basis, the revenues and net income of the Company assuming the acquisition had occurred on January 1, 2020, are shown below. The unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisition occurred on January 1, 2020, nor is the financial information indicative of the results of future operations. Three months ended Three months ended Net revenue $ – $ – Net income (loss) $ (4,844,435 ) $ (2,353,313 ) |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2021 | |
Note Payable [Abstract] | |
NOTE PAYABLE | 5 – NOTE PAYABLE Note Payable – Paycheck Protection Program Loan In connection with the acquisition of Purnovate (See Note 4), the Company assumed $29,088 in loan funding from the Paycheck Protection Program (the “PPP”), established pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). Under the terms of the PPP Note and the PPP Loan, interest accrues on the outstanding principal at the rate of 1% per annum, and there is a deferment period until installment payments of principal and interest are due. The term of the PPP Note is two years, though payments greater than the monthly payment or additional payments may be made at any time without prepayment penalty but shall not relieve the Company of its obligations to pay the next succeeding monthly payment. The deferment period generally lasts until the SBA remits the loan forgiveness amount to the Bank. If we do not apply for loan forgiveness, then payments will become due and payable. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill [Abstract] | |
GOODWILL | 6 — GOODWILL The Company recorded goodwill in connection with the acquisition of Purnovate. The changes in the carrying value of goodwill for the three months March 31, 2021 are as noted in the table below: Carrying Value Balance at December 31, 2020 $ — Goodwill acquired during the period 131,495 Balance at March 31, 2021 $ 131,495 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Expenses [Abstract] | |
ACCRUED EXPENSES | 7 — ACCRUED EXPENSES Accrued expenses consist of the following: March 31, December 31, Clinical research organization services and expenses $ 990,651 $ 470,991 Employee compensation 232,983 322,437 Legal and consulting services 97,815 6,151 Minimum license royalties Clinical research organization services and expenses 10,000 40,000 Manufacturing expenses – 17,060 Total accrued expenses $ 1,331,449 $ 856,639 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8 — 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 9. 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. On September 21, 2020, the Company concluded a private placement of 357,143 unregistered shares of common stock at an above market price of $1.40 per share with Bespoke Growth Partners, Inc. (“Bespoke”). Bespoke is controlled by Mark Peikin, who serves as the Company’s non-executive Chief Development Officer (and who is neither an executive officer nor director of the Company). Net proceeds of the offering was $500,000. On December 7, 2020, the Company entered into an Equity Purchase Agreement with Purnovate, LLC to purchase all of the outstanding membership interests of Purnovate from the members of Purnovate (the “Members”), such that after the acquisition, Purnovate would be a wholly owned subsidiary of Adial. The Company’s Chief Executive Officer and board member, William B. Stilley, and another Adial board member, James W. Newman, were, directly or indirectly, members of Purnovate. Messrs. Stilley and Newman agreed to sell their membership interests on the same terms as the other Members, except that Mr. Stilley is subject to a two (2) year lock up with respect to the sale and transfer of the stock consideration that he receives so long as his employment has not been terminated by the Company without cause prior to the end of such period. Mr. Stilley owned approximately 28.7% of the membership interest of Purnovate and Mr. Newman controlled two entities that, together, own less than 1% of the membership interests of Purnovate. 12 As a result of the foregoing, the Company formed a Special Committee of independent members of its Board of Directors to review and negotiate the acquisition terms. On January 26, 2021 the acquisition was consummated, and Messrs. Stilley and Newman sold all of their membership interests in Purnovate to the Company (see Note 4). On March 11, 2021, the Company entered into Securities Purchase Agreements (the “SPAs”) with each of Bespoke, three entities controlled by James W. Newman, Jr., a member of the Company’s Board of Directors (“Newman”), and Keystone Capital Partners, LLC (“Keystone”), pursuant to which: (i) Bespoke agreed to purchase an aggregate of 336,667 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $1,010,001; (ii) Newman agreed to purchase an aggregate of 30,000 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $90,000; and (iii) Keystone agreed to purchase an aggregate of 333,334 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $1,000,002. In the three months ended March 31, 2021, the Company issued 97,001 shares of common stock for total proceeds of $291,003. At March 31, 2021, 900,000 share of common stock remained saleable under the SPA for expected remaining proceeds of $1,800,000. In connection with the SPAs, the Company entered into Registration Rights Agreements (“RRAs”), dated March 11, 2021, with each of the Investors pursuant to which the Company was obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) within thirty (30) days following the date upon which the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and use all commercially reasonable efforts to have the Registration Statement declared effective by the SEC within thirty (30) days after the Registration Statement is filed (or, in the event of a “full review” by the SEC, within sixty (60) days after the Registration Statement is filed). A registration statement on Form S-3 was filed on April 19, 2021. See Note 9 for related party vendor, consulting, and lease agreements and Note 4 for Advance to Seller. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | 9 — SHAREHOLDERS’ EQUITY Common Stock Issuances On January 26, 2021, 669,980 unregistered shares of common stock were issued to the shareholders of Purnovate, Inc., including William B. Stilley, the Company’s CEO and entities controlled by James Newman, a Director, in consideration of purchase of Purnovate, Inc., at a total cost of $1,060,150 (See Note 4.) On February 8, 2021, option to purchase 10,000 shares of common stock at an exercise price of $1.45 per share was exercised for total proceeds of $14,500. On February 25, 2021, previously registered warrants to purchase 712,500 shares at an exercise fee of $2.00 per share were exercised for a total of $1,425,000. During the three months ended March 31, 2021, the Company issued 1,007,296 shares of common stock to under the Keystone equity purchase agreement for total proceeds of $2,350,000. During the three months ended March 31, 2021, the Company issued 350,000 shares of common stock to consultants for services rendered and to employees at a total cost of $850,900. 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 September 1, 2020, by a vote of the shareholders, the number of shares issuable under the 2017 Equity Incentive Plan was increased to 5,500,000. At March 31, 2021, the Company had issued 1,159,438 shares and had outstanding 3,437,180 options to purchase shares of our common stock under the 2017 Equity Incentive Plan, as well as 139,686 options to purchase shares of common stock that were issued before this plan was adopted. Stock Options The following table provides the stock option activity for the three months ended March 31, 2021: Total Weighted Weighted Weighted Outstanding December 31, 2020 2,668,866 8.09 $ 2.48 $ 1.13 Issued 918,000 2.96 2.41 Exercised (10,000 ) 1.45 0.66 Cancelled – Outstanding March 31, 2021 3,576,866 8.38 $ 2.61 $ 1.94 Outstanding March 31, 2021, vested and exercisable 1,493,019 7.69 $ 2.87 $ 2.08 At March 31, 2021, the intrinsic value totals of the outstanding options were $1,335,934. 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, 2021: March 31, Fair Value per Share $ 2.21-3.11 Expected Term 5.75 years Expected Dividend $ — Expected Volatility 109.29-109.64 % Risk free rate 0.41-0.49 % During the three months ended March 31, 2021, 918,000 options to purchase shares of common stock were granted at a fair value of $2,213,409, an approximate weighted average fair value of $2.41 per option, to be amortized over a service a weighted average period of three years. As of March 31, 2021, $4,116,593 in unrecognized compensation expense will be recognized over a weighted average remaining service period of 1.72 years. The components of stock-based compensation expense included in the Company’s Statements of Operations for the three months ended March 31, 2021 and 2020 are as follows: Three months ended 2021 2020 Research and development options expense $ 66,632 $ 86,439 Total research and development expenses 66,632 86,439 General and administrative options and warrants expense 407,156 255,568 Stock issued to consultants and employees 850,900 228,626 Total general and administrative expenses 1,258,116 484,194 Total stock-based compensation expense $ 1,324,688 $ 570,633 Stock Warrants The following table provides the activity in warrants for the respective periods. Total Weighted Weighted Average Outstanding December 31, 2020 8,649,625 3.46 $ 4.60 $ 0.02 Issued 20,100 1.99 Exercised (712,500 ) 2.00 Outstanding March 31, 2021 7,957,225 3.13 $ 4.83 $ 0.02 This table includes warrants to purchase 91,705 shares of common stock issued to consultants, including the 20,100 issued in the three months ended March 31, 2021, with a total fair value of $140,254 at time of issue, calculated using the Black Scholes model assuming an underlying security values of ranging between $1.30 and $2.03, volatility rate ranging between 103.8% and 109.64%, a risk-free rate of 0.49%, and an expected term of 5.75 years. In the three months ended March 31, 2021, the Company recognized $34,461 in expense associated with these warrants with $53,103 remaining to be recognized. During the three months ended March 31, 2021, 712,500 warrants to purchase shares of common stock were exercised for total proceeds of $1,425,000. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10 — COMMITMENTS AND CONTINGENCIES License with University of Virginia Patent Foundation In January 2011, the Company entered into an exclusive, worldwide license agreement with the University of Virginia Patent Foundation, dba UVA Licensing and Ventures Group (“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 Company is required to use commercially reasonable efforts to achieve the goals of submitting a New Drug Application to the FDA for a licensed product by December 31, 2024 and commencing commercialization of an FDA approved product by December 31, 2025. 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 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 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. During the three months ended March 31, 2021 and 2020, the Company recognized $10,000 minimum license royalty expenses 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 MSA or a service agreement under it may be terminated by the Company, without penalty, on fourteen days written notice for scientific, administrative, or financial reasons, or if the purpose of the study becomes obsolete. 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 would not be owed. 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. On June 28, 2019, the Company and Crown Executed a change order to Service Agreement 1 increasing Crown’s fee from $3,469,530 (€2,958,835 converted to dollars at the Euro/US Dollar exchange rate of 1.1726 as of March 31, 2021) to $3,715,846 (€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. On June 15, 2020, 50% of sites had been initiated and a fourth milestone payment of €269,938 was recognized as a prepaid expense of $302,843. On October 20, 2020, 100% of sites had been initiated and a fifth milestone $319,310 was paid. On November 10, 2020, 30% of patients had been enrolled and a sixth milestone payment of $319,013 was paid. Finally, on March 24, 2021, 60% of patients had been rolled and a seventh milestone payment of $318,905 was made. At March 31, 2021, 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 100% of patients randomized 10 % $ 316,529 90% of case report form pages monitored 5 % $ 158,265 PE analysis 5 % $ 158,265 Database is locked 10 % $ 316,529 During the three months ended March 31, 2021, the Company recognized $497,294 in direct expenses associated with the Service Agreement 1, classified as R&D expense, including amortization of milestone payments and change order fees immediately recognized as expenses. On December 31, 2020 there was accrued R&D expense of $53,065 related to such direct expenses under this agreement, and on March 31, 2021 the Company had an accrued expense liability of $140,992. Service Agreement 1 also estimated approximately $2.5 million (€2.2 million) in pass-through costs, mostly fees to clinical investigators and sites, which are billed as incurred and the total contingent upon individual site rate and enrollment rates. Based on current enrollment rates and the various active clinical sites, the Company has increased its total estimated future site costs to a total of approximately $3.1 million, an estimate that could increase or decrease based on changes to individual site enrollment rates. During the three months ended March 31, 2021, the Company recognized $573,056 in costs associated with fees to investigators and sites. Lease Commitments – Purnovate lease The Company has one operating lease which consists of office space with a remaining lease term of approximately five years. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and the Company does not separate lease and non-lease components of contracts. The Company’s lease agreement does not provide for determination of the interest rate implicit in the lease. Therefore, the Company used a benchmark approach to derive an appropriate incremental borrowing rate. The Company’s incremental borrowing rate is the rate of interest that the lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived an incremental borrowing rate, which was used to discount its lease liabilities. The Company used an estimated incremental borrowing rate of 9% on January 26, 2021 for its lease contract. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. In addition, the Company does not have any finance leases, any sublease arrangements or any leases where the Company is considered the lessor. The components of lease expense, which are included in general and administrative expense, based on the underlying use of the ROU asset, were as follows: Components of total lease cost: Three months ended Operating lease expense $ 18,207 Short-term lease expense — Total lease cost $ 18,207 Supplemental cash flow information related to leases are as follows: Cash paid for amounts included in the measurement of lease liabilities: Three months ended Operating cash flows for operating leases $ 10,388 Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets $ 294,294 Supplemental balance sheet information related to leases was as follows: As of Assets Lease right of use assets $ 282,630 Total lease assets $ 282,630 Liabilities Current liabilities: Lease liability - current portion $ 44,403 Noncurrent liabilities: Lease liability, net of current portion 239,505 Total lease liability $ 283,908 The weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rates used to calculate the Company’s operating lease liabilities are as follows: As of Weighted average remaining lease term (in years) - operating leases 4.83 Weighted average discount rate - operating leases 9.00% Future lease payments included in the measurement of lease liabilities on the condensed balance sheet as of March 31, 2021, for the following five fiscal years and thereafter were as follows: Year ending December 31, Operating Leases 2021 (remaining) 50,789 2022 70,202 2023 72,687 2024 75,231 2025 77,864 2026 and thereafter 6,507 Total Minimum Lease Payments $ 353,280 Less effects of discounting (69,372 ) Present value of future minimum lease payments $ 283,908 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 had a 28.7% equity interest, for the lease of three offices at 1180 Seminole Trail, Suite 495, Charlottesville, VA 22901. The lease had a term of two years, and the monthly rent was $1,400. During the three months ended March 31, 2021, the rent expense associated with this lease was $1,400. On acquisition of Purnovate, the sublease was terminated and the Company assumed the obligations of Purnovate’s lease. 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) and 2017 Equity Incentive Plan continue unaffected. The Company recognized $93,750 in compensation expense in the both the three months ended March 31, 2021 and 2020 as a result of this agreement. 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. 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 as of the Amendment 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 fees owed for services and fixed 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. On August 19, 2020, the Company entered into a Lock-Up Agreement Extension and Right of First Refusal with Dr. Johnson (the “Lock-Up Extension”), which amended the Lock-Up Agreement that had been entered into dated December 12, 2019 (the “Lock-Up”). The Lock-Up Extension extended the term of Dr. Johnson’s Lock-Up from January 1, 2021 until April 1, 2021. In connection with the Lock-Up Extension, Dr. Johnson was released from his Lock-Up restrictions with respect to 350,000 shares of the Company’s common stock. During the three months ended March 31, 2021, the Company recognized no expenses associated with this agreement. As of March 31, 2021, the Company had recognized $147,120 in expenses, of which $108,056 were charged against cash advanced under the terms of the Amendment, leaving a net prepaid expense asset of $111,767 associated with this vendor agreement. On April 5, 2021, we entered into another Lock-Up Agreement Extension (the “Second Lock-Up Extension”), which amended the Lock-Up Extension and extended the term of Dr. Johnson’s Lock-Up from April 1, 2021 until such date as the Company shall have publicly released the data from its ONWARD™ Phase 3 pivotal trial of its lead drug candidate, AD04, in genetically identified subjects for the treatment of Alcohol Use Disorder. Other Consulting and Vendor Agreements The Company has entered into a number of agreements and work orders for future consulting, clinical trial support, and testing services, with terms ranging between 12 and 30 months. These agreements, in aggregate, commit the Company to approximately $1.0 million in future cash. 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, 2021, the Company did not have any pending legal actions. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11 — SUBSEQUENT EVENTS On April 12, 2021, 233,645 registered shares of common stock were sold under the terms of the Company’s equity purchase agreement with Keystone at a price of $2.14 per share for total proceeds of $500,000. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principals of Consolidation | Basis of Presentation and Principals of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. 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, 2020, included in the Annual Report on Form 10-K filed on March 22, 2021. The unaudited condensed consolidated financial statements represent the consolidation of the Company and its subsidiary in conformity with GAAP. All intercompany transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated 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, estimated fair values of long-lived assets used to record impairment charges related to intangible assets, acquired in-process research and development (“IPR&D”) and goodwill, allocation of purchase price in business acquisitions, measurement of contingent liabilities, and income tax asset realization. In particular, the recognition of clinical trial costs is dependent on 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, 2021 and 2020 as the inclusion of all potential common shares outstanding would have an anti-dilutive effect. The total potentially dilutive common shares that were excluded for the three month periods ended March 31, 2021, and 2020 were as follows: Potentially Dilutive Common 2021 2020 Warrants to purchase common shares 7,884,936 6,595,631 Common Shares issuable on exercise of options 3,576,866 2,620,877 Total potentially dilutive Common Shares excluded 11,461,802 9,216,508 |
Fair Value Measurements | Fair Value Measurements FASB ASC 820, Fair Value Measurement, (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: ● Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). ● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). ● Level 3 inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). The fair value of cash and cash equivalents, prepaid and other current assets, accounts payable and accrued liabilities approximate their carrying value due to their short-term maturities. The lease liability are presented at their carrying value, which based on borrowing rates currently available to the Company for leases with similar terms, approximate their fair values. Non-financial assets, such as R&D supplies, IPR&D, and goodwill, are accounted for at fair value on a nonrecurring basis. Acquisition-Related Contingent Consideration In connection with the Purnovate business combination, the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approvals or sales-based milestone events. The Company determines the fair value of these obligations using various estimates that are not observable in the market and represent a Level 3 measurement within the fair value hierarchy. As of March 31, 2021, the resulting probability-weighted cash flows were discounted using a weighted average cost of capital of 43% for regulatory and sales-based milestones. March 31, Opening balance $ — Additions (732,287 ) Total gains (losses) recognized 6,275 Balance as of March 31, 2021 $ (726,012 ) |
Business Combinations | Business Combinations The Company accounts for its business combinations under the provisions of Accounting Standards Codification (“ASC”) Topic 805-10, Business Combinations (“ASC 805-10”), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed are recorded at the date of acquisition at their respective fair values. For transactions that are business combinations, the Company evaluates the existence of goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. The estimated fair value of net assets acquired, including the allocation of the fair value to identifiable assets and liabilities, was determined using established valuation techniques. A fair value measurement is determined as the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. In the context of purchase accounting, the determination of fair value often involves significant judgments and estimates by management, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows, discount rates, and selection of comparable companies. The estimated fair values reflected in the purchase accounting are subject to management’s judgment. |
Contingent Consideration | Contingent Consideration The Company records contingent consideration resulting from a business combination at fair value on the acquisition date. On a quarterly basis, the Company revalues these obligations and record increases or decreases in their fair value as an adjustment to operating expenses. Changes to contingent consideration obligations can result from adjustments to discount rates, accretion of the liability due to the passage of time, changes in our estimates of the likelihood or timing of achieving development or commercial milestones, changes in the probability of certain clinical events or changes in the assumed probability associated with regulatory approval. |
Intangible Assets | Intangible Assets Intangible assets generally consist of patents, purchased technology, acquired IPR&D and other intangibles. Intangible assets with definite lives are amortized based on their pattern of economic benefit over their estimated useful lives and reviewed periodically for impairment. Intangible assets related to acquired IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment. Impairment testing is performed at least annually or when a triggering event occurs that could indicate a potential impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets. |
Goodwill | Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company is organized in one reporting unit and evaluates the goodwill for the Company as a whole. We review goodwill for impairment on a reporting unit basis annually during the fourth quarter of each year and whenever events or changes in circumstances indicate the carrying value of goodwill might not be recoverable. Under the authoritative guidance issued by the FASB, the Company has the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test is performed. The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the fair value exceeds the carrying amount, then no impairment is recognized. If the carrying amount recorded exceeds the fair value calculated, then an impairment charge is recognized for the difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations. There was no impairment of goodwill for the period ended March 31, 2021. |
Leases | Leases The Company determines if an arrangement is a lease at inception and on the lease commencement date, the Company recognizes an asset for the right to use a leased asset and a liability based on the present value of remaining lease payments over the lease term. As the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on a third-party analysis, which is updated periodically. The incremental borrowing rate is determined using the remaining lease term as of the lease commencement date. The Company elected the package of practical expedients included in this guidance, which allows us (i) to not reassess whether any expired or existing contracts contain leases; (ii) to not reassess the lease classification for any expired or existing leases; (iii) to account for a lease and non-lease component as a single component for both its real estate and non-real estate leases; and (iv) to not reassess the initial direct costs for existing leases. Amortization and interest expense related to lease right-of-use assets and liabilities are generally calculated on a straight-line basis over the lease term. Amortization and interest expense related to previously impaired lease right-of-use assets are calculated on a front-loaded amortization pattern resulting in higher single lease expense in earlier periods. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, the Company does not have any finance leases, any material sublease arrangements or any material leases where the Company is considered the lessor. |
Research and Development | Research and Development Research and development costs are charged to expense as incurred and include supplies and other 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 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. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of potentially dilutive common shares | Potentially Dilutive Common 2021 2020 Warrants to purchase common shares 7,884,936 6,595,631 Common Shares issuable on exercise of options 3,576,866 2,620,877 Total potentially dilutive Common Shares excluded 11,461,802 9,216,508 |
Schedule of probability-weighted cash flows were discounted using a weighted average cost of capital | March 31, Opening balance $ — Additions (732,287 ) Total gains (losses) recognized 6,275 Balance as of March 31, 2021 $ (726,012 ) |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Acquisition [Abstract] | |
Schedule of selling, general and administrative expense | Total consideration paid Cash consideration $ 350,000 Stock consideration 1,060,150 Contingent consideration 732,287 Total 2,142,437 Less: Assets acquired through Purnovate Lease Amendment Research and development supplies (1,548,397 ) Remaining consideration $ 594,040 |
Schedule of fair value of the purnovate net acquired assets and the corresponding | Cash $ 380,589 Property and equipment 6,954 Lease right of use assets 294,294 In-process research and development 455,000 Total identifiable assets acquired 1,136,837 Accounts payable and accrued liabilities 910 Notes payable 350,000 Lease liability 294,294 Paycheck protection program loan 29,088 Total liabilities assumed 674,292 Total identifiable net assets acquired 462,545 Goodwill 131,495 Net assets acquired $ 594,040 |
Schedule of financial information indicative of the results of future operations | Three months ended Three months ended Net revenue $ – $ – Net income (loss) $ (4,844,435 ) $ (2,353,313 ) |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill [Abstract] | |
Schedule of goodwill in connection with the acquisition of purnovate | Carrying Value Balance at December 31, 2020 $ — Goodwill acquired during the period 131,495 Balance at March 31, 2021 $ 131,495 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | March 31, December 31, Clinical research organization services and expenses $ 990,651 $ 470,991 Employee compensation 232,983 322,437 Legal and consulting services 97,815 6,151 Minimum license royalties Clinical research organization services and expenses 10,000 40,000 Manufacturing expenses – 17,060 Total accrued expenses $ 1,331,449 $ 856,639 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock options activity | Total Weighted Weighted Weighted Outstanding December 31, 2020 2,668,866 8.09 $ 2.48 $ 1.13 Issued 918,000 2.96 2.41 Exercised (10,000 ) 1.45 0.66 Cancelled – Outstanding March 31, 2021 3,576,866 8.38 $ 2.61 $ 1.94 Outstanding March 31, 2021, vested and exercisable 1,493,019 7.69 $ 2.87 $ 2.08 |
Schedule of black scholes valuation model to determine the fair value of the options issued | March 31, Fair Value per Share $ 2.21-3.11 Expected Term 5.75 years Expected Dividend $ — Expected Volatility 109.29-109.64 % Risk free rate 0.41-0.49 % |
Schedule of stock-based compensation expense | Three months ended 2021 2020 Research and development options expense $ 66,632 $ 86,439 Total research and development expenses 66,632 86,439 General and administrative options and warrants expense 407,156 255,568 Stock issued to consultants and employees 850,900 228,626 Total general and administrative expenses 1,258,116 484,194 Total stock-based compensation expense $ 1,324,688 $ 570,633 |
Schedule of activity in warrants | Total Weighted Weighted Average Outstanding December 31, 2020 8,649,625 3.46 $ 4.60 $ 0.02 Issued 20,100 1.99 Exercised (712,500 ) 2.00 Outstanding March 31, 2021 7,957,225 3.13 $ 4.83 $ 0.02 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future milestone payments are shown in the table below, converted to dollars from euros | Milestone Event Percent Amount 100% of patients randomized 10 % $ 316,529 90% of case report form pages monitored 5 % $ 158,265 PE analysis 5 % $ 158,265 Database is locked 10 % $ 316,529 |
Schedule of lease expense | Components of total lease cost: Three months ended Operating lease expense $ 18,207 Short-term lease expense — Total lease cost $ 18,207 |
Schedule of supplemental cash flow information related to leases | Cash paid for amounts included in the measurement of lease liabilities: Three months ended Operating cash flows for operating leases $ 10,388 Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets $ 294,294 |
Schedule of supplemental balance sheet information related to leases | As of Assets Lease right of use assets $ 282,630 Total lease assets $ 282,630 Liabilities Current liabilities: Lease liability - current portion $ 44,403 Noncurrent liabilities: Lease liability, net of current portion 239,505 Total lease liability $ 283,908 |
Schedule of weighted-average remaining lease term | As of Weighted average remaining lease term (in years) - operating leases 4.83 Weighted average discount rate - operating leases 9.00% |
Schedule of future lease payments included in the measurement of lease liabilities | Year ending December 31, Operating Leases 2021 (remaining) 50,789 2022 70,202 2023 72,687 2024 75,231 2025 77,864 2026 and thereafter 6,507 Total Minimum Lease Payments $ 353,280 Less effects of discounting (69,372 ) Present value of future minimum lease payments $ 283,908 |
Liquidity, Going Concern and _2
Liquidity, Going Concern and Other Uncertainties (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (36,353,553) | $ (31,519,789) |
Sale of stock amount | 15,000,000 | |
Equity purchase agreement | $ 2,850,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Mar. 31, 2021 |
Accounting Policies [Abstract] | |
Weighted average percentage | 43.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of potentially dilutive common shares - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of potentially dilutive common shares [Abstract] | ||
Warrants to purchase common shares | 7,884,936 | 6,595,631 |
Common Shares issuable on exercise of options | 3,576,866 | 2,620,877 |
Total potentially dilutive Common Shares excluded | 11,461,802 | 9,216,508 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of probability-weighted cash flows were discounted using a weighted average cost of capital | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Schedule of probability-weighted cash flows were discounted using a weighted average cost of capital [Abstract] | |
Opening balance | |
Additions | (732,287) |
Total gains (losses) recognized | 6,275 |
Balance as of March 31, 2021 | $ (726,012) |
Acquisition (Details)
Acquisition (Details) - USD ($) | Jan. 26, 2021 | Mar. 31, 2021 |
Acquisition [Abstract] | ||
business acquisition shares percentage | 100.00% | |
Owned membership interests | 28.73% | |
Purchase price, description | The purchase price of Purnovate consisted of cash consideration of $350,000 (excludes an $350,000 initial working capital loan to Purnovate, which assumed by Adial at acquisition through its ownership of Purnovate, Purnovate’s liability and Adial’s asset being eliminated in consolidation), the issuance 699,980 shares of Adial common stock ($2.34 at date of closing, less a discount of 35% for a discount for lack of marketability related to the restrictions on the stock-based consideration) and contingent consideration for (i) certain development milestones in an aggregate amount of up to $2,100,000 for the first time any product or compound has achieved the relevant milestone within forty five (45) days after such occurrence (ii) milestones in an aggregate amount of up to $20,000,000 for each compound commercialized, and (iii) royalties of 3.0% of Net Sales (as defined in the Purchase Agreement). The equity consideration has been placed into escrow to secure certain indemnification and other obligations of Purnovate and the Members and will be released, subject to certain terms. | |
Incurred acquisition costs | $ 46,000 | |
Net loss | $ 82,000 |
Acquisition (Details) - Schedul
Acquisition (Details) - Schedule of selling, general and administrative expense - Acquisition [Member] | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Total consideration paid | |
Cash consideration | $ 350,000 |
Stock consideration | 1,060,150 |
Contingent consideration | 732,287 |
Total | 2,142,437 |
Less: Assets acquired through Purnovate Lease Amendment | |
Research and development supplies | (1,548,397) |
Remaining consideration | $ 594,040 |
Acquisition (Details) - Sched_2
Acquisition (Details) - Schedule of fair value of the purnovate net acquired assets and the corresponding - Acquisition [Member] | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Cash | $ 380,589 |
Property and equipment | 6,954 |
Lease right of use assets | 294,294 |
In-process research and development | 455,000 |
Total identifiable assets acquired | 1,136,837 |
Accounts payable and accrued liabilities | 910 |
Notes payable | 350,000 |
Lease liability | 294,294 |
Paycheck protection program loan | 29,088 |
Total liabilities assumed | 674,292 |
Total identifiable net assets acquired | 462,545 |
Goodwill | 131,495 |
Net assets acquired | $ 594,040 |
Acquisition (Details) - Sched_3
Acquisition (Details) - Schedule of financial information indicative of the results of future operations - Acquisition [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Acquisition (Details) - Schedule of financial information indicative of the results of future operations [Line Items] | ||
Net revenue | ||
Net income (loss) | $ (4,844,435) | $ (2,353,313) |
Note Payable (Details)
Note Payable (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Debt Disclosure [Abstract] | |
Note payable | $ 29,088 |
Outstanding principal rate | 1.00% |
Paycheck protection program term | 2 years |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of goodwill in connection with the acquisition of purnovate | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Schedule of goodwill in connection with the acquisition of purnovate [Abstract] | |
Balance at December 31, 2020 | |
Goodwill acquired during the period | 131,495 |
Balance at March 31, 2021 | $ 131,495 |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of accrued expenses - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of accrued expenses [Abstract] | ||
Clinical research organization services and expenses | $ 990,651 | $ 470,991 |
Employee compensation | 232,983 | 322,437 |
Legal and consulting services | 97,815 | 6,151 |
Minimum license royalties Clinical research organization services and expenses | 10,000 | 40,000 |
Manufacturing expenses | 17,060 | |
Total accrued expenses | $ 1,331,449 | $ 856,639 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 07, 2020 | Mar. 11, 2021 | Sep. 21, 2020 | Mar. 31, 2021 |
Related Party Transactions (Details) [Line Items] | ||||
Net proceeds | $ 500,000 | $ 2,641,003 | ||
Equity purchase agreement, description | Mr. Stilley owned approximately 28.7% of the membership interest of Purnovate and Mr. Newman controlled two entities that, together, own less than 1% of the membership interests of Purnovate. | |||
Securities purchase agreements, description | three entities controlled by James W. Newman, Jr., a member of the Company’s Board of Directors (“Newman”), and Keystone Capital Partners, LLC (“Keystone”), pursuant to which: (i) Bespoke agreed to purchase an aggregate of 336,667 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $1,010,001; (ii) Newman agreed to purchase an aggregate of 30,000 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $90,000; and (iii) Keystone agreed to purchase an aggregate of 333,334 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $1,000,002. In the three months ended March 31, 2021, the Company issued 97,001 shares of common stock for total proceeds of $291,003. At March 31, 2021, 900,000 share of common stock remained saleable under the SPA for expected remaining proceeds of $1,800,000. | |||
Private Placement [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Unregistered shares | 357,143 | |||
Bespoke Growth Partners, Inc. [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Market price per share | $ 1.40 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | Oct. 09, 2017 | Feb. 25, 2021 | Feb. 08, 2021 | Jan. 26, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Shareholders' Equity (Details) [Line Items] | |||||||
Unregistered shares of common stock | 669,980 | ||||||
Stock consideration (in Dollars) | $ 1,060,150 | ||||||
Options for purchase | 918,000 | ||||||
Cash payment for warrants (in Dollars) | $ 14,500 | $ 14,500 | |||||
Warrants for purchase | 712,500 | ||||||
Warrant excercise fee (in Dollars per share) | $ 2 | ||||||
Shares issued | 1,007,296 | ||||||
Purchase agreement (in Dollars) | $ 2,350,000 | ||||||
Common stock, shares outstanding | 17,269,877 | 14,393,100 | |||||
Outstanding options intrinsic value (in Dollars) | $ 1,335,934 | ||||||
Equity-based compensation expense (in Dollars) | $ 2,213,409 | ||||||
Weighted average fair value (in Dollars per share) | $ 2.41 | ||||||
Unrecognized compensation expense (in Dollars) | $ 4,116,593 | ||||||
Weighted average remaining vesting period | 1 year 262 days | ||||||
Equity Incentive Plan [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Options for purchase | 10,000 | ||||||
Exercise price (in Dollars per share) | $ 1.45 | ||||||
Common stock shares available for issuance | 139,686 | ||||||
Option [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Common stock, shares outstanding | 3,437,180 | ||||||
Consultant [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Fair value of assumptions, description | This table includes warrants to purchase 91,705 shares of common stock issued to consultants, including the 20,100 issued in the three months ended March 31, 2021, with a total fair value of $140,254 at time of issue, calculated using the Black Scholes model assuming an underlying security values of ranging between $1.30 and $2.03, volatility rate ranging between 103.8% and 109.64%, a risk-free rate of 0.49%, and an expected term of 5.75 years. In the three months ended March 31, 2021, the Company recognized $34,461 in expense associated with these warrants with $53,103 remaining to be recognized. | ||||||
Option [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Shares issued | 350,000 | ||||||
Purchase agreement (in Dollars) | $ 850,900 | ||||||
Warrant [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Cash payment for warrants (in Dollars) | $ 1,425,000 | ||||||
Warrant [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Cash payment for warrants (in Dollars) | $ 1,425,000 | ||||||
Warrants for purchase | 712,500 | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Common stock issued, shares | 1,750,000 | 5,500,000 | 1,159,438 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Schedule of stock options activity - Warrant [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Shareholders' Equity (Details) - Schedule of stock options activity [Line Items] | |
Total Options Outstanding,Beginning Balance (in Shares) | shares | 2,668,866 |
Weighted Average Remaining Term (Years) ,Beginning Balance | 8 years 32 days |
Weighted Average Exercise Price ,Beginning Balance | $ 2.48 |
Weighted Average Fair Value at Issue ,Beginning Balance | $ 1.13 |
Total Options Outstanding,Outstanding, vested and exercisable (in Shares) | shares | 1,493,019 |
Weighted Average Remaining Term (Years),Outstanding, vested and exercisable | 7 years 251 days |
Weighted Average Exercise Price,Outstanding, vested and exercisable | $ 2.87 |
Weighted Average Fair Value at Issue ,Outstanding, vested and exercisable (in Shares) | shares | 2.08 |
Total Options Outstanding Issued (in Shares) | shares | 918,000 |
Weighted Average Exercise Price ,Issued | $ 2.96 |
Weighted Average Fair Value at Issue.Issued | $ 2.41 |
Total Options Outstanding,Exercised (in Shares) | shares | (10,000) |
Weighted Average Exercise Price,Exercised | $ 1.45 |
Weighted Average Fair Value at Issue,Exercised | $ 0.66 |
Total Options Outstanding Ending Balance (in Shares) | shares | 3,576,866 |
Weighted Average Remaining Term (Years),Ending Balance | 8 years 138 days |
Weighted Average Exercise Price,Ending Balance | $ 2.61 |
Weighted Average Fair Value at Issue,Ending Balance | $ 1.94 |
Shareholders' Equity (Details_2
Shareholders' Equity (Details) - Schedule of black scholes valuation model to determine the fair value of the options issued | 3 Months Ended |
Mar. 31, 2021USD ($)$ / shares | |
Shareholders' Equity (Details) - Schedule of black scholes valuation model to determine the fair value of the options issued [Line Items] | |
Expected Term | 5 years 9 months |
Expected Dividend (in Dollars) | $ | |
Minimum [Member] | |
Shareholders' Equity (Details) - Schedule of black scholes valuation model to determine the fair value of the options issued [Line Items] | |
Fair Value per Share (in Dollars per share) | $ 2.21 |
Expected Volatility | 109.29% |
Risk free rate | 0.41% |
Maximum [Member] | |
Shareholders' Equity (Details) - Schedule of black scholes valuation model to determine the fair value of the options issued [Line Items] | |
Fair Value per Share (in Dollars per share) | $ 3.11 |
Expected Volatility | 109.64% |
Risk free rate | 0.49% |
Shareholders' Equity (Details_3
Shareholders' Equity (Details) - Schedule of stock-based compensation expense - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of stock-based compensation expense [Abstract] | ||
Research and development options expense | $ 66,632 | $ 86,439 |
Total research and development expenses | 66,632 | 86,439 |
General and administrative options and warrants expense | 407,156 | 255,568 |
Stock issued to consultants and employees | 850,900 | 228,626 |
Total general and administrative expenses | 1,258,116 | 484,194 |
Total stock-based compensation expense | $ 1,324,687 | $ 570,633 |
Shareholders' Equity (Details_4
Shareholders' Equity (Details) - Schedule of activity in warrants | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Schedule of activity in warrants [Abstract] | |
Total Warrants ,Beginning Balance (in Shares) | shares | 8,649,625 |
Weighted Average Remaining Term (Years),Beginning Balance | 3 years 167 days |
Weighted Average Exercise Price,Beginning Balance | $ 4.60 |
Average Intrinsic Value,Beginning Balance | $ 0.02 |
Total Warrants,Issued (in Shares) | shares | 20,100 |
Weighted Average Exercise Price,Issued | $ 1.99 |
Total Warrants,Exercised (in Shares) | shares | (712,500) |
Weighted Average Exercise Price,Exercised | $ 2 |
Toal Warrants,Ending Balance (in Shares) | shares | 7,957,225 |
Weighted Average Remaining Term (Years), Ending Balance | 3 years 47 days |
Weighted Average Exercise Price, Ending Balance | $ 4.83 |
Average Intrinsic Value,Ending Balance | $ 0.02 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Oct. 10, 2020USD ($) | Dec. 12, 2019 | Sep. 30, 2019USD ($) | Jun. 05, 2019 | Nov. 16, 2018 | Dec. 31, 2021USD ($) | Mar. 24, 2021USD ($) | Feb. 26, 2021 | Oct. 20, 2020USD ($) | Mar. 01, 2020 | Feb. 27, 2020USD ($) | Feb. 27, 2020EUR (€) | Feb. 01, 2020USD ($) | Feb. 01, 2020EUR (€) | Mar. 24, 2019 | Nov. 21, 2018USD ($) | Oct. 31, 2018 | Mar. 31, 2021USD ($) | Mar. 31, 2021EUR (€) | Mar. 31, 2020USD ($) | Jun. 15, 2020 |
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
License fees and milestone payments, description | 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 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. | |||||||||||||||||||
Minimum license royalty expenses | $ 10,000 | $ 10,000 | |||||||||||||||||||
Master services agreement, description | 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. | 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. | |||||||||||||||||||
Service agreement, description | 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. On June 28, 2019, the Company and Crown Executed a change order to Service Agreement 1 increasing Crown’s fee from $3,469,530 (€2,958,835 converted to dollars at the Euro/US Dollar exchange rate of 1.1726 as of March 31, 2021) to $3,715,846 (€3,168,895) and rescheduling future milestone payments as shown below. | ||||||||||||||||||||
Initial prepayment under the agreement amount | $ 505,960 | ||||||||||||||||||||
Invoice milestone payment, percentage | 10.00% | ||||||||||||||||||||
Prepaid expenses | $ 3,847 | $ 206,278 | |||||||||||||||||||
Operating lease emaining lease term | 5 years | ||||||||||||||||||||
Estimated incremental borrowing rate | 9.00% | ||||||||||||||||||||
Future lease payments included in the measurement of lease liabilities | 5 years | 5 years | |||||||||||||||||||
Lease commitments related party, description | the Company entered into a sublease with Purnovate, LLC, a private company in which the Company’s CEO had a 28.7% equity interest, for the lease of three offices at 1180 Seminole Trail, Suite 495, Charlottesville, VA 22901. The lease had a term of two years, and the monthly rent was $1,400. During the three months ended March 31, 2021, the rent expense associated with this lease was $1,400. On acquisition of Purnovate, the sublease was terminated and the Company assumed the obligations of Purnovate’s lease. | ||||||||||||||||||||
Consulting agreement term | 3 years | ||||||||||||||||||||
Consulting agreement, description | 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) and 2017 Equity Incentive Plan continue unaffected. The Company recognized $93,750 in compensation expense in the both the three months ended March 31, 2021 and 2020 as a result of this agreement. | ||||||||||||||||||||
Amendment agreement, description | The Company had paid PEPCO $39,064 under the SOW for services rendered as of the Amendment 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 fees owed for services and fixed 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. On August 19, 2020, the Company entered into a Lock-Up Agreement Extension and Right of First Refusal with Dr. Johnson (the “Lock-Up Extension”), which amended the Lock-Up Agreement that had been entered into dated December 12, 2019 (the “Lock-Up”). The Lock-Up Extension extended the term of Dr. Johnson’s Lock-Up from January 1, 2021 until April 1, 2021. In connection with the Lock-Up Extension, Dr. Johnson was released from his Lock-Up restrictions with respect to 350,000 shares of the Company’s common stock. During the three months ended March 31, 2021, the Company recognized no expenses associated with this agreement. As of March 31, 2021, the Company had recognized $147,120 in expenses, of which $108,056 were charged against cash advanced under the terms of the Amendment, leaving a net prepaid expense asset of $111,767 associated with this vendor agreement. On April 5, 2021, we entered into another Lock-Up Agreement Extension (the “Second Lock-Up Extension”), which amended the Lock-Up Extension and extended the term of Dr. Johnson’s Lock-Up from April 1, 2021 until such date as the Company shall have publicly released the data from its ONWARD™ Phase 3 pivotal trial of its lead drug candidate, AD04, in genetically identified subjects for the treatment of Alcohol Use Disorder. | ||||||||||||||||||||
Future cash | $ 1,000,000 | ||||||||||||||||||||
Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 294,124 | ||||||||||||||||||||
Second Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 299,496 | € 269,938 | |||||||||||||||||||
Third Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 297,013 | € 269,938 | |||||||||||||||||||
Fourth Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 302,843 | € 269,938 | |||||||||||||||||||
Sites, percent | 50.00% | ||||||||||||||||||||
Fifth Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 319,310 | ||||||||||||||||||||
Sites, percent | 100.00% | ||||||||||||||||||||
Sixth Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 319,013 | ||||||||||||||||||||
Sites, percent | 30.00% | ||||||||||||||||||||
Seventh Milestone [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Prepaid expenses | $ 318,905 | ||||||||||||||||||||
Sites, percent | 60.00% | ||||||||||||||||||||
Service Agreement 1 [Member] | |||||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||
Direct expenses | 497,294 | ||||||||||||||||||||
Accrued R&D expenses | $ 53,065 | ||||||||||||||||||||
Accrued expense liability | 140,992 | ||||||||||||||||||||
Estimated cost | 2,500,000 | € 2,200,000 | |||||||||||||||||||
Estimated future site costs | 3,100,000 | ||||||||||||||||||||
Costs associated amount | $ 573,056 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future milestone payments are shown in the table below, converted to dollars from euros | 3 Months Ended |
Mar. 31, 2021USD ($) | |
100% of patients randomized [Member] | |
Commitments and Contingencies (Details) - Schedule of future milestone payments are shown in the table below, converted to dollars from euros [Line Items] | |
Milestone Event | 100% of patients randomized |
Percent Milestone Fees | 10.00% |
Amount | $ 316,529 |
90% of case report form pages monitored [Member] | |
Commitments and Contingencies (Details) - Schedule of future milestone payments are shown in the table below, converted to dollars from euros [Line Items] | |
Milestone Event | 90% of case report form pages monitored |
Percent Milestone Fees | 5.00% |
Amount | $ 158,265 |
PE analysis [Member] | |
Commitments and Contingencies (Details) - Schedule of future milestone payments are shown in the table below, converted to dollars from euros [Line Items] | |
Milestone Event | PE analysis |
Percent Milestone Fees | 5.00% |
Amount | $ 158,265 |
Database is locked [Member] | |
Commitments and Contingencies (Details) - Schedule of future milestone payments are shown in the table below, converted to dollars from euros [Line Items] | |
Milestone Event | Database is locked |
Percent Milestone Fees | 10.00% |
Amount | $ 316,529 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of lease expense | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Schedule of lease expense [Abstract] | |
Operating lease expense | $ 18,207 |
Short-term lease expense | |
Total lease cost | $ 18,207 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of supplemental cash flow information related to leases | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Schedule of supplemental cash flow information related to leases [Abstract] | |
Operating cash flows for operating leases | $ 10,388 |
Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets | $ 294,294 |
Commitments and Contingencies_6
Commitments and Contingencies (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Lease right of use assets | $ 282,630 | |
Total lease assets | 282,630 | |
Current liabilities: | ||
Lease liability - current portion | 44,403 | |
Noncurrent liabilities: | ||
Lease liability, net of current portion | 239,505 | |
Total lease liability | $ 283,908 |
Commitments and Contingencies_7
Commitments and Contingencies (Details) - Schedule of weighted-average remaining lease term | Mar. 31, 2021 |
Schedule of weighted-average remaining lease term [Abstract] | |
Weighted average remaining lease term (in years) - operating leases | 4 years 302 days |
Weighted average discount rate - operating leases | 9.00% |
Commitments and Contingencies_8
Commitments and Contingencies (Details) - Schedule of future lease payments included in the measurement of lease liabilities | Mar. 31, 2021USD ($) |
Schedule of future lease payments included in the measurement of lease liabilities [Abstract] | |
2021 (remaining) | $ 50,789 |
2022 | 70,202 |
2023 | 72,687 |
2024 | 75,231 |
2025 | 77,864 |
2026 and thereafter | 6,507 |
Total Minimum Lease Payments | 353,280 |
Less effects of discounting | (69,372) |
Present value of future minimum lease payments | $ 283,908 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Apr. 12, 2021USD ($)$ / sharesshares |
Subsequent Events (Details) [Line Items] | |
Issuance of common stock | shares | 233,645 |
Price per share | $ / shares | $ 2.14 |
Total proceeds | $ | $ 500,000 |