Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 22, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Entity Registrant Name | Artelo Biosciences, Inc. | ||
Entity Central Index Key | 0001621221 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2023 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity Common Stock Shares Outstanding | 3,227,700 | ||
Entity Public Float | $ 5,629,634 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Fin Stmt Error Correction Flag | false | ||
Entity File Number | 001-38951 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 33-1220924 | ||
Entity Address Address Line 1 | 505 Lomas Santa Fe | ||
Entity Address Address Line 2 | Suite 160 | ||
Entity Address City Or Town | Solana Beach | ||
Entity Address State Or Province | CA | ||
Entity Address Country | US | ||
Entity Address Postal Zip Code | 92075 | ||
City Area Code | 858 | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Firm Id | 206 | ||
Local Phone Number | 925-7049 | ||
Security 12b Title | Common Stock, $0.001 par value per share | ||
Trading Symbol | ARTL | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | MaloneBailey, LLP | ||
Auditor Location | Houston, Texas |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 2,815 | $ 6,888 |
Trading marketable securities | 7,611 | 9,150 |
Available-for-sale securities (amortized cost of $0 and $1,502, respectively) | 0 | 1,495 |
Prepaid expenses and other current assets | 554 | 789 |
Total Current Assets | 10,980 | 18,322 |
Operating lease right-of-use assets | 21 | 60 |
Intangible asset | 2,039 | 2,039 |
Other assets | 3 | 3 |
TOTAL ASSETS | 13,043 | 20,424 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 1,238 | 905 |
Due to related parties | 30 | 53 |
Operating lease liabilities - current portion | 23 | 40 |
Total Current Liabilities | 1,291 | 998 |
Operating lease liabilities | 0 | 23 |
TOTAL LIABILITIES | 1,291 | 1,021 |
STOCKHOLDERS' EQUITY | ||
Preferred Stock, par value $0.001, 416,667 shares authorized, 0 shares issued and outstanding as of December 31, 2023 and December 31, 2022 | 0 | 0 |
Common Stock, par value $0.001, 50,000,000 shares authorized, as of December 31, 2023 and December 31, 2022 3,188,959 and 2,855,688 shares issued and outstanding as of December 31, 2023 and December 31, 2022 | 3 | 3 |
Additional paid-in capital | 52,262 | 50,675 |
Accumulated deficit | (40,310) | (31,021) |
Accumulated other comprehensive loss | (203) | (254) |
TOTAL STOCKHOLDERS' EQUITY | 11,752 | 19,403 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 13,043 | $ 20,424 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Available-for-sale securities amortized cost, current | $ 0 | $ 1,502 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 416,667 | 416,667 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 3,188,959 | 2,855,688 |
Common Stock, Shares Outstanding | 3,188,959 | 2,855,688 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
OPERATING EXPENSES | ||
General and administrative | $ 4,234 | $ 5,963 |
Research and development | 5,696 | 4,324 |
Total Operating Expenses | 9,930 | 10,287 |
Loss from Operations | (9,930) | (10,287) |
OTHER INCOME (EXPENSE) | ||
Interest income | 0 | 2 |
Interest expense | 0 | (5) |
Net change in fair value of trading marketable securities | 641 | 207 |
Total other income | 641 | 204 |
Provision for income taxes | 0 | 0 |
NET LOSS | (9,289) | (10,083) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Unrealized (loss) gain on available-for-sale securities | 0 | (24) |
Foreign currency translation adjustments | 51 | (212) |
Total Other Comprehensive Income (Loss) | 51 | (236) |
TOTAL COMPREHENSIVE LOSS | $ (9,238) | $ (10,319) |
Basic and Diluted Loss per Common Share | $ (3.14) | $ (3.56) |
Basic and Diluted Weighted Average Common Shares Outstanding | 2,960 | 2,833 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) |
Balance, shares at Dec. 31, 2021 | 2,820 | ||||
Balance, amount at Dec. 31, 2021 | $ 27,167 | $ 3 | $ 48,120 | $ (20,938) | $ (18) |
Common shares issued as commitment fee, shares | 20 | ||||
Common shares issued as commitment fee, amount | 97 | $ 0 | 97 | 0 | 0 |
Stock based compensation | 2,458 | $ 0 | 2,458 | 0 | 0 |
Reverse stock split adjustment, shares | 16 | ||||
Reverse stock split adjustment, amount | 0 | $ 0 | 0 | 0 | 0 |
Net loss for the period | (10,083) | 0 | 0 | (10,083) | 0 |
Other comprehensive loss | (236) | $ 0 | 0 | 0 | (236) |
Balance, shares at Dec. 31, 2022 | 2,856 | ||||
Balance, amount at Dec. 31, 2022 | 19,403 | $ 3 | 50,675 | (31,021) | (254) |
Stock based compensation | 1,020 | 0 | 1,020 | 0 | 0 |
Net loss for the period | (9,289) | 0 | 0 | (9,289) | 0 |
Other comprehensive loss | 51 | $ 0 | 0 | 0 | 51 |
Issuance of common shares, shares | 333 | ||||
Issuance of common shares, amount | 567 | $ 0 | 567 | 0 | 0 |
Balance, shares at Dec. 31, 2023 | 3,189 | ||||
Balance, amount at Dec. 31, 2023 | $ 11,752 | $ 3 | $ 52,262 | $ (40,310) | $ (203) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (9,289) | $ (10,083) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 1,020 | 2,458 |
Net change in fair value of trading marketable securities | (641) | (207) |
Non-cash lease expense | 40 | 39 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 430 | (195) |
Accounts payable and accrued liabilities | 296 | (10) |
Accounts payable - related parties | (23) | 33 |
Fixed cash payments related to operating leases | (40) | (43) |
Net cash used in operating activities | (8,207) | (8,008) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in trading marketable securities | (13,685) | (12,725) |
Investment in available-for-sale securities | 0 | (499) |
Proceeds from disposition of marketable securities | 15,680 | 15,657 |
Proceeds from disposition of available-for-sale securities | 1,512 | 525 |
Net cash provided by investing activities | 3,507 | 2,958 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common shares for cash, net | 567 | 0 |
Net cash provided by (used in) financing activities | 567 | 0 |
Effect of exchange rate changes on cash | 60 | (224) |
Net change in cash and cash equivalents | (4,073) | (5,274) |
Cash and cash equivalents - beginning of period | 6,888 | 12,162 |
Cash and cash equivalents - end of period | 2,815 | 6,888 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Initial recognition of the right-of-use asset and lease liability | 0 | 20 |
Common shares issued as commitment fee | 0 | 97 |
Unrealized loss from available-for-sale securities | $ 0 | $ 24 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS ARTELO BIOSCIENCES, INC. (“we”, “us”, “our”, the “Company”) is a Nevada corporation incorporated on May 2, 2011, and based in San Diego County, California. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”), and the Company’s fiscal year end is December 31. The Company registered wholly owned subsidiaries in Ireland, Trinity Reliant Ventures Limited, on November 11, 2016, and in the UK, Trinity Research & Development Limited, on June 2, 2017. On January 8, 2020, Trinity Research and Development Limited changed its name to Artelo Biosciences Limited. The Company incorporated a wholly owned subsidiary in Canada, Artelo Biosciences Corporation, on March 18, 2020. Operations in the subsidiaries have been consolidated in the financial statements. The Company is a clinical stage biopharmaceutical company focused on developing and commercializing therapeutics that target lipid-signaling pathways, including treatments intended to modulate the endocannabinoid system (the “ECS”), a family of receptors and neurotransmitters that form a biochemical communication network throughout the body. Liquidity The Company has incurred losses since inception and incurred a net loss of $9,289 during the year ended December 31, 2023. However, in November 2021, the Company completed an equity offering which generated net proceeds of $18,262. Additionally, in May 2022, the Company entered into a purchase agreement and a registration rights agreement (the “Equity Line”) with an institutional investor, providing for the sale of up to $20,000 worth of the Company’s Common Stock, over the thirty-six (36) month term of the purchase agreement. Under the terms and subject to the conditions of the purchase agreement, the Company has the right, but not the obligation, to sell to the institutional investor, and the institutional investor is obligated to purchase, up to $20,000 worth of shares of the Company’s Common Stock. As of December 31, 2023, in accordance with the Equity Line, the Company issued 333,271 shares of the Company’s Common Stock with aggregate proceeds to the Company of $567. In July 2023, the Company filed a $75,000 in aggregate value shelf registration statement on Form S-3 which became effective on July 14, 2023. The shelf registration statement is effective for three years and permits the Company to sell, from time to time, up to $75,000 of the Company’s Common Stock, preferred stock, debt securities, warrants, and/or units subject to a limit of one-third (1/3) of the Company’s public float within a twelve (12) month period. The Company’s existing cash resources are expected to provide sufficient funds to carry out the Company’s planned operations into the second half of 2025. To continue operations beyond such time frame, the Company will be required to raise additional funds by completing additional equity or debt offerings or licensing our product candidates. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years. Negative Global or National Events Businesses have been and will continue to be impacted by a number of challenging global and national events and circumstances that continue to evolve, including pandemics, extreme weather conditions, increased economic uncertainty, inflation, rising interest rates, recent and any potential future financial institution failures, and conflicts in Eastern Europe, the Middle East and in other countries. The extent of the impact of these events and circumstances on our business, operations and development timelines and plans remains uncertain, and will depend on certain developments, including the duration and scope of the events and their impact on our development activities, third-party manufacturers, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel. We have been and continue to actively monitor the potential impacts that these various events and circumstances may have on our business, and we take steps, where warranted, to minimize any potential negative impacts on our business resulting from these events and circumstances. The ultimate impact of these global and national events and circumstances, either individually or in aggregate, is highly uncertain and subject to change. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with GAAP. All amounts in these financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. Basis of Consolidation The financial statements have been prepared on a consolidated basis, with the Company’s wholly owned subsidiaries, Trinity Reliant Ventures Limited, Artelo Biosciences Limited and Artelo Biosciences Corporation. All intercompany transactions and balances have been eliminated. Research and Development (“R&D”) R&D expenses consist primarily of costs related to clinical studies and outside services, personnel expenses, and other R&D expenses. Clinical studies and outside services costs relate primarily to services performed by clinical research organizations and related clinical or development manufacturing costs, materials, and supplies, filing fees, regulatory support, and other third-party fees. Personnel expenses relate primarily to salaries and benefits. R&D expenditures are charged to operations as incurred. The Company recognizes R&D tax credits received from the United Kingdom government for spending on R&D as an offset of R&D expenses. The Company received R&D tax credits of $1,206 and $1,041 during the years ended December 31, 2023 and 2022, respectively. Cash and Cash Equivalents Cash and cash equivalents include cash in banks, money market funds, commercial paper, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $2,815 and $6,888 in cash and cash equivalents at December 31, 2023 and December 31, 2022, respectively. Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $250 per institution. The amount in excess of the FDIC insurance as of December 31, 2023, was approximately $2,315 . The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. Marketable Securities Our investments in debt securities are carried at fair value. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading debt securities are charged to income and unrealized gains and losses on available-for-sale debt securities are included in other comprehensive income or loss. The marketable securities held by the Company, classified as trading marketable securities, had an outstanding balance of $7,611 and $9,150 as of December 31, 2023, and 2022, respectively. The Company’s holdings in US Treasury instruments, classified as available-for-sale securities had an outstanding balance of $0 and $1,495 as of December 31, 2023 and 2022, respectively. Intangible Assets The Company capitalizes certain costs related to the acquisition of intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life. The Company tests its intangible assets for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company’s segments; unanticipated competition; and slower growth rates. The Company determined that there was no impairment of its intangible assets at December 31, 2023 and December 31, 2022. Foreign Currency Transactions The Company has operations outside of the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk arises from the fluctuations in foreign exchange rates and the degrees of volatility in these rates. Currently the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included as other comprehensive income. Financial Instruments The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amounts shown of the Company’s financial instruments including cash and cash equivalents and accounts payable approximate fair value due to the short-term maturities of these instruments. Set out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis in the fair value hierarchy as of December 31, 2023 and 2022: December 31, 2023 Level 1 Level 2 Level 3 Total Marketable securities – trading securities Commercial paper $ - $ 4,654 $ - $ 4,654 Asset-backed securities - 974 - 974 Corporate debt - 1,482 - 1,482 US Government - 501 - 501 - 7,611 - 7,611 Available-for-sale securities - - - - $ - $ 7,611 $ - $ 7,611 December 31, 2022 Level 1 Level 2 Level 3 Total Marketable securities – trading securities Commercial paper $ - $ 9,150 $ - $ 9,150 - 9,150 - 9,150 Available-for sale securities US Treasury - 1,495 - 1,495 - 1,495 - 1,495 $ - $ 10,645 $ - $ 10,645 Concentrations of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management has assessed the financial strength and credit worthiness, and will continue to do so on an ongoing basis, of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited. Share-based Expenses ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Share-based expenses were $1,020 and $2,458 for the years ended December 31, 2023 and 2022, respectively. Deferred Income Taxes and Valuation Allowance The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Net Loss per Share of Common Stock Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of Common Stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method and as if converted method. Dilutive potential common shares include outstanding stock options and warrants. For the years ended December 31, 2023, and 2022, the following Common Stock equivalents were excluded from the computation of diluted net loss per share as the result was anti-dilutive. December 31, December 31, 2023 2022 Stock options 519,105 313,109 Warrants 242,633 270,053 761,738 583,162 New Accounting Standard Adopted On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. These amendments permit the use of an impairment model known as the current expected credit loss (CECL) model when assessing financial instruments for impairment. There was no impact on the Company’s financial statements as a result of the adoption of the standard. Recent Accounting Pronouncements In June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 3 – RELATED PARTY TRANSACTIONS During the years ended December 31, 2023 and 2022, a company owned by the Senior Vice President, European Operations, provided consulting services totaling $12 and $35, respectively. As of December 31, 2023 and 2022 there was $2 and $1, outstanding, respectively. During the years ended December 31, 2023 and 2022, a company significantly influenced by a director of a subsidiary of the Company provided professional services totaling $135 and $111, respectively. As of December 31, 2023 and 2022, there was $5 and $30 outstanding, respectively. During the years ended December 31, 2023 and 2022, a company controlled by a director of a subsidiary of the Company provided professional services totaling $77 and $79, respectively. As of December 31, 2023 and 2022, there was $23 and $23 outstanding, respectively. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY | |
EQUITY | NOTE 4 - EQUITY Preferred shares The Company has authorized 416,667 shares of preferred stock with a par value of $0.001 per share. As of December 31, 2023, there were no shares of preferred stock issued or outstanding. Common Shares The Company has authorized 50,000,000 shares of Common Stock with a par value of $0.001 per share. Each share of Common Stock entitles the holder to one vote, in person or proxy, on any matter on which an action of the stockholders of the Company is sought. During the year ended December 31, 2023, in accordance with the Equity Line, the Company issued 333,271 shares of the Company’s Common Stock with aggregate proceeds to the Company of $567. As of December 31, 2023, there were 3,188,959 shares of Common Stock issued and outstanding. Warrants A summary of activity of the warrants during the year ended December 31, 2023 and 2022, is follows: Weighted Number of Weighted Average Average shares Exercise Price Life (years) Outstanding, December 31, 2021 295,601 $ 69.45 2.83 Granted - - - Expired (25,548 ) (125.92 ) - Exercised - - - Outstanding, December 31, 2022 270,053 $ 64.16 2.05 Granted - - - Expired (27,420 ) 198.07 - Exercised - - - Outstanding, December 31, 2023 242,633 $ 44.07 1.10 The intrinsic value of the warrants as of December 31, 2023, is $0. All of the outstanding warrants are exercisable as of December 31, 2023. 2018 Equity Incentive Plan, as amended On January 1, 2023, the number of shares available under the Company’s 2018 Equity Incentive Plan, as amended (the “2018 Plan”) was increased by 428,353 shares of Common Stock. As of December 31, 2023, the 2018 Plan permits the Company to issue up to an aggregate of 1,050,879 shares of Common Stock of which 531,774 shares are available to be issued. Options granted during the year ended December 31, 2023 On January 1, 2023, the 2018 Plan was increased to permit the issuance of an additional 428,353 shares of common stock, which increased the number of shares available for issuance pursuant to the 2018 Plan to a new total of 737,770 shares. On February 1, 2023, the Company granted an option to the Company’s president to purchase a total of 85,000 shares of the Company’s common stock with an exercise price of $3.15 and vesting as follows: 25% of the shares subject to the option shall vest on the one-year anniversary of the vesting commencement date, and 1/48th of the shares subject to the option shall vest each month thereafter on the same day of the month as the vesting commencement date. The vesting commencement date is February 1, 2023. On February 2, 2023, the Company granted options to certain employees and consultants to purchase a total of 90,000 shares of the Company’s common stock with an exercise price of $3.15 and vesting as follows: twenty-five percent (25%) of the shares subject to the option shall vest on the one (1) year anniversary of the vesting commencement date, and one forty-eighth (1/48th) of the shares subject to the option shall vest each month thereafter on the same day of the month as the vesting commencement date. The vesting commencement date is February 1, 2023. On February 2, 2023, the Company granted an option to certain employees and consultants to purchase a total of 19,750 shares of the Company’s common stock with an exercise price of $3.15 and vesting as follows: one hundred percent (100%) of the shares subject to the option shall vest on the one (1) year anniversary of the vesting commencement date on the same day of the month as the vesting commencement date. The vesting commencement date is February 1, 2023. On February 2, 2023, the Company granted an option to an employee to purchase a total of 746 shares of the Company’s common stock with an exercise price of $3.15 and vesting as follows: 50% of the shares subject to the option shall vest on the one (1) year anniversary of the vesting commencement date, and one twenty-fourth (1/24th) of the shares subject to the option shall vest each month thereafter on the same day of the month as the vesting commencement date. The vesting commencement date is February 1, 2023. On June 30, 2023, the Company granted an option to certain directors of the Company to purchase a total of 4,002 shares of the Company’s common stock with an exercise price of $1.99, all of which shall vest on the one (1) year anniversary of the vesting commencement date The vesting commencement date is June 30, 2023. On August 4, 2023, the Company granted an option to certain directors of the Company to purchase a total of 6,498 shares of the Company’s common stock with an exercise price of $2.01, all of which shall vest on the one (1) year anniversary of the vesting commencement date The vesting commencement date is June 30, 2023. Options granted during the year ended December 31, 2022 On February 15, 2022, 17,177 shares of Common Stock were returned to the 2018 Plan and on February 18, 2022, the number of shares of Common Stock reserved for issuance under the 2018 Plan increased by 141,003 shares. Such additional shares were registered on a Registration Statement on Form S-8 filed with the Securities and Exchange Commission on April 7, 2022. On May 15, 2022, and July 20, 2022, an additional 6,077 and 1,584 shares, respectively, were returned to the 2018 Plan. In June 2022, the Company granted options to certain directors of the Company to purchase an aggregate of 4,002 shares of the Company’s Common Stock with an exercise price of $4.89 and vesting on the earlier of the one-year anniversary of the vesting commencement date or the date prior to the date of the Company’s annual meeting following the vesting commencement date. The vesting commencement date is June 24, 2022. The following is a summary of stock option activity during the years ended December 31, 2023 and 2022: Options Outstanding Weighted Average Number of Weighted Average Remaining life Options Exercise Price (years) Outstanding, December 31, 2021 333,945 $ 24.45 9.36 Granted 4,002 4.89 10.00 Exercised - - - Forfeited/canceled (24,838) (25.69) (8.74) Outstanding, December 31, 2022 313,109 $ 24.15 8.41 Granted 205,996 3.03 10.00 Exercised - - - Forfeited/canceled - - - Outstanding, December 31, 2023 519,105 $ 15.97 8.07 Exercisable options, December 31, 2023 232,873 $ 27.96 7.29 Valuation The Company utilizes the Black-Scholes model to value its stock options. The Company utilized the following assumptions: Year Ended Year Ended December 31, December 31, 2023 2022 Expected term 5.50 - 6.25 years 5.50 years Expected average volatility 110 - 150% 153 % Expected dividend yield - - Risk-free interest rate 3.43 - 4.15% 3.18 % During the years ended December 31, 2023 and 2022, the Company granted 205,996 and 4,002 options, respectively valued at $586 and $18, respectively, of which 150,246 and 4,002 options, respectively valued at $427 and $18, respectively were for related parties. During the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $1,020 and $2,458, respectively, of which $890 and $2,216 was for related parties, respectively, and as of December 31, 2023, $1,315 remains unamortized, of which $1,163 is for related parties. The intrinsic value of options outstanding as of December 31, 2023 and 2022, is $0. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 5 – INCOME TAXES The Company has not made provision for income taxes for the years ended December 31, 2023, and 2022 since the Company has the benefit of net operating losses in these periods. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize deferred income tax assets arising as a result of net operating losses carried forward, the Company has not recorded any deferred income tax assets as of December 31, 2023. The Company has incurred a net operating loss of $24,855, the net operating loss carry forwards will begin to expire in varying amounts beginning with the year ended December 31, 2034, subject to its eligibility as determined by respective tax regulating authorities. The Company’s net operating loss carry forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership change as defined in Section 382 of the Internal Revenue Code. U.S. Federal tax returns are closed by statute for years through 2015. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates. Net deferred tax assets consist of the following components as of: December 31, December 31, 2023 2022 NOL Carryover $ 5,135 $ 4,338 Valuation allowance (5,135 ) (4,338 ) Net deferred tax asset $ - $ - |
INTANGIBLE ASSET
INTANGIBLE ASSET | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSET | |
INTANGIBLE ASSET | NOTE 6 – INTANGIBLE ASSET The Company has capitalized the costs associated with acquiring the exclusive worldwide license to develop and commercialize products comprising or containing the compound ART27.13 as an intangible asset at a value of $2,039 as of December 31, 2023, and December 31, 2022. The amount capitalized consisted of a $1,500 payment and the fair value of 4,087 shares of Common Stock of $539. During the year ended December 31, 2023, no additional costs met the criteria for capitalization as an intangible asset. |
LEASE
LEASE | 12 Months Ended |
Dec. 31, 2023 | |
LEASE | |
LEASE | NOTE 7 - LEASE On May 12, 2021, the Company entered into a lease arrangement for office space with Beckman/Lomas LLC, an entity controlled by a close family member of a director. Effective June 1, 2022, the related party divested its interests in the property, and as such, the lease agreement no longer constitutes a related party transaction. On April 19, 2022, the Company entered into a lease arrangement for office space with an annual rent of $13 (£11) with the term of April 2022 through September 2023. The following summarizes right-of use asset and lease information about the Company’s operating lease as of December 31, 2023: Year ended December 31, 2023 2022 Lease cost Operating lease cost $ 40 $ 39 Other information Cash paid for operating cash flows from operating leases $ 40 $ 43 Right-of-use assets obtained in exchange for new operating lease liability $ - $ 20 Weighted-average remaining lease term — operating leases (year) 0.67 1.57 Weighted-average discount rate — operating leases 3.00 % 2.98 % Future minimum lease payments under the operating lease liability have non-cancellable lease payments at December 31, 2023, as follows: Total Year Ended December 31, 2024 $ 23 Thereafter - 23 Less: Imputed interest - Operating lease liabilities 23 Operating lease liability - current 23 Operating lease liability - non-current $ - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTENGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES The Company has certain financial commitments relating to research and development contracts as of December 31, 2023, as follows: · The Company is invoiced monthly and quarterly in connection with several research and development contracts. · The Company may be obligated to make additional payments related to research and development contracts entered into, dependent on the progress and milestones achieved through the programs. · The Company’s principal executive office is currently located at 505 Lomas Santa Fe Drive, Suite 160, Solana Beach, CA, US. Additionally, we have an office outside Manchester, UK, which serves as administrative spaces for managing our subsidiaries, Trinity Reliant Ventures, Ltd (Ireland) and Artelo Biosciences Limited (UK). We do not currently own any properties, laboratories, or manufacturing facilities. All leases for our office space, other than for the principal executive office, are month-to-month. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS On January 1, 2024, the number of shares of Common Stock reserved for issuance under the 2018 Plan increased by 478,344 shares to a new total of 1,529,223 shares reserved for issuances pursuant to the 2018 Plan. On January 5, 2024 (the “Vesting Commencement Date”), the Company granted options to the CEO of the Company to purchase an aggregate total of 92,000 shares of the Company’s common stock with an exercise price of $1.49. Twenty five percent (25%) of the shares subject to the option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and one forty-eighth (1/48th) of the shares subject to the option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date (and if there is no corresponding day, on the last day of the month), such that the option shall be fully vested on the four (4) year anniversary of the Vesting Commencement Date. On February 28, 2024 (the “Amendment Date”), the Compensation Committee of the Board (the “Compensation Committee”) amended 488,069 options to purchase shares of the Company’s common stock issued under the 2018 Plan pursuant to a previously approved offer made to such holders by the Company to amend such eligible options (such options, the “Eligible Options”). The Eligible Options were amended to (i) reduce the exercise price per share of the Company’s common stock (a “Share”) of each such Eligible Option to be equal to $1.55, the closing price per Share as of the Amendment Date, and (ii) apply a new vesting schedule for each such Eligible Option such that (A) none of the Shares subject to each such Eligible Option will be vested as of the Amendment Date and (B) 1/3rd of the Shares underlying each Eligible Option will vest on the first anniversary of the Amendment Date, and 1/36th of the Shares underlying each Eligible Option will vest each month thereafter on the same day of the month as the Amendment Date (or, if there is no such day, the last day of the month), subject to the applicable holder remaining a Service Provider (as defined in the 2018 Plan) through each vesting date (such amendment, the “Repricing and Revesting Amendment”). No other terms of the options were modified. All options to purchase shares of common stock of the Company held by the eligible participants with an exercise price per Share that was greater than or equal to $1.99 was amended pursuant to the Repricing and Revesting Amendment. On March 5, 2024, (the “Vesting Commencement Date”), the Company granted options to certain employees and consultants of the Company to purchase an aggregate total of 152,000 shares of the Company’s common stock with an exercise price of $1.47. Twenty five percent (25%) of the shares subject to the option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and one forty-eighth (1/48th) of the shares subject to the option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date (and if there is no corresponding day, on the last day of the month), such that the option shall be fully vested on the four (4) year anniversary of the Vesting Commencement Date. Subsequent to December 31, 2023, in accordance with the Equity Line, the Company issued 38,741 shares of the Company’s Common Stock with aggregate proceeds to the Company of $55. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with GAAP. All amounts in these financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. |
Basis of Consolidation | The financial statements have been prepared on a consolidated basis, with the Company’s wholly owned subsidiaries, Trinity Reliant Ventures Limited, Artelo Biosciences Limited and Artelo Biosciences Corporation. All intercompany transactions and balances have been eliminated. |
Research and Development ("R&D") | R&D expenses consist primarily of costs related to clinical studies and outside services, personnel expenses, and other R&D expenses. Clinical studies and outside services costs relate primarily to services performed by clinical research organizations and related clinical or development manufacturing costs, materials, and supplies, filing fees, regulatory support, and other third-party fees. Personnel expenses relate primarily to salaries and benefits. R&D expenditures are charged to operations as incurred. The Company recognizes R&D tax credits received from the United Kingdom government for spending on R&D as an offset of R&D expenses. The Company received R&D tax credits of $1,206 and $1,041 during the years ended December 31, 2023 and 2022, respectively. |
Cash and Cash Equivalents | Cash and cash equivalents include cash in banks, money market funds, commercial paper, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $2,815 and $6,888 in cash and cash equivalents at December 31, 2023 and December 31, 2022, respectively. Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $250 per institution. The amount in excess of the FDIC insurance as of December 31, 2023, was approximately $2,315 . The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. |
Marketable Securities | Our investments in debt securities are carried at fair value. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading debt securities are charged to income and unrealized gains and losses on available-for-sale debt securities are included in other comprehensive income or loss. The marketable securities held by the Company, classified as trading marketable securities, had an outstanding balance of $7,611 and $9,150 as of December 31, 2023, and 2022, respectively. The Company’s holdings in US Treasury instruments, classified as available-for-sale securities had an outstanding balance of $0 and $1,495 as of December 31, 2023 and 2022, respectively. |
Intangible Assets | The Company capitalizes certain costs related to the acquisition of intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life. The Company tests its intangible assets for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company’s segments; unanticipated competition; and slower growth rates. The Company determined that there was no impairment of its intangible assets at December 31, 2023 and December 31, 2022. |
Foreign Currency Transactions | The Company has operations outside of the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk arises from the fluctuations in foreign exchange rates and the degrees of volatility in these rates. Currently the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included as other comprehensive income. |
Financial Instruments | The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amounts shown of the Company’s financial instruments including cash and cash equivalents and accounts payable approximate fair value due to the short-term maturities of these instruments. Set out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis in the fair value hierarchy as of December 31, 2023 and 2022: December 31, 2023 Level 1 Level 2 Level 3 Total Marketable securities – trading securities Commercial paper $ - $ 4,654 $ - $ 4,654 Asset-backed securities - 974 - 974 Corporate debt - 1,482 - 1,482 US Government - 501 - 501 - 7,611 - 7,611 Available-for-sale securities - - - - $ - $ 7,611 $ - $ 7,611 December 31, 2022 Level 1 Level 2 Level 3 Total Marketable securities – trading securities Commercial paper $ - $ 9,150 $ - $ 9,150 - 9,150 - 9,150 Available-for sale securities US Treasury - 1,495 - 1,495 - 1,495 - 1,495 $ - $ 10,645 $ - $ 10,645 |
Concentrations of Credit Risk | The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management has assessed the financial strength and credit worthiness, and will continue to do so on an ongoing basis, of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited. |
Share-based Expenses | ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Share-based expenses were $1,020 and $2,458 for the years ended December 31, 2023 and 2022, respectively. |
Deferred Income Taxes and Valuation Allowance | The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. |
Net Loss per Share of Common Stock | Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of Common Stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method and as if converted method. Dilutive potential common shares include outstanding stock options and warrants. For the years ended December 31, 2023, and 2022, the following Common Stock equivalents were excluded from the computation of diluted net loss per share as the result was anti-dilutive. December 31, December 31, 2023 2022 Stock options 519,105 313,109 Warrants 242,633 270,053 761,738 583,162 |
New Accounting Standard Adopted | On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. These amendments permit the use of an impairment model known as the current expected credit loss (CECL) model when assessing financial instruments for impairment. There was no impact on the Company’s financial statements as a result of the adoption of the standard. |
Recent Accounting Pronouncements | In June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of financial instruments remeasured at fair value on recurring basis | December 31, 2023 Level 1 Level 2 Level 3 Total Marketable securities – trading securities Commercial paper $ - $ 4,654 $ - $ 4,654 Asset-backed securities - 974 - 974 Corporate debt - 1,482 - 1,482 US Government - 501 - 501 - 7,611 - 7,611 Available-for-sale securities - - - - $ - $ 7,611 $ - $ 7,611 December 31, 2022 Level 1 Level 2 Level 3 Total Marketable securities – trading securities Commercial paper $ - $ 9,150 $ - $ 9,150 - 9,150 - 9,150 Available-for sale securities US Treasury - 1,495 - 1,495 - 1,495 - 1,495 $ - $ 10,645 $ - $ 10,645 |
Schedule of anti-dilutive securities excluded from the compuutation of EPS | December 31, December 31, 2023 2022 Stock options 519,105 313,109 Warrants 242,633 270,053 761,738 583,162 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY | |
Schedule of activity of warrants outstanding | Weighted Number of Weighted Average Average shares Exercise Price Life (years) Outstanding, December 31, 2021 295,601 $ 69.45 2.83 Granted - - - Expired (25,548 ) (125.92 ) - Exercised - - - Outstanding, December 31, 2022 270,053 $ 64.16 2.05 Granted - - - Expired (27,420 ) 198.07 - Exercised - - - Outstanding, December 31, 2023 242,633 $ 44.07 1.10 |
Schedule of fair value assumptions used to value stock options | Year Ended Year Ended December 31, December 31, 2023 2022 Expected term 5.50 - 6.25 years 5.50 years Expected average volatility 110 - 150% 153 % Expected dividend yield - - Risk-free interest rate 3.43 - 4.15% 3.18 % |
Schedule of stock option activity | Options Outstanding Weighted Average Number of Weighted Average Remaining life Options Exercise Price (years) Outstanding, December 31, 2021 333,945 $ 24.45 9.36 Granted 4,002 4.89 10.00 Exercised - - - Forfeited/canceled (24,838) (25.69) (8.74) Outstanding, December 31, 2022 313,109 $ 24.15 8.41 Granted 205,996 3.03 10.00 Exercised - - - Forfeited/canceled - - - Outstanding, December 31, 2023 519,105 $ 15.97 8.07 Exercisable options, December 31, 2023 232,873 $ 27.96 7.29 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of net deferred tax assets | December 31, December 31, 2023 2022 NOL Carryover $ 5,135 $ 4,338 Valuation allowance (5,135 ) (4,338 ) Net deferred tax asset $ - $ - |
LEASE (Tables)
LEASE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASE | |
Schedule of right-of use asset and lease information | Year ended December 31, 2023 2022 Lease cost Operating lease cost $ 40 $ 39 Other information Cash paid for operating cash flows from operating leases $ 40 $ 43 Right-of-use assets obtained in exchange for new operating lease liability $ - $ 20 Weighted-average remaining lease term — operating leases (year) 0.67 1.57 Weighted-average discount rate — operating leases 3.00 % 2.98 % |
Schedule of future minimum lease payments | Total Year Ended December 31, 2024 $ 23 Thereafter - 23 Less: Imputed interest - Operating lease liabilities 23 Operating lease liability - current 23 Operating lease liability - non-current $ - |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Detail Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
May 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |||
Net loss | $ (9,289) | $ (10,083) | |
Sale of common stock | $ 20,000 | 20,000 | |
Net Proceeds From Issuance of Initial Public Offering | 18,262 | ||
Sale of stock | 75,000 | ||
Aggregate value | $ 75,000 | ||
Issued shares of Common Stock, share | 333,271 | ||
Issued shares of Common Stock, Value | $ 567 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | $ 7,611,000 | $ 10,645,000 |
Marketable securities | 7,611,000 | 9,150,000 |
Available-for sale securities | 0 | 1,495,000 |
US Government [Member] | ||
Marketable securities | 501,000 | |
US Treasuary [Member] | ||
Available-for sale securities | 1,495,000 | |
Common Stock [Common stock] | ||
Marketable securities | 0 | 0 |
Available-for sale securities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets | 7,611,000 | 10,645,000 |
Marketable securities | 7,611,000 | 9,150,000 |
Available-for sale securities | 0 | 1,495,000 |
Fair Value, Inputs, Level 2 [Member] | US Government [Member] | ||
Marketable securities | 501,000 | |
Fair Value, Inputs, Level 2 [Member] | US Treasuary [Member] | ||
Available-for sale securities | 1,495,000 | |
Fair Value, Inputs, Level 3 [Member] | ||
Assets | 0 | 0 |
Marketable securities | 0 | 0 |
Available-for sale securities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | US Government [Member] | ||
Marketable securities | 0 | |
Fair Value, Inputs, Level 3 [Member] | US Treasuary [Member] | ||
Available-for sale securities | 0 | |
Fair Value, Inputs, Level 1 [Member] | US Government [Member] | ||
Marketable securities | 0 | |
Fair Value, Inputs, Level 1 [Member] | US Treasuary [Member] | ||
Available-for sale securities | 0 | |
Commercial Paper [Member] | ||
Marketable securities | 4,654,000 | 9,150,000 |
Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Marketable securities | 4,654,000 | 9,150,000 |
Commercial Paper [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Marketable securities | 0 | 0 |
Commercial Paper [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Marketable securities | 0 | $ 0 |
Asset-backed securitie [Member] | ||
Marketable securities | 974,000 | |
Asset-backed securitie [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Marketable securities | 0 | |
Asset Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Marketable securities | 974,000 | |
Asset-backed securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Marketable securities | 0 | |
Corporate debt [Member] | ||
Marketable securities | 1,482,000 | |
Corporate debt [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Marketable securities | 1,482,000 | |
Corporate debt [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Marketable securities | 0 | |
Corporate debt [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Marketable securities | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Dilutive instruments | 761,738 | 583,162 |
Warrant [Member] | ||
Dilutive instruments | 242,633 | 270,053 |
Stock Option [Member] | ||
Dilutive instruments | 519,105 | 313,109 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Federally insured limit amount | $ 250,000 | ||
Amount in excess of FDIC insurance amount | 2,315,000 | ||
Cash and cash equivalents | 2,815,000 | $ 6,888,000 | $ 12,162,000 |
Share-based expenses | 1,020,000 | 2,458,000 | |
Marketable securities outstanding balance | 7,611,000 | 9,150,000 | |
Research and developments tax credits | 1,206,000 | 1,041,000 | |
Available-for-sale securities outstanding balance | $ 0 | $ 1,495,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Detail Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Influenced by a director [Member] | ||
Outstanding Balance | $ 5 | $ 30 |
Professional Services | 135 | 111 |
Controlled by a director [Member] | ||
Outstanding Balance | 23 | 23 |
Professional Services | 77 | 79 |
Senior Vice President [Member] | ||
Outstanding services | 12 | 35 |
Consulting Services | $ 2 | $ 1 |
EQUITY (Details)
EQUITY (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number Of Shares Outstanding, Beginning | 270,053 | 295,601 |
Number Of Shares Outstanding, Expired | (27,420) | (25,548) |
Number Of Shares Outstanding, Ending | 242,633 | 270,053 |
Weighted Average Exercie Price, Beginning | $ 64.16 | $ 69.45 |
Weighted Average Exercise Price, Granted | 0 | 0 |
Weighted Average Exercise Price Expired | 198.07 | (125.92) |
Weighted Average Exercise Price Exercised | 0 | 0 |
Weighted Average Exercie Price, Ending | $ 44.07 | $ 64.16 |
Weighted Average Life (years), Beginning | 2 years 18 days | 2 years 9 months 29 days |
Weighted Average Life (years), Ending | 1 year 1 month 6 days | 2 years 18 days |
EQUITY (Details 1)
EQUITY (Details 1) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number Of Shares Outstanding, Beginning | 313,109 | 333,945 |
Number Of Shares Outstanding, Granted | 205,996 | 4,002 |
Number Of Shares Outstanding, Forfeited/canceled | (24,838) | |
Number Of Shares Outstanding, Ending | 519,105 | 313,109 |
Number of Shares, Exercisable | 232,873 | |
Weighted Average Exercie Price, Beginning | $ 24.15 | $ 24.45 |
Weighted Average Exercise Price, Granted | 3.03 | 4.89 |
Weighted Average Exercise Price, Forfeited/canceled | (25.69) | |
Weighted Average Exercie Price, Ending | 15.97 | $ 24.15 |
Weighted Average Exercie Price, Exercisable | $ 27.96 | |
Weighted Average Life (years), Beginning | 8 years 4 months 28 days | 9 years 4 months 9 days |
Weighted Average Life (years), Granted | 10 years | 10 years |
Weighted Average Life (years), Forfeited/canceled | 8 years 8 months 26 days | |
Weighted Average Life (years), Ending | 8 years 25 days | 8 years 4 months 28 days |
Weighted Average Life (years), Excercisable | 7 years 3 months 14 days |
EQUITY (Details 2)
EQUITY (Details 2) - Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Expected term | 5 years 6 months | |
Expected average volatility | 153% | |
Risk-free interest rate | 3.18% | |
Minimum [Member] | ||
Expected term | 5 years 6 months | |
Expected average volatility | 110% | |
Risk-free interest rate | 3.43% | |
Maximum [Member] | ||
Expected term | 6 years 3 months | |
Expected average volatility | 150% | |
Risk-free interest rate | 4.15% |
EQUITY (Detail Narrative)
EQUITY (Detail Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 04, 2023 | Feb. 02, 2023 | Feb. 01, 2023 | Jan. 06, 2023 | Feb. 15, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2023 | Feb. 18, 2022 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares authorized | 416,667 | 416,667 | |||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||
Issued shares of Common Stock, share | 333,271 | ||||||||||
Issued shares of Common Stock, Value | $ 567,000 | ||||||||||
Preferred stock, shares issued | 0 | 0 | |||||||||
Intrinsic value of the warrants | $ 0 | ||||||||||
Common stock, shares issued | 3,188,959 | 2,855,688 | |||||||||
Common stock, shares outstanding | 3,188,959 | 2,855,688 | |||||||||
2018 Equity Incentive Plan [Member] | |||||||||||
Issuance additional shares of common stock | 428,353 | ||||||||||
Common stock reserved for future issuance | 428,353 | ||||||||||
Common stock, shares issuable | 1,050,879 | ||||||||||
Common stock, shares available to be issued | 737,770 | 531,774 | |||||||||
2018 Equity Incentive Plan [Member] | Febuary 2, 2023 | |||||||||||
Exercise price | $ 3.15 | ||||||||||
Granted options to purchase common stock | 90,000 | ||||||||||
Vesting Percentage | 25% | ||||||||||
2018 Equity Incentive Plan [Member] | February 1, 2023 [Member] | |||||||||||
Exercise price | $ 3.15 | ||||||||||
Granted options to purchase common stock | 85,000 | ||||||||||
Vesting Percentage | 25% | ||||||||||
Represents as a equity incentive plan. | Febuary 2, 2023 | |||||||||||
Exercise price | $ 3.15 | ||||||||||
Granted options to purchase common stock | 19,750 | ||||||||||
Vesting Percentage | 100% | ||||||||||
Options granted in fiscal year 2023 [Member] | |||||||||||
Options granted to purchase shares of common stock | 6,498 | 4,002 | |||||||||
Exercise price | $ 2.01 | $ 1.99 | |||||||||
2018 Equity Incentive Plan One | Febuary 2, 2023 | |||||||||||
Exercise price | $ 3.15 | ||||||||||
Granted options to purchase common stock | 746 | ||||||||||
Vesting Percentage | 50% | ||||||||||
Options granted in fiscal year 2022 [Member] | |||||||||||
Options granted to purchase shares of common stock | 4,002 | ||||||||||
Exercise price | $ 4.89 | ||||||||||
Common stock, shares available to be issued | 6,077 | ||||||||||
Shares returned to option pool | 17,177 | ||||||||||
Common stock reserved for future issuance | 141,003 | ||||||||||
Common stock, shares returned | 1,584 | ||||||||||
Valuation [Member] | |||||||||||
Options Granted | 205,996 | 4,002 | |||||||||
Option Granted, Value | $ 586,000 | $ 18,000 | |||||||||
Stock option expense | 1,020,000 | 2,458,000 | |||||||||
Stock option expense, Related parties | 890,000 | $ 2,216,000 | |||||||||
Stock option expense, Unamortized | 1,315,000 | ||||||||||
Stock option expense, Unamortized, Related parties | 1,163,000 | ||||||||||
Options Outstanding, intrinsic value | $ 0 | ||||||||||
Valuation [Member] | Related Parties [Member] | |||||||||||
Options Granted | 150,246 | 4,002 | |||||||||
Option Granted, Value | $ 427,000 | $ 18,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
INCOME TAXES | ||
NOL Carryover | $ 5,135,000 | $ 4,338,000 |
Valuation allowance | (5,135,000) | (4,338,000) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Detail Narrative)
INCOME TAXES (Detail Narrative) $ in Thousands | Dec. 31, 2023 USD ($) |
INCOME TAXES | |
Net operating losses carry forward | $ 24,855 |
INTANGIBLE ASSET (Detail Narrat
INTANGIBLE ASSET (Detail Narrative) - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible asset | $ 2,039,000 | $ 2,039,000 |
Represents information of Worldwide License Neo 1940. | ||
Payments to acquire intangible assets | $ 1,500,000 | |
Number of common stock payable recorded | 4,087 | |
Amount of stock options exercise to develop product | $ 539,000 |
LEASE (Details)
LEASE (Details) - Right-of use asset [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted-average remaining lease term - operating lease (year) | 8 months 1 day | 1 year 6 months 25 days |
Operating lease costs | $ 40,000 | $ 39,000 |
Cash paid for operating cash flows from operating leases | 40,000 | 43,000 |
Right-of-use assets obtained in exchange for new operating lease liability | $ 0 | $ 20,000 |
Weighted-average discount rate - operating lease | 3% | 2.98% |
LEASE (Details 1)
LEASE (Details 1) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Operating lease liability - current | $ 23,000 | $ 40,000 |
Operating lease liability - non-current | 0 | $ 23,000 |
Operating Lease Liability [Member] | ||
2024 | 23,000 | |
Thereafter | 0 | |
Total | 23,000 | |
Less: Imputed interest | 0 | |
Operating lease liabilities | 23,000 | |
Operating lease liability - current | 23,000 | |
Operating lease liability - non-current | $ 0 |
LEASE (Details Narrative)
LEASE (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 | |
LEASE | |
Lease agreement description | On April 19, 2022, the Company entered into a lease arrangement for office space with an annual rent of $13 (£11) with the term of April 2022 through September 2023 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 05, 2024 | Jan. 02, 2024 | Feb. 28, 2024 | Dec. 31, 2023 | |
Stock issued | $ 38,741 | |||
Proceeds from stock issued | $ 55 | |||
Subsequent Event [Member] | ||||
Exercise price | $ 1.49 | $ 1.99 | ||
Granted options to purchase common stock | 92,000 | |||
Vesting Percentage | 25% | |||
Subsequent Event [Member] | 2018 Equity Incentive Plan | ||||
Exercise price | $ 1.55 | |||
Granted options to purchase common stock | 1,529,223 | |||
Granted option to purchase common stock | 478,344 |