Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 22, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-37526 | ||
Entity Registrant Name | Zynerba Pharmaceuticals, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-0389433 | ||
Entity Address, Address Line One | 80 W. Lancaster Avenue | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Devon | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19333 | ||
City Area Code | 484 | ||
Local Phone Number | 581-7505 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | ZYNE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 47.7 | ||
Entity Common Stock, Shares Outstanding | 53,352,487 | ||
Entity Central Index Key | 0001621443 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | Philadelphia, Pennsylvania |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 50,640,993 | $ 67,808,000 |
Incentive and tax receivables | 1,225,383 | 9,580,468 |
Prepaid expenses and other current assets | 2,908,731 | 2,831,392 |
Total current assets | 54,775,107 | 80,219,860 |
Property and equipment, net | 409,572 | 385,833 |
Right-of-use assets | 336,215 | 565,814 |
Total assets | 55,520,894 | 81,171,507 |
Current liabilities: | ||
Accounts payable | 1,942,830 | 1,798,813 |
Accrued expenses | 7,014,882 | 7,896,598 |
Lease liabilities | 214,901 | 209,068 |
Total current liabilities | 9,172,613 | 9,904,479 |
Lease liabilities, long-term | 119,524 | 353,694 |
Total liabilities | 9,292,137 | 10,258,173 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 200,000,000 shares authorized; 47,895,687 shares issued and outstanding at December 31, 2022 and 41,217,537 shares issued and outstanding at December 31, 2021 | 47,896 | 41,218 |
Additional paid-in capital | 320,698,146 | 310,353,595 |
Accumulated deficit | (274,517,285) | (239,481,479) |
Total stockholders' equity | 46,228,757 | 70,913,334 |
Total liabilities and stockholders' equity | $ 55,520,894 | $ 81,171,507 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 47,895,687 | 41,217,537 |
Common stock, shares outstanding | 47,895,687 | 41,217,537 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | |||
Research and development | $ 21,099,666 | $ 21,424,489 | $ 35,654,994 |
General and administrative | 14,151,874 | 15,345,901 | 16,407,548 |
Total operating expenses | 35,251,540 | 36,770,390 | 52,062,542 |
Loss from operations | (35,251,540) | (36,770,390) | (52,062,542) |
Other income (expense): | |||
Interest income | 846,860 | 21,047 | 243,992 |
Foreign exchange (loss) gain | (631,126) | (559,681) | 481,719 |
Total other income (expense) | 215,734 | (538,634) | 725,711 |
Net loss | $ (35,035,806) | $ (37,309,024) | $ (51,336,831) |
Net loss per share basic | $ (0.82) | $ (0.95) | $ (1.90) |
Net loss per share diluted | $ (0.82) | $ (0.95) | $ (1.90) |
Basic weighted average shares outstanding | 42,662,770 | 39,259,495 | 27,022,931 |
Diluted weighted average shares outstanding | 42,662,770 | 39,259,495 | 27,022,931 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) | Common stock | Additional paid-capital | Accumulated deficit | Total |
Balance at Dec. 31, 2019 | $ 23,211 | $ 226,409,156 | $ (150,835,624) | $ 75,596,743 |
Balance (in shares) at Dec. 31, 2019 | 23,211,391 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 6,597 | 30,699,492 | 30,706,089 | |
Issuance of common stock, net of issuance costs (in shares) | 6,596,873 | |||
Issuance of restricted stock | $ 167 | (167) | ||
Issuance of restricted stock (in shares) | 167,000 | |||
Stock-based compensation expense | 5,177,527 | 5,177,527 | ||
Net loss | (51,336,831) | (51,336,831) | ||
Balance at Dec. 31, 2020 | $ 29,975 | 262,286,008 | (202,172,455) | 60,143,528 |
Balance (in shares) at Dec. 31, 2020 | 29,975,264 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 10,245 | 42,210,099 | 42,220,344 | |
Issuance of common stock, net of issuance costs (in shares) | 10,244,326 | |||
Issuance of restricted stock | $ 985 | (985) | ||
Issuance of restricted stock (in shares) | 984,822 | |||
Exercise of stock options | $ 13 | 47,893 | 47,906 | |
Exercise of stock options (in shares) | 13,125 | |||
Stock-based compensation expense | 5,810,580 | 5,810,580 | ||
Net loss | (37,309,024) | (37,309,024) | ||
Balance at Dec. 31, 2021 | $ 41,218 | 310,353,595 | (239,481,479) | 70,913,334 |
Balance (in shares) at Dec. 31, 2021 | 41,217,537 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 4,958 | 6,014,544 | 6,019,502 | |
Issuance of common stock, net of issuance costs (in shares) | 4,958,274 | |||
Commitment shares issued under an equity purchase agreement | $ 347 | (347) | ||
Commitment shares issued under an equity purchase agreement (in shares) | 347,222 | |||
Issuance of restricted stock | $ 1,373 | (1,373) | ||
Issuance of restricted stock (in shares) | 1,372,654 | |||
Stock-based compensation expense | 4,331,727 | 4,331,727 | ||
Net loss | (35,035,806) | (35,035,806) | ||
Balance at Dec. 31, 2022 | $ 47,896 | $ 320,698,146 | $ (274,517,285) | $ 46,228,757 |
Balance (in shares) at Dec. 31, 2022 | 47,895,687 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (35,035,806) | $ (37,309,024) | $ (51,336,831) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 219,283 | 247,140 | 207,035 |
Stock-based compensation | 4,331,727 | 5,810,580 | 5,177,527 |
Changes in operating assets and liabilities: | |||
Incentive and tax receivables | 8,355,084 | (537,882) | 5,571,383 |
Prepaid expenses and other assets | (58,998) | 2,472,624 | (2,981,094) |
Right-of-use assets and liabilities | 1,263 | (7,542) | (3,027) |
Accounts payable | 70,568 | (723,903) | (2,145,165) |
Accrued expenses | (910,071) | (3,409,469) | 4,196,132 |
Net cash used in operating activities | (23,026,950) | (33,457,476) | (41,314,040) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (154,105) | (47,570) | (445,314) |
Net cash used in investing activities | (154,105) | (47,570) | (445,314) |
Cash flows from financing activities: | |||
Proceeds from the issuance of common stock | 6,557,290 | 43,193,660 | 31,707,228 |
Payment of financing fees and expenses | (543,242) | (1,085,707) | (853,929) |
Proceeds from the exercise of stock options | 47,906 | ||
Net cash provided by financing activities | 6,014,048 | 42,155,859 | 30,853,299 |
Net (decrease) increase in cash and cash equivalents | (17,167,007) | 8,650,813 | (10,906,055) |
Cash and cash equivalents at beginning of year | 67,808,000 | 59,157,187 | 70,063,242 |
Cash and cash equivalents at end of year | 50,640,993 | 67,808,000 | 59,157,187 |
Supplemental disclosures of cash flow information: | |||
Financing costs included in accounts payable and accrued expenses at end of year | 55,387 | $ 42,500 | $ 17,275 |
Property and equipment acquired but unpaid at end of year | $ 88,917 |
Nature of Business and Liquidit
Nature of Business and Liquidity | 12 Months Ended |
Dec. 31, 2022 | |
Nature of Business and Liquidity | |
Nature of Business and Liquidity | (1) Nature of Business and Liquidity Zynerba Pharmaceuticals, Inc., together with its subsidiary, Zynerba Pharmaceuticals Pty Ltd (collectively, “Zynerba,” the “Company,” or “we”), is a clinical stage specialty pharmaceutical company focused on the development of pharmaceutically-produced transdermal cannabinoid therapies for orphan neuropsychiatric disorders, including Fragile X syndrome (“FXS”) and chromosome 22q11.2 deletion syndrome (“22q”). We have been granted orphan drug designations from the United States Food and Drug Administration (“FDA”) and the European Commission for the use of cannabidiol for the treatment of FXS and 22q. In addition, we have received Fast Track designation from the FDA for treatment of behavioral symptoms associated with FXS. The Company has decided to prioritize its resources on FXS and 22q, both of which have no approved products. While we believe the data from the Company’s autism spectrum disorder (“ASD”) clinical development program to date are compelling, given the difficult financial market, the Company has decided to defer the start of the Phase 3 development program in ASD. The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $274.5 million as of December 31, 2022. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenue from its product candidates currently in development. The Company's primary source of liquidity has been the issuance of equity securities. Management believes that the Company’s cash and cash equivalents as of December 31, 2022 are sufficient to fund operations and capital requirements to mid-year 2024. Substantial additional financings will be needed by the Company to fund its operations, and to complete clinical development of and to commercially develop its product candidates. The Company’s ability to raise sufficient additional financing depends on many factors beyond its control, including the current and ongoing volatility in the capital markets as a result of the COVID-19 pandemic. There is no assurance that such financing will be available when needed or on acceptable terms. The Company is subject to those risks associated with any clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company's research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies a. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to Form 10-K and Article 10 of Regulation S-X. b. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial c. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts payable and accrued expenses approximate fair value given their short-term nature. d. Cash and Cash Equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. As of December 31, 2022 and 2021, the Company invested a portion of its cash balances in money market funds that seek to maintain a stable net asset value. These investments have been included as cash equivalents on the consolidated balance sheets. e. Incentive and Tax Receivables The Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd (the “Subsidiary”), is incorporated in Australia. The Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, the Subsidiary is eligible to receive a cash refund from the Australian Taxation Office (“ATO”), for a percentage of the research and development costs expended by the Subsidiary in Australia. The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million (Australian) during the reimbursable period. The Company estimates the amount of cash refund it expects to receive related to the Australian research and development tax incentive program and records the incentives when it is probable 1) the Company will comply with relevant conditions of the program and 2) the incentive will be received. The Company evaluates its eligibility under tax incentive programs as of each balance sheet date based on the most current and relevant data available. If the Company is deemed to be ineligible or unable to receive the Australian research and development tax credit, or the Australian government significantly reduces or eliminates the tax credit, the actual cash refund the Company receives may materially differ from its estimates. In December 2018, the Company submitted an Advance Overseas Finding (“AOF”) application to a division of the Australian Government’s Department of Industry, Innovation and Science (“AusIndustry”), for a portion of the Company’s research and development activities incurred outside of Australia, which was approved by AusIndustry in July 2019. During the year ended December 31, 2019, the Company recorded $8.3 million as an incentive and tax receivable and recorded a corresponding credit During the three months ended March 31, 2022, the Company concluded its conversations with the ATO on these matters and made the decision to no longer pursue the AOF claim, resulting in the write off of both the AOF receivable and the corresponding reserve during the period. During the three months ended March 31, 2022, the Company received a payment of $8.0 million from the ATO for the non-AOF research and development incentive for the years ended December 31, 2018, 2019 and 2020. In addition, the Subsidiary incurs Goods and Services Tax (“GST”) on services provided by Australian vendors. As an Australian entity, the Subsidiary is entitled to a refund of the GST paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST incurred is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of December 31, 2022, incentive and tax receivables included $0.2 million for refundable GST on expenses incurred with Australian vendors during the three months ended December 31, 2022. Current incentive and tax receivables consisted of the following as of December 31, 2022 and 2021: December 31, December 31, 2022 2021 Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 $ — $ 3,144,152 Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 — 2,914,931 Research and development incentive (non-AOF) for the period 1/1/20 - 12/31/20 — 1,993,038 Research and development incentive (non-AOF) for the period 1/1/21 - 12/31/21 — 1,226,688 Research and development incentive (non-AOF) for the period 1/1/22 - 12/31/22 977,714 — Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 — 8,566,843 Goods and services tax 247,669 301,659 Total incentive and tax receivables before reserve for AOF 1,225,383 18,147,311 Reserve for research and development incentive (AOF) for the period 1/1/18 - 12/31/19 — (8,566,843) Total incentive and tax receivables - current assets $ 1,225,383 $ 9,580,468 f. Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized over the estimated useful life of the assets or the remaining lease term at the time the asset is placed into service, whichever is shorter. Repairs and maintenance costs are expensed as incurred. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in other expenses. g. Impairment of Long-Lived Assets The Company assesses the recoverability of its long-lived assets, which include property and equipment, whenever significant events or changes in circumstances indicate an impairment may have occurred. If indicators of an impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the years ended December 31, 2022, 2021 and 2020, the Company determined that there was no impairment of its long-lived assets. h. Research and Development Research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants and employee-related expenses including salaries and benefits. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. Research and development expenses are recorded net of expected refunds of eligible research and development costs paid pursuant to the Australian research and development tax incentive program and GST incurred on services provided by Australian vendors. The following table summarizes research and development expenses for the years ended December 31, 2022, 2021, and 2020: Year ended December 31, 2022 2021 2020 Research and development expenses - before R&D incentive $ 22,101,576 $ 22,454,878 $ 29,437,551 Research and development incentive (non-AOF) (1,001,910) (1,030,389) (1,890,252) Research and development expenses (before impact of AOF) 21,099,666 21,424,489 27,547,299 Amounts reserved against AOF refund — — 8,107,695 Total research and development expenses $ 21,099,666 $ 21,424,489 $ 35,654,994 i. Stock-Based Compensation The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the requisite service period of the award. Stock-based compensation expense for performance-based grants are recorded when management estimates that the vesting of these shares is probable based on the status of the Company’s research and development programs and other relevant factors, which were established by the Company’s board of directors. For grants of restricted stock the Company uses the closing price of the Company’s common stock on the date of grant. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock option awards. Estimating the fair value of stock option awards requires management to apply judgment and make estimates, including the expected volatility of the Company’s common stock, the expected term of the Company’s stock options and the expected dividend yield. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected term of stock options was estimated using the “simplified method,” as the Company has limited historical information to develop reasonable expectations about future exercise patterns and post vesting employment termination behavior for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For expected stock price volatility, the Company has historically used comparable public companies, in addition to the Company’s historical volatility, as a basis for its expected volatility to calculate the fair value of option grants. For option grants issued beginning in 2022, the Company used its own stock price volatility, over the expected term of the award, as the basis for its expected volatility. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected term of the option. j. Income Taxes The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the consolidated financial statements in the period of enactment. The carrying amount of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2022 and 2021, the Company has concluded that a full valuation allowance is necessary for its net deferred tax assets. The Company has no liability for unrecognized tax benefits or tax-related penalties or interest at December 31, 2022 and does not expect a significant change in the balance of unrecognized tax benefits within the next 12 months. k. Net Loss Per Share Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as restricted stock and stock options, which would result in the issuance of incremental shares of common stock. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of restricted stock and stock options would be anti-dilutive. The following potentially dilutive securities outstanding as of December 31, 2022, 2021 and 2020 have been excluded from the computation of diluted weighted average shares outstanding, as their effects on net loss per share for the periods presented would be anti-dilutive: December 31, 2022 2021 2020 Stock options 6,276,016 5,224,913 4,546,484 Unvested restricted stock 2,114,512 989,822 173,800 8,390,528 6,214,735 4,720,284 l. Foreign Currency The Company has determined the functional currency of its Australian subsidiary to be the U.S. dollar. The Company records remeasurement gains and losses on monetary assets and liabilities, such as incentive and tax receivables and accounts payables, which are not in the functional currency of the operation. These remeasurement gains and losses are recorded in the consolidated statements of operations as they occur. m. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment. n. Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | (3) Fair Value Measurements The Company measures certain assets and liabilities at fair value in accordance with Accounting Standards Codification 820 (“ASC 820”), Fair Value Measurements and Disclosures Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3 — Valuations based on unobservable inputs and models that are supported by little or no market activity. In accordance with the fair value hierarchy described above, the following table sets forth the Company's financial assets measured at fair value on a recurring basis as of December 31, 2022 and 2021: Fair Value Measurement Carrying amount as of December 31, 2022 as of December 31, 2022 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 44,663,395 $ 44,663,395 $ — $ — $ 44,663,395 $ 44,663,395 $ — $ — Fair Value Measurement Carrying amount as of December 31, 2021 as of December 31, 2021 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 67,709,279 $ 67,709,279 $ — $ — $ 67,709,279 $ 67,709,279 $ — $ — |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of December 31, 2022 and 2021: December 31, December 31, 2022 2021 Prepaid development expenses $ 668,096 $ 543,897 Prepaid insurance 1,546,784 1,952,867 Deferred financing costs 155,956 137,615 Other current assets 537,895 197,013 Total prepaid expenses and other current assets $ 2,908,731 $ 2,831,392 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | (5) Property and Equipment Property and equipment consisted of the following as of December 31, 2022 and 2021: Estimated useful life December 31, December 31, (in years) 2022 2021 Equipment 2-5 $ 828,666 $ 740,543 Computer equipment 3-5 30,319 30,319 Furniture and fixtures 3-5 311,356 311,356 Leasehold improvements various 68,881 68,881 Construction in process 234,241 79,342 Total cost 1,473,463 1,230,441 Less accumulated depreciation (1,063,891) (844,608) Property and equipment, net $ 409,572 $ 385,833 Depreciation expense was $219,283, $247,140 and $207,035 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses | |
Accrued Expenses | (6) Accrued Expenses Accrued expenses consisted of the following as of December 31, 2022 and 2021: December 31, December 31, 2022 2021 Accrued compensation $ 2,016,402 $ 2,412,291 Accrued research and development 4,239,719 5,125,010 Other 758,761 359,297 Total accrued expenses $ 7,014,882 $ 7,896,598 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | (7) Stockholders’ Equity Preferred Stock The Company’s board of directors are authorized to issue up to 10.0 million shares of preferred stock, with any rights, preferences and privileges as it may designate. As of December 31, 2022, no shares of preferred stock were issued. Common Stock a. At The Market Financing In May 2021, the Company entered into a Controlled Equity Offering SM In August 2019, the Company entered into the 2019 Sales Agreement with the 2019 Sales Agents pursuant to which the Company sold $75.0 million of its common stock. In 2021, the Company sold and issued 10,244,326 shares of common stock under the 2019 Sales Agreement in the open market at a weighted average selling price of $4.22 per share, resulting in gross proceeds of $43.2 million. Net proceeds after deducting commissions and offering expenses were $42.2 million. In 2020, the Company sold and issued 6,596,873 shares of common stock in the open market at a weighted-average selling price of $4.81 per share, for gross proceeds of $31.7 million and net proceeds, after deducting commissions and offering expenses, of $30.7 million. As of February 9, 2021, the Company utilized the entire $75.0 million under the 2019 Sales Agreement. b. Equity Purchase Agreement On July 21, 2022 (the “Effective Date”), the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to which Lincoln Park committed to purchase up to $20.0 million of the Company’s common stock. Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $20.0 million of the Company’s common stock. Such sales of common stock will be subject to certain limitations, and may occur from time to time, at the Company’s sole discretion, over the 36-month 150,000, but that amount may be increased up to 300,000 shares, depending upon the market price of the Company’s common stock at the time of sale and subject to a maximum limit of $2.0 million per regular purchase. The purchase price per share for each such regular purchase will be based on prevailing market prices of the Company’s common stock immediately preceding the time of sale as computed under the Purchase Agreement. In addition to regular purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases. Pursuant to the terms of the Purchase Agreement, the Company issued 347,222 shares of its common stock to Lincoln Park as consideration for its commitment to purchase shares of the Company’s common stock under the Purchase Agreement. During the year ended December 31, 2022, the Company sold and issued 350,000 shares of common stock under the Purchase Agreement at a weighted average selling price of $0.92 per share, resulting in gross of $0.3 million and net proceeds, after deducting offering expenses, of $0.2 million. From January 1, 2023 through March 22, 2023, the Company sold and issued 1,950,000 shares of common stock under the Purchase Agreement at a weighted average selling price of $0.53 per share, resulting in gross and net proceeds of $1.0 million. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | (8) Stock-Based Compensation The Company maintains the Amended and Restated 2014 Omnibus Incentive Compensation Plan, as amended (the “2014 Plan”), which allows for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, performance units and other stock-based awards to employees, officers, non-employee directors, consultants and advisors. In addition, the 2014 Plan provides selected executive employees with the opportunity to receive bonus awards that are considered qualified performance-based compensation. The 2014 Plan is subject to automatic annual increases in the number of shares authorized for issuance under the 2014 Plan on the first trading day of January each year equal to the lesser of 1.5 million shares or 10% of the number of shares of common stock outstanding on the last trading day of December of the preceding year. As of January 1, 2023, the number of shares of common stock that may be issued under the 2014 Plan was automatically increased by 1.5 million shares, increasing the total number of shares of common stock available for issuance under the 2014 Plan to 12,304,869 shares. As of December 31, 2022, 1,442,876 shares were available for future issuance under the 2014 Plan. Options issued under the 2014 Plan have a contractual life of 10 years and may be exercisable in cash or as otherwise determined by the board of directors. The Company has granted options to employees and non-employee directors. Stock options granted to employees primarily vest 25% upon the first anniversary of the grant date and the balance of unvested options vests in quarterly installments over the remaining three years. Stock options granted annually to non-employee directors vest on the earlier of the one-year anniversary of the grant date, or the date of the Company’s next annual stockholders’ meeting that occurs after the grant date. The Company’s non-employee director compensation policy enables directors to receive stock options in lieu of quarterly cash payments. Any option granted to the directors in lieu of cash compensation vests in full on the grant date. The Company records forfeitures as they occur. Stock-based compensation expense for performance-based grants are recorded when management estimates that the vesting of these shares is probable based on the status of the Company’s research and development programs and other relevant factors, which were established by the Company’s board of directors. The Company’s board of directors determines if the performance conditions have been met. During 2021, the Company granted 551,911 time-based restricted stock awards to employees and non-employee directors of which 474,911 restricted stock awards remained outstanding as of December 31, 2022. In addition, during 2021, the Company granted 506,911 performance-based restricted stock awards to employees of which 187,964 restricted stock awards have fully vested and 281,947 restricted stock awards remained outstanding as of December 31, 2022. The performance-based conditions for these performance-based grants were deemed probable of achievement during 2021 and, as of December 31, 2022, the Company has recorded $1.7 million in stock-based compensation expense related to these grants. As of December 31, 2022, there was $13,565 of unrecognized stock-based compensation expense related to these performance-based awards, which will be expensed over the estimated service period related to each performance condition. During 2022, the Company granted 841,654 time-based restricted stock awards to employees, non-employee directors and consultants of which 804,654 restricted stock awards remained outstanding as of December 31, 2022. In addition, during 2022, the Company granted 556,500 performance-based restricted stock awards to employees of which 548,000 restricted stock awards remained outstanding as of December 31, 2022. As of December 31, 2022, satisfaction of the related performance conditions has not been deemed probable of being achieved and there was $1.1 million of unrecognized stock-based compensation expense related to these performance-based awards, which will be expensed over the estimated service period related to each performance condition once the performance conditions have been deemed probable. During the years ended December 31, 2022, 2021 and 2020, the Company recorded $4,331,727, $5,810,580, and $5,177,527, respectively, in stock-based compensation expense related to its stock option grants and restricted stock awards, as follows: Stock Option Grants Restricted stock awards 2022 2021 2020 2022 2021 2020 Research and development $ 1,032,267 $ 1,479,681 $ 2,053,675 $ 940,627 $ 1,348,290 $ 141,213 General and administrative 1,243,842 1,696,490 2,922,620 1,114,991 1,286,119 60,019 $ 2,276,109 $ 3,176,171 $ 4,976,295 $ 2,055,618 $ 2,634,409 $ 201,232 The following table summarizes the Company’s stock option activity: Weighted- Weighted- Average Average Aggregate Number Exercise Contractual Intrinsic of Shares Price Life (in Years) Value Outstanding as of December 31, 2020 4,546,484 $ 9.76 Granted 869,867 3.71 Exercised (13,125) 3.65 Forfeited (178,313) 10.69 Outstanding as of December 31, 2021 5,224,913 8.74 Granted 1,136,728 2.17 Forfeited (85,625) 10.97 Outstanding as of December 31, 2022 6,276,016 7.52 5.92 $ — Exercisable as of December 31, 2022 4,441,441 9.41 4.82 $ — Vested and expected to vest as of December 31, 2022 6,276,016 $ 7.52 The weighted-average grant date fair value of options granted during the years ended December 31, 2022, 2021, and 2020 was $1.74, $2.86, and $3.58, respectively. The fair values of stock options granted were calculated using the Black-Scholes option pricing model with the following weighted-average assumptions: Year ended December 31, 2022 2021 2020 Weighted-average risk-free interest rate 2.02% 0.40% 1.27% Expected term of options (in years) 6.11 6.21 6.18 Expected stock price volatility 100.23% 95.94% 82.00% Expected dividend yield 0% 0% 0% As of December 31, 2022, there was $3.3 million of unrecognized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.26 years. During the year ended December 31, 2021, the Company received $47,906 in cash from the exercise of employee stock options. The following table summarizes the restricted stock award activity under the 2014 Plan: Weighted Average Aggregate Grant Date Intrinsic Shares Fair Value Value Unvested as of December 31, 2020 173,800 $ 3.64 Granted 1,058,822 3.61 Forfeited (74,000) 3.58 Vested (168,800) 3.60 Unvested as of December 31, 2021 989,822 3.62 Granted 1,398,154 2.17 Forfeited (25,500) 2.41 Vested (247,964) 3.61 Unvested as of December 31, 2022 2,114,512 $ 2.86 $ 1,120,691 Expected to vest as of December 31, 2022 1,561,512 $ 2.85 $ 827,601 As of December 31, 2022, there was $1.1 million of unrecognized stock-based compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 0.56 years. |
Operating Lease Obligations
Operating Lease Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Operating Lease Obligations | |
Operating Lease Obligations | (9) Operating Lease Obligations The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), Accounting Standards Codification 842 (“ASC 842”) prospectively using the modified-retrospective method and elected the package of transition practical expedients that does not require reassessment of: (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and nonlease components, which consist principally of common area maintenance charges, and to exclude leases with an initial term of 12 months or less. The Company leases its headquarters where it occupies 10,877 square feet of office space. On March 1, 2021, the Company extended its lease for three additional years until May 31, 2024. The Company’s lease contains variable lease costs that do not depend on a rate or index and consist primarily of common area maintenance, taxes, and insurance charges. As the implicit rate was not readily determinable for the Company’s lease, the Company used an estimated incremental borrowing rate, or discount rate, to determine the initial present value of the lease payments. The discount rate for the lease was calculated using a synthetic credit rating model. As of March 1, 2021, the effective date of the lease modification, the Company remeasured the lease liability for the remaining portion of the lease and adjusted the lease liability to $755,085 and right-of-use assets to $752,391, which was recorded net of a deferred rent liability of $2,694. As of December 31, 2022, the Company’s right-of-use asset, net of amortization, was $336,215. Other operating lease information as of December 31, 2022: Weighted-average remaining lease term - operating leases 1.4 years Weighted-average discount rate - operating leases 2.76 % The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of December 31, 2022: December 31, Year ending: 2022 December 31, 2023 $ 240,420 December 31, 2024 100,175 Total minimum lease payments 340,595 Less: imputed lease interest (6,170) Total lease liabilities $ 334,425 Lease expense for the years ended December 31, 2022, 2021, and 2020 was comprised of the following: Year ended December 31, 2022 2021 2020 Operating lease expense $ 241,683 $ 244,209 $ 256,837 Variable lease expense 61,625 60,864 58,697 Total lease expense $ 303,308 $ 305,073 $ 315,534 Total cash payments related to leases for the years ended December 31, 2022, 2021, and 2020 were $302,045, $310,448 and $318,561, respectively. |
Defined Contribution Retirement
Defined Contribution Retirement Plan | 12 Months Ended |
Dec. 31, 2022 | |
Defined Contribution Retirement Plan | |
Defined Contribution Retirement Plan | (10) Defined Contribution Retirement Plan The Company offers a tax-qualified defined contribution retirement plan, which we refer to as our 401(k) plan, to eligible employees, including our current named executive officers. Our 401(k) plan permits eligible employees to defer their annual eligible compensation subject to the limitations imposed by the Internal Revenue Service. The Company may, but is not required to, make discretionary employer matching contributions on behalf of eligible employees under this plan. The Company provides an employer match on the first 6% of employee contributions and employer matching contributions vest immediately. For the years ended December 31, 2022, 2021 and 2020, the Company provided an employer match of 67%, 33% and 33%, respectively. For the years ended December 31, 2022, 2021, and 2020, the Company’s contributions to the plan were $240,833, $111,258 and $111,846, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | (11) Income Taxes The Company’s U.S. and foreign loss before income taxes are set forth below: Year ended December 31, 2022 2021 2020 United States $ (33,308,897) $ (34,729,615) $ (40,407,933) Foreign (1,726,909) (2,579,409) (10,928,898) Total $ (35,035,806) $ (37,309,024) $ (51,336,831) The Company had $170.1 million and $160.6 million of federal net operating loss carryforwards and $5.7 million and $4.7 million of U.S. research tax credit carryforwards as of December 31, 2022 and 2021, respectively. The U.S. federal net operating loss carryforwards and research tax credit carryforwards begin to expire in 2028 2027 2028 The Tax Reform Act of 1986 (the Act) provides for limitation on the use of net operating loss and research and development tax credit carryforwards following certain ownership changes (as defined by the Act) that could limit the Company’s ability to utilize these carryforwards. The Company may have experienced various ownership changes, as defined by the Act, as a result of past financings. Accordingly, the Company’s ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes; therefore, the Company may not be able to take full advantage of these carryforwards for federal income tax purposes. The components of the net deferred income tax asset as of December 31, 2022 and 2021 are as follows: December 31, 2022 December 31, 2021 Deferred tax assets: Net operating loss carry forwards $ 49,832,469 $ 46,999,701 Research and development credit carry forwards 5,687,207 4,761,598 Research and development expenditure capitalization 5,436,581 — Stock-based compensation 9,277,449 8,656,457 Property and equipment 39,703 16,839 Other 786,861 703,134 Gross deferred tax assets 71,060,270 61,137,729 Less valuation allowance (71,060,270) (61,137,729) Net deferred tax asset $ — $ — The Tax Cuts and Jobs Act passed in 2017 included a provision which requires taxpayers to capitalize and amortize U.S.-based research or experimental expenditures (“R&E”) over a period of five years and non-U.S. R&E over 15 years effective for tax years beginning after December 31, 2021, pursuant to Internal Revenue Code Section 174. In assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against its net deferred tax assets as of December 31, 2022 and 2021, respectively, because the Company has determined that is it more likely than not that these assets will not be fully realized due to historic net operating losses incurred. The valuation allowance increased by $9.9 million and $6.6 million during the years ended December 31, 2022 and 2021, respectively, due primarily to the generation of net operating loss carryforwards during those years and the capitalization of R&E in 2022. The Company does not have unrecognized tax benefits as of December 31, 2022 and 2021, respectively. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: Year ended December 31, 2022 2021 2020 Federal income tax benefit at statutory rate 21.0 % 21.0 % 21.0 % State income tax, net of federal benefit 7.1 7.1 6.4 Nondeductible research and development expenses (0.7) (1.1) (4.6) Other permanent differences (1.6) (0.8) 0.2 Research and development credit benefit 2.8 2.6 2.2 Adjustment of prior years' income taxes (0.3) (11.0) (0.1) Change in valuation allowance (28.3) (17.8) (25.1) Effective income tax rate — % — % — % The Company and its subsidiaries are subject to income taxes in the U.S. federal jurisdiction, various state jurisdictions and Australia. The Company’s U.S. tax returns for the tax years 2011 to 2022 remain open and subject to examination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | (12) Commitments and Contingencies a. Leases The Company is a party to a noncancelable operating lease for office space, under a long-term lease arrangement. As of December 31, 2022, future minimum lease commitment for the Company’s noncancelable lease was $423,750. b. Employment Agreements The Company has entered into employment contracts and subsequent amendments with its officers and certain employees that provide for severance and continuation of benefits in the event of termination of employment either by the Company without cause or by the employee for good reason, both as defined in the agreements. In addition, in the event of termination of employment following a change in control, as defined in the employment contracts, either by the Company without cause or by the employee for good reason, any unvested portion of the employee’s stock options and/or restricted stock awards become immediately vested. c. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal fees are expensed as incurred. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | a. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to Form 10-K and Article 10 of Regulation S-X. |
Use of Estimates | b. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial |
Fair Value of Financial Instruments | c. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts payable and accrued expenses approximate fair value given their short-term nature. |
Cash and Cash Equivalents | d. Cash and Cash Equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. As of December 31, 2022 and 2021, the Company invested a portion of its cash balances in money market funds that seek to maintain a stable net asset value. These investments have been included as cash equivalents on the consolidated balance sheets. |
Incentive and Tax Receivables | e. Incentive and Tax Receivables The Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd (the “Subsidiary”), is incorporated in Australia. The Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, the Subsidiary is eligible to receive a cash refund from the Australian Taxation Office (“ATO”), for a percentage of the research and development costs expended by the Subsidiary in Australia. The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million (Australian) during the reimbursable period. The Company estimates the amount of cash refund it expects to receive related to the Australian research and development tax incentive program and records the incentives when it is probable 1) the Company will comply with relevant conditions of the program and 2) the incentive will be received. The Company evaluates its eligibility under tax incentive programs as of each balance sheet date based on the most current and relevant data available. If the Company is deemed to be ineligible or unable to receive the Australian research and development tax credit, or the Australian government significantly reduces or eliminates the tax credit, the actual cash refund the Company receives may materially differ from its estimates. In December 2018, the Company submitted an Advance Overseas Finding (“AOF”) application to a division of the Australian Government’s Department of Industry, Innovation and Science (“AusIndustry”), for a portion of the Company’s research and development activities incurred outside of Australia, which was approved by AusIndustry in July 2019. During the year ended December 31, 2019, the Company recorded $8.3 million as an incentive and tax receivable and recorded a corresponding credit During the three months ended March 31, 2022, the Company concluded its conversations with the ATO on these matters and made the decision to no longer pursue the AOF claim, resulting in the write off of both the AOF receivable and the corresponding reserve during the period. During the three months ended March 31, 2022, the Company received a payment of $8.0 million from the ATO for the non-AOF research and development incentive for the years ended December 31, 2018, 2019 and 2020. In addition, the Subsidiary incurs Goods and Services Tax (“GST”) on services provided by Australian vendors. As an Australian entity, the Subsidiary is entitled to a refund of the GST paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST incurred is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of December 31, 2022, incentive and tax receivables included $0.2 million for refundable GST on expenses incurred with Australian vendors during the three months ended December 31, 2022. Current incentive and tax receivables consisted of the following as of December 31, 2022 and 2021: December 31, December 31, 2022 2021 Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 $ — $ 3,144,152 Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 — 2,914,931 Research and development incentive (non-AOF) for the period 1/1/20 - 12/31/20 — 1,993,038 Research and development incentive (non-AOF) for the period 1/1/21 - 12/31/21 — 1,226,688 Research and development incentive (non-AOF) for the period 1/1/22 - 12/31/22 977,714 — Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 — 8,566,843 Goods and services tax 247,669 301,659 Total incentive and tax receivables before reserve for AOF 1,225,383 18,147,311 Reserve for research and development incentive (AOF) for the period 1/1/18 - 12/31/19 — (8,566,843) Total incentive and tax receivables - current assets $ 1,225,383 $ 9,580,468 |
Property and Equipment | f. Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized over the estimated useful life of the assets or the remaining lease term at the time the asset is placed into service, whichever is shorter. Repairs and maintenance costs are expensed as incurred. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in other expenses. |
Impairment of Long-Lived Assets | g. Impairment of Long-Lived Assets The Company assesses the recoverability of its long-lived assets, which include property and equipment, whenever significant events or changes in circumstances indicate an impairment may have occurred. If indicators of an impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the years ended December 31, 2022, 2021 and 2020, the Company determined that there was no impairment of its long-lived assets. |
Research and Development | h. Research and Development Research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants and employee-related expenses including salaries and benefits. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. Research and development expenses are recorded net of expected refunds of eligible research and development costs paid pursuant to the Australian research and development tax incentive program and GST incurred on services provided by Australian vendors. The following table summarizes research and development expenses for the years ended December 31, 2022, 2021, and 2020: Year ended December 31, 2022 2021 2020 Research and development expenses - before R&D incentive $ 22,101,576 $ 22,454,878 $ 29,437,551 Research and development incentive (non-AOF) (1,001,910) (1,030,389) (1,890,252) Research and development expenses (before impact of AOF) 21,099,666 21,424,489 27,547,299 Amounts reserved against AOF refund — — 8,107,695 Total research and development expenses $ 21,099,666 $ 21,424,489 $ 35,654,994 |
Stock-Based Compensation | i. Stock-Based Compensation The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the requisite service period of the award. Stock-based compensation expense for performance-based grants are recorded when management estimates that the vesting of these shares is probable based on the status of the Company’s research and development programs and other relevant factors, which were established by the Company’s board of directors. For grants of restricted stock the Company uses the closing price of the Company’s common stock on the date of grant. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock option awards. Estimating the fair value of stock option awards requires management to apply judgment and make estimates, including the expected volatility of the Company’s common stock, the expected term of the Company’s stock options and the expected dividend yield. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected term of stock options was estimated using the “simplified method,” as the Company has limited historical information to develop reasonable expectations about future exercise patterns and post vesting employment termination behavior for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For expected stock price volatility, the Company has historically used comparable public companies, in addition to the Company’s historical volatility, as a basis for its expected volatility to calculate the fair value of option grants. For option grants issued beginning in 2022, the Company used its own stock price volatility, over the expected term of the award, as the basis for its expected volatility. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected term of the option. |
Income Taxes | j. Income Taxes The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the consolidated financial statements in the period of enactment. The carrying amount of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2022 and 2021, the Company has concluded that a full valuation allowance is necessary for its net deferred tax assets. The Company has no liability for unrecognized tax benefits or tax-related penalties or interest at December 31, 2022 and does not expect a significant change in the balance of unrecognized tax benefits within the next 12 months. |
Net Loss Per Share | k. Net Loss Per Share Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as restricted stock and stock options, which would result in the issuance of incremental shares of common stock. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of restricted stock and stock options would be anti-dilutive. The following potentially dilutive securities outstanding as of December 31, 2022, 2021 and 2020 have been excluded from the computation of diluted weighted average shares outstanding, as their effects on net loss per share for the periods presented would be anti-dilutive: December 31, 2022 2021 2020 Stock options 6,276,016 5,224,913 4,546,484 Unvested restricted stock 2,114,512 989,822 173,800 8,390,528 6,214,735 4,720,284 |
Foreign Currency | l. Foreign Currency The Company has determined the functional currency of its Australian subsidiary to be the U.S. dollar. The Company records remeasurement gains and losses on monetary assets and liabilities, such as incentive and tax receivables and accounts payables, which are not in the functional currency of the operation. These remeasurement gains and losses are recorded in the consolidated statements of operations as they occur. |
Segment Information | m. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment. |
Recent Accounting Pronouncements | n. Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of incentive and tax receivables | December 31, December 31, 2022 2021 Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 $ — $ 3,144,152 Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 — 2,914,931 Research and development incentive (non-AOF) for the period 1/1/20 - 12/31/20 — 1,993,038 Research and development incentive (non-AOF) for the period 1/1/21 - 12/31/21 — 1,226,688 Research and development incentive (non-AOF) for the period 1/1/22 - 12/31/22 977,714 — Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 — 8,566,843 Goods and services tax 247,669 301,659 Total incentive and tax receivables before reserve for AOF 1,225,383 18,147,311 Reserve for research and development incentive (AOF) for the period 1/1/18 - 12/31/19 — (8,566,843) Total incentive and tax receivables - current assets $ 1,225,383 $ 9,580,468 |
Schedule of research and development expenses | Year ended December 31, 2022 2021 2020 Research and development expenses - before R&D incentive $ 22,101,576 $ 22,454,878 $ 29,437,551 Research and development incentive (non-AOF) (1,001,910) (1,030,389) (1,890,252) Research and development expenses (before impact of AOF) 21,099,666 21,424,489 27,547,299 Amounts reserved against AOF refund — — 8,107,695 Total research and development expenses $ 21,099,666 $ 21,424,489 $ 35,654,994 |
Summary of potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding | December 31, 2022 2021 2020 Stock options 6,276,016 5,224,913 4,546,484 Unvested restricted stock 2,114,512 989,822 173,800 8,390,528 6,214,735 4,720,284 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Summary of financial assets measured at fair value on a recurring basis | Fair Value Measurement Carrying amount as of December 31, 2022 as of December 31, 2022 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 44,663,395 $ 44,663,395 $ — $ — $ 44,663,395 $ 44,663,395 $ — $ — Fair Value Measurement Carrying amount as of December 31, 2021 as of December 31, 2021 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 67,709,279 $ 67,709,279 $ — $ — $ 67,709,279 $ 67,709,279 $ — $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | December 31, December 31, 2022 2021 Prepaid development expenses $ 668,096 $ 543,897 Prepaid insurance 1,546,784 1,952,867 Deferred financing costs 155,956 137,615 Other current assets 537,895 197,013 Total prepaid expenses and other current assets $ 2,908,731 $ 2,831,392 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment | Estimated useful life December 31, December 31, (in years) 2022 2021 Equipment 2-5 $ 828,666 $ 740,543 Computer equipment 3-5 30,319 30,319 Furniture and fixtures 3-5 311,356 311,356 Leasehold improvements various 68,881 68,881 Construction in process 234,241 79,342 Total cost 1,473,463 1,230,441 Less accumulated depreciation (1,063,891) (844,608) Property and equipment, net $ 409,572 $ 385,833 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, December 31, 2022 2021 Accrued compensation $ 2,016,402 $ 2,412,291 Accrued research and development 4,239,719 5,125,010 Other 758,761 359,297 Total accrued expenses $ 7,014,882 $ 7,896,598 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense | Stock Option Grants Restricted stock awards 2022 2021 2020 2022 2021 2020 Research and development $ 1,032,267 $ 1,479,681 $ 2,053,675 $ 940,627 $ 1,348,290 $ 141,213 General and administrative 1,243,842 1,696,490 2,922,620 1,114,991 1,286,119 60,019 $ 2,276,109 $ 3,176,171 $ 4,976,295 $ 2,055,618 $ 2,634,409 $ 201,232 |
Summary of stock option activity | Weighted- Weighted- Average Average Aggregate Number Exercise Contractual Intrinsic of Shares Price Life (in Years) Value Outstanding as of December 31, 2020 4,546,484 $ 9.76 Granted 869,867 3.71 Exercised (13,125) 3.65 Forfeited (178,313) 10.69 Outstanding as of December 31, 2021 5,224,913 8.74 Granted 1,136,728 2.17 Forfeited (85,625) 10.97 Outstanding as of December 31, 2022 6,276,016 7.52 5.92 $ — Exercisable as of December 31, 2022 4,441,441 9.41 4.82 $ — Vested and expected to vest as of December 31, 2022 6,276,016 $ 7.52 |
Schedule of weighted-average assumptions used to calculate fair values of stock options | Year ended December 31, 2022 2021 2020 Weighted-average risk-free interest rate 2.02% 0.40% 1.27% Expected term of options (in years) 6.11 6.21 6.18 Expected stock price volatility 100.23% 95.94% 82.00% Expected dividend yield 0% 0% 0% |
Summary of restricted stock activity | Weighted Average Aggregate Grant Date Intrinsic Shares Fair Value Value Unvested as of December 31, 2020 173,800 $ 3.64 Granted 1,058,822 3.61 Forfeited (74,000) 3.58 Vested (168,800) 3.60 Unvested as of December 31, 2021 989,822 3.62 Granted 1,398,154 2.17 Forfeited (25,500) 2.41 Vested (247,964) 3.61 Unvested as of December 31, 2022 2,114,512 $ 2.86 $ 1,120,691 Expected to vest as of December 31, 2022 1,561,512 $ 2.85 $ 827,601 |
Operating Lease Obligations (Ta
Operating Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating Lease Obligations | |
Schedule of other operating lease information | Weighted-average remaining lease term - operating leases 1.4 years Weighted-average discount rate - operating leases 2.76 % |
Schedule of operating lease liabilities maturity analysis | December 31, Year ending: 2022 December 31, 2023 $ 240,420 December 31, 2024 100,175 Total minimum lease payments 340,595 Less: imputed lease interest (6,170) Total lease liabilities $ 334,425 |
Schedule of lease expense | Year ended December 31, 2022 2021 2020 Operating lease expense $ 241,683 $ 244,209 $ 256,837 Variable lease expense 61,625 60,864 58,697 Total lease expense $ 303,308 $ 305,073 $ 315,534 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of U.S. and foreign loss before income taxes | Year ended December 31, 2022 2021 2020 United States $ (33,308,897) $ (34,729,615) $ (40,407,933) Foreign (1,726,909) (2,579,409) (10,928,898) Total $ (35,035,806) $ (37,309,024) $ (51,336,831) |
Schedule of components of the net deferred income tax asset | December 31, 2022 December 31, 2021 Deferred tax assets: Net operating loss carry forwards $ 49,832,469 $ 46,999,701 Research and development credit carry forwards 5,687,207 4,761,598 Research and development expenditure capitalization 5,436,581 — Stock-based compensation 9,277,449 8,656,457 Property and equipment 39,703 16,839 Other 786,861 703,134 Gross deferred tax assets 71,060,270 61,137,729 Less valuation allowance (71,060,270) (61,137,729) Net deferred tax asset $ — $ — |
Reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes | Year ended December 31, 2022 2021 2020 Federal income tax benefit at statutory rate 21.0 % 21.0 % 21.0 % State income tax, net of federal benefit 7.1 7.1 6.4 Nondeductible research and development expenses (0.7) (1.1) (4.6) Other permanent differences (1.6) (0.8) 0.2 Research and development credit benefit 2.8 2.6 2.2 Adjustment of prior years' income taxes (0.3) (11.0) (0.1) Change in valuation allowance (28.3) (17.8) (25.1) Effective income tax rate — % — % — % |
Nature of Business and Liquid_2
Nature of Business and Liquidity (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Nature of Business and Liquidity | ||
Accumulated deficit | $ 274,517,285 | $ 239,481,479 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Incentive and Tax Receivable (Details) - Australian Taxation Office - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2019 | Dec. 31, 2022 | |
Incentive and Tax Receivable | |||
Aggregate revenue maximum to be eligible to receive a cash refund | $ 20 | ||
Research and development incentive and tax receivable | $ 8.3 | ||
Research and development incentive tax credit | $ 8.3 | ||
Research and development incentive | $ 8 | ||
Incentive And Tax Receivables Current | |||
Incentive and Tax Receivable | |||
Estimated GST receivable | $ 0.2 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Current incentive and Tax Receivable (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Incentive and Tax Receivable | ||
Total incentive and tax receivables - current assets | $ 1,225,383 | $ 9,580,468 |
Australian Taxation Office | ||
Incentive and Tax Receivable | ||
Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 | 3,144,152 | |
Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 | 2,914,931 | |
Research and development incentive (non-AOF) for the period 1/1/20 - 12/31/20 | 1,993,038 | |
Research and development incentive (non-AOF) for the period 1/1/21 - 12/31/21 | 1,226,688 | |
Research and development incentive (non-AOF) for the period 1/1/22 - 12/31/22 | 977,714 | |
Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 | 8,566,843 | |
Goods and services tax | 247,669 | 301,659 |
Total incentive and tax receivables before reserve for AOF | 1,225,383 | 18,147,311 |
Reserve for research and development incentive (AOF) for the period 1/1/18 - 12/31/19 | (8,566,843) | |
Total incentive and tax receivables - current assets | $ 1,225,383 | $ 9,580,468 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Impairment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development | |||
Research and development expenses - before R&D incentive | $ 22,101,576 | $ 22,454,878 | $ 29,437,551 |
Research and development incentive (non-AOF) | (1,001,910) | (1,030,389) | (1,890,252) |
Research and development expenses (before impact of AOF) | 21,099,666 | 21,424,489 | 27,547,299 |
Amounts reserved against AOF refund | 8,107,695 | ||
Total research and development expense | $ 21,099,666 | $ 21,424,489 | $ 35,654,994 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Unrecognized tax benefits | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Interest and penalties accrued | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Anti-dilutive securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Anti-dilutive securities | 8,390,528 | 6,214,735 | 4,720,284 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Anti-dilutive securities | 6,276,016 | 5,224,913 | 4,546,484 |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Anti-dilutive securities | 2,114,512 | 989,822 | 173,800 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Segments (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Information | |
Number of operating segments | 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying value | ||
Fair value on a recurring basis | ||
Cash equivalents (money market accounts) | $ 44,663,395 | $ 67,709,279 |
Total | 44,663,395 | 67,709,279 |
Recurring | Fair Value Measurement | Level 1 | ||
Fair value on a recurring basis | ||
Cash equivalents (money market accounts) | 44,663,395 | 67,709,279 |
Total | $ 44,663,395 | $ 67,709,279 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets | ||
Prepaid development expenses | $ 668,096 | $ 543,897 |
Prepaid insurance | 1,546,784 | 1,952,867 |
Deferred financing costs | 155,956 | 137,615 |
Other current assets | 537,895 | 197,013 |
Total prepaid expenses and other current assets | $ 2,908,731 | $ 2,831,392 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment | |||
Total cost | $ 1,473,463 | $ 1,230,441 | |
Less accumulated depreciation | (1,063,891) | (844,608) | |
Property and equipment, net | 409,572 | 385,833 | |
Depreciation expense | 219,283 | 247,140 | $ 207,035 |
Equipment | |||
Property, Plant and Equipment | |||
Total cost | $ 828,666 | $ 740,543 | |
Equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 2 years | 2 years | |
Equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 5 years | 5 years | |
Computer equipment | |||
Property, Plant and Equipment | |||
Total cost | $ 30,319 | $ 30,319 | |
Computer equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 3 years | 3 years | |
Computer equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 5 years | 5 years | |
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Total cost | $ 311,356 | $ 311,356 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 3 years | 3 years | |
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 5 years | 5 years | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | various | various | |
Total cost | $ 68,881 | $ 68,881 | |
Construction in process | |||
Property, Plant and Equipment | |||
Total cost | $ 234,241 | $ 79,342 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Accrued compensation | $ 2,016,402 | $ 2,412,291 |
Accrued research and development | 4,239,719 | 5,125,010 |
Other | 758,761 | 359,297 |
Total accrued expenses | $ 7,014,882 | $ 7,896,598 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 18 Months Ended | |||||
Jul. 21, 2022 | Mar. 22, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 09, 2021 | May 31, 2021 | Aug. 31, 2019 | |
Sales of Stock | ||||||||
Proceeds from the issuance of common stock | $ 6,557,290 | $ 43,193,660 | $ 31,707,228 | |||||
Equity Purchase Agreement | ||||||||
Sales of Stock | ||||||||
Maximum aggregate value of common stock available for offering | $ 20,000,000 | |||||||
Maximum time period for right to sell shares from the effective date | 36 months | |||||||
Maximum number of shares that may sell per day in regular purchase | 150,000 | |||||||
Maximum number of shares that may sell per day depending upon closing price | 300,000 | |||||||
Maximum value limit per regular purchase | $ 2,000,000 | |||||||
Shares issued | 347,222 | 350,000 | ||||||
Weighted average selling price per share | $ 0.92 | |||||||
Proceeds from the issuance of common stock | $ 300,000 | |||||||
Net proceeds from the issuance of common stock | $ 200,000 | |||||||
2019 Sales Agreement. | ||||||||
Sales of Stock | ||||||||
Maximum aggregate value of common stock available for offering | $ 75,000,000 | |||||||
Shares issued | 10,244,326 | 6,596,873 | ||||||
Weighted average selling price per share | $ 4.22 | $ 4.81 | ||||||
Proceeds from the issuance of common stock | $ 43,200,000 | $ 31,700,000 | $ 75,000,000 | |||||
Net proceeds from the issuance of common stock | $ 42,200,000 | $ 30,700,000 | ||||||
2021 Sales Agreement | ||||||||
Sales of Stock | ||||||||
Maximum aggregate value of common stock available for offering | $ 75,000,000 | |||||||
Shares issued | 4,608,274 | |||||||
Weighted average selling price per share | $ 1.35 | |||||||
Proceeds from the issuance of common stock | $ 6,200,000 | |||||||
Net proceeds from the issuance of common stock | $ 5,800,000 | |||||||
Subsequent Event | Equity Purchase Agreement | ||||||||
Sales of Stock | ||||||||
Shares issued | 1,950,000 | |||||||
Weighted average selling price per share | $ 0.53 | |||||||
Net proceeds from the issuance of common stock | $ 1,000,000 | |||||||
Subsequent Event | 2019 Sales Agreement. | ||||||||
Sales of Stock | ||||||||
Shares issued | 1,179,077 | |||||||
Weighted average selling price per share | $ 0.56 | |||||||
Proceeds from the issuance of common stock | $ 700,000 | |||||||
Net proceeds from the issuance of common stock | $ 600,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation Narrative (Details) - 2014 Plan - USD ($) | 12 Months Ended | |||
Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | ||||
Annual threshold increase of authorized shares for issuance | 1,500,000 | |||
Annual threshold increase of authorized shares for issuance (as a percent) | 10% | |||
Additional number of shares authorized for issuance | 1,500,000 | |||
Shares reserved for issuance | 12,304,869 | |||
Shares available for issuance | 1,442,876 | |||
Stock options | ||||
Stock-Based Compensation | ||||
Contractual life (in years) | 10 years | |||
Share based compensation expense | $ 2,276,109 | $ 3,176,171 | $ 4,976,295 | |
Stock options | Employees | ||||
Stock-Based Compensation | ||||
Vesting percentage | 25% | |||
Vesting period | 3 years | |||
Stock options | Board of Directors | Maximum | ||||
Stock-Based Compensation | ||||
Vesting period | 1 year | |||
Time Based Restricted Stock | 2021 Award | ||||
Stock-Based Compensation | ||||
Shares granted | 551,911 | |||
Shares outstanding | 474,911 | |||
Time Based Restricted Stock | 2022 Award | ||||
Stock-Based Compensation | ||||
Shares granted | 841,654 | |||
Shares outstanding | 804,654 | |||
Performance-based awards | 2022 Award | ||||
Stock-Based Compensation | ||||
Unrecognized stock based compensation expense | $ 1,100,000 | |||
Performance Based Restricted Awards | 2021 Award | ||||
Stock-Based Compensation | ||||
Shares granted | 506,911 | |||
Shares outstanding | 281,947 | |||
Share based compensation expense | $ 1,700,000 | |||
Unrecognized stock based compensation expense | $ 13,565 | |||
Restricted stock vested | 187,964 | |||
Performance Based Restricted Awards | 2022 Award | ||||
Stock-Based Compensation | ||||
Shares granted | 556,500 | |||
Shares outstanding | 548,000 | |||
Stock Options and Restricted Stock Awards | ||||
Stock-Based Compensation | ||||
Share based compensation expense | $ 4,331,727 | $ 5,810,580 | $ 5,177,527 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - 2014 Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options | |||
Stock-Based Compensation | |||
Stock-based compensation | $ 2,276,109 | $ 3,176,171 | $ 4,976,295 |
Stock options | Research and development | |||
Stock-Based Compensation | |||
Stock-based compensation | 1,032,267 | 1,479,681 | 2,053,675 |
Stock options | General and administrative | |||
Stock-Based Compensation | |||
Stock-based compensation | 1,243,842 | 1,696,490 | 2,922,620 |
Restricted stock | |||
Stock-Based Compensation | |||
Stock-based compensation | 2,055,618 | 2,634,409 | 201,232 |
Restricted stock | Research and development | |||
Stock-Based Compensation | |||
Stock-based compensation | 940,627 | 1,348,290 | 141,213 |
Restricted stock | General and administrative | |||
Stock-Based Compensation | |||
Stock-based compensation | $ 1,114,991 | $ 1,286,119 | $ 60,019 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Activity, Unrecognized Costs, Valuation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Additional disclosures | |||
Proceeds from the exercise of stock options | $ 47,906 | ||
2014 Plan | Stock options | |||
Options | |||
Balance (in shares) | 5,224,913 | 4,546,484 | |
Granted (in shares) | 1,136,728 | 869,867 | |
Exercised (in shares) | (13,125) | ||
Forfeited (in shares) | (85,625) | (178,313) | |
Balance (in shares) | 6,276,016 | 5,224,913 | 4,546,484 |
Options exercisable (in shares) | 4,441,441 | ||
Options vested and expected to vest (in shares) | 6,276,016 | ||
Weighted average exercise price per share | |||
Balance (in dollars per shares) | $ 8.74 | $ 9.76 | |
Granted (in dollars per shares) | 2.17 | 3.71 | |
Exercised (in dollars per share) | 3.65 | ||
Forfeited (in dollars per share) | 10.97 | 10.69 | |
Balance (in dollars per shares) | 7.52 | $ 8.74 | $ 9.76 |
Options exercisable (in dollars per shares) | 9.41 | ||
Options vested and expected to vest (in dollars per share) | $ 7.52 | ||
Additional disclosures | |||
Options Outstanding Weighted Average Contractual term | 5 years 11 months 1 day | ||
Options Vested and Expected to Vest Weighted Average Contractual Life | 4 years 9 months 25 days | ||
Expected stock based compensation expense | $ 3,300,000 | ||
Recognition period for compensation costs | 2 years 3 months 3 days | ||
Proceeds from the exercise of stock options | $ 47,906 | ||
Weighted Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ 1.74 | $ 2.86 | $ 3.58 |
Assumptions and Methodology | |||
Weighted average risk-free interest rate (as a percent) | 2.02% | 0.40% | 1.27% |
Expected term of options (in years) | 6 years 1 month 9 days | 6 years 2 months 15 days | 6 years 2 months 4 days |
Expected stock price volatility (as a percent) | 100.23% | 95.94% | 82% |
Expected dividend yield (as a percent) | 0% | 0% | 0% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity, Unrecognized Costs (Details) - 2014 Plan - Restricted stock - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted stock award activity | ||
Unvested balance (in shares) | 989,822 | 173,800 |
Granted (in shares) | 1,398,154 | 1,058,822 |
Forfeited (in shares) | (25,500) | (74,000) |
Vested (in shares) | (247,964) | (168,800) |
Unvested balance (in shares) | 2,114,512 | 989,822 |
Weighted Average Grant Date Fair Value | ||
Unvested balance (in dollars per share) | $ 3.62 | $ 3.64 |
Granted (in dollars per share) | 2.17 | 3.61 |
Forfeited (in dollars per share) | 2.41 | 3.58 |
Vested (in dollars per share) | 3.61 | 3.60 |
Unvested balance (in dollars per share) | $ 2.86 | $ 3.62 |
Aggregate intrinsic value | $ 1,120,691 | |
Unvested restricted stock awards expected to vest (in shares) | 1,561,512 | |
Vested and expected to vest - Weighted average grant date fair value | $ 2.85 | |
Vested and expected to vest - Aggregate Intrinsic Value | $ 827,601 | |
Unrecognized compensation expense related to unvested awards | $ 1,100,000 | |
Recognition period for compensation costs | 6 months 21 days |
Operating Lease Obligations - N
Operating Lease Obligations - Narrative (Details) | 12 Months Ended | ||
Mar. 01, 2021 USD ($) | Dec. 31, 2022 USD ($) ft² | Dec. 31, 2021 USD ($) | |
Operating Lease Obligations | |||
Practical expedients - Package | true | ||
Practical expedients - Single lease component | true | ||
Area of leasable office space | ft² | 10,877 | ||
Extended term of lease | 3 years | ||
Operating lease liability | $ 755,085 | $ 334,425 | |
Right-of-use assets | 752,391 | $ 336,215 | $ 565,814 |
Deferred rent liability included in right-of-use assets | $ 2,694 |
Operating Lease Obligations - O
Operating Lease Obligations - Other Operating Lease Information (Details) | Dec. 31, 2022 |
Operating Lease Obligations | |
Weighted-average remaining lease term - operating leases | 1 year 4 months 24 days |
Weighted-average discount rate - operating leases | 2.76% |
Operating Lease Obligations - M
Operating Lease Obligations - Maturities (Details) - USD ($) | Dec. 31, 2022 | Mar. 01, 2021 |
Maturity Analysis of Operating Lease Liabilities | ||
December 31, 2024 | $ 240,420 | |
December 31, 2024 | 100,175 | |
Total minimum lease payments | 340,595 | |
Less: imputed lease interest | (6,170) | |
Total lease liabilities | $ 334,425 | $ 755,085 |
Operating Lease Obligations - L
Operating Lease Obligations - Lease Expense and Payments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease expense | |||
Operating lease expense | $ 241,683 | $ 244,209 | $ 256,837 |
Variable lease expense | 61,625 | 60,864 | 58,697 |
Total lease expense | 303,308 | 305,073 | 315,534 |
Cash payments related to leases | $ 302,045 | $ 310,448 | $ 318,561 |
Defined Contribution Retireme_2
Defined Contribution Retirement Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Retirement Plan | |||
Employer match percentage of the first 6% of employee contributions | 67% | 33% | 33% |
Percentage of employee's gross pay for which the Company makes an employer match | 6% | ||
Defined contribution expense | $ 240,833 | $ 111,258 | $ 111,846 |
Income Taxes - Loss Before Taxe
Income Taxes - Loss Before Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
U.S. and foreign loss before income taxes | |||
United States | $ (33,308,897) | $ (34,729,615) | $ (40,407,933) |
Foreign | (1,726,909) | (2,579,409) | (10,928,898) |
Loss before income taxes | $ (35,035,806) | $ (37,309,024) | $ (51,336,831) |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Research Tax Credit Carryforward | ||
Operating loss and tax credit carryforwards | ||
Tax credit carryforwards | $ 5.7 | $ 4.7 |
Tax credit carryforward, expiration date | Dec. 31, 2027 | |
Federal | ||
Operating loss and tax credit carryforwards | ||
Net operating loss carryforwards | $ 170.1 | 160.6 |
Operating loss carryforwards, expiration date | Dec. 31, 2028 | |
State | ||
Operating loss and tax credit carryforwards | ||
Net operating loss carryforwards | $ 170.2 | 160.6 |
Operating loss carryforwards, expiration date | Dec. 31, 2028 | |
Foreign | Australian Taxation Office | ||
Operating loss and tax credit carryforwards | ||
Net operating loss carryforwards | $ 2.8 | $ 3 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax assets | ||
Net operating loss carry forwards | $ 49,832,469 | $ 46,999,701 |
Research and development credit carry forwards | 5,687,207 | 4,761,598 |
Research and development expenditure capitalization | 5,436,581 | |
Stock-based compensation | 9,277,449 | 8,656,457 |
Property and equipment | 39,703 | 16,839 |
Other | 786,861 | 703,134 |
Gross deferred tax assets | 71,060,270 | 61,137,729 |
Less valuation allowance | (71,060,270) | (61,137,729) |
Net deferred tax asset | 0 | 0 |
Increase in valuation allowance | 9,900,000 | 6,600,000 |
Unrecognized tax benefits | ||
Unrecognized Tax Benefits | $ 0 | $ 0 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes | |||
Federal income tax benefit at statutory rate | 21% | 21% | 21% |
State income tax, net of federal benefit | 7.10% | 7.10% | 6.40% |
Nondeductible research and development expenses | (0.70%) | (1.10%) | (4.60%) |
Other permanent differences | (1.60%) | (0.80%) | 0.20% |
Research and development credit benefit | 2.80% | 2.60% | 2.20% |
Adjustment of prior years' income taxes | (0.30%) | (11.00%) | (0.10%) |
Change in valuation allowance | (28.30%) | (17.80%) | (25.10%) |
Effective income tax rate | 0% | 0% | 0% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Dec. 31, 2022 USD ($) |
Operating Lease Commitments Due | |
Future minimum lease commitment for noncancelable lease | $ 423,750 |