Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 05, 2021 | Jun. 30, 2020 | |
Document Information Line Items | |||
Entity Registrant Name | TFF Pharmaceuticals, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 23,139,900 | ||
Entity Public Float | $ 83,662,145 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001733413 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity File Number | 001-39102 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 35,300,805 | $ 28,094,936 |
Prepaid assets and other current assets | 2,258,229 | 1,092,462 |
Total current assets | 37,559,034 | 29,187,398 |
Property and equipment, net | 1,102,808 | |
Total assets | 38,661,842 | 29,187,398 |
Current liabilities: | ||
Accounts payable | 1,297,725 | 410,638 |
Deferred research grant revenue | 24,315 | |
Total current liabilities | 1,322,040 | 410,638 |
Accrued research and development expense (see Note 5) | 1,132,013 | |
Total liabilities | 1,322,040 | 1,542,651 |
Commitments and contingencies (see Note 4) | ||
Stockholders’ equity: | ||
Common stock; $0.001 par value, 45,000,000 shares authorized; 22,534,874 and 18,450,992 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 22,535 | 18,451 |
Additional paid-in capital | 71,648,453 | 43,338,710 |
Accumulated other comprehensive loss | (51,538) | |
Accumulated deficit | (34,279,648) | (15,712,414) |
Total stockholders’ equity | 37,339,802 | 27,644,747 |
Total liabilities and stockholders’ equity | $ 38,661,842 | $ 29,187,398 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 22,534,874 | 18,450,992 |
Common stock, shares outstanding | 22,534,874 | 18,450,992 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses: | ||
Research and development | $ 10,681,565 | $ 8,822,226 |
General and administrative | 8,012,085 | 3,165,331 |
Total operating expenses | 18,693,650 | 11,987,557 |
Loss from operations | (18,693,650) | (11,987,557) |
Other income: | ||
Interest income | 126,416 | 117,329 |
Total other income | 126,416 | 117,329 |
Net loss | (18,567,234) | (11,870,228) |
Preferred stock dividend | (875,359) | |
Deemed dividend for beneficial conversion feature of Series A Preferred Stock | (23,929,751) | |
Net loss applicable to common stock | $ (18,567,234) | $ (36,675,338) |
Net loss applicable to common stock per share, basic and diluted (in Dollars per share) | $ (0.91) | $ (5.31) |
Weighted average common shares outstanding, basic and diluted (in Shares) | 20,425,162 | 6,904,983 |
Net loss | $ (18,567,234) | $ (11,870,228) |
Foreign currency translation adjustments | (51,538) | |
Comprehensive loss | $ (18,618,772) | $ (11,870,228) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 4,000 | $ 596,724 | $ (3,842,186) | $ (3,241,462) | |
Balance (in Shares) at Dec. 31, 2018 | 4,000,000 | ||||
Issuance of common stock in connection with IPO, including underwriter’s over- allotment, net of offering costs and underwriter’s discount | $ 4,879 | 21,748,969 | 21,753,848 | ||
Issuance of common stock in connection with IPO, including underwriter’s over- allotment, net of offering costs and underwriter’s discount (in Shares) | 4,879,300 | ||||
Stock-based compensation | 590,041 | 590,041 | |||
Dividends on preferred stock | (875,359) | (875,359) | |||
Conversion of Series A Preferred Stock (including accrued dividends) to common stock | $ 9,572 | 21,278,335 | 21,287,907 | ||
Conversion of Series A Preferred Stock (including accrued dividends) to common stock (in Shares) | 9,571,692 | ||||
Net loss | (11,870,228) | (11,870,228) | |||
Balance at Dec. 31, 2019 | $ 18,451 | 43,338,710 | (15,712,414) | 27,644,747 | |
Balance (in Shares) at Dec. 31, 2019 | 18,450,992 | ||||
Sale of common stock, net of offering costs | $ 3,048 | 24,277,235 | 24,280,283 | ||
Sale of common stock, net of offering costs (in Shares) | 3,048,654 | ||||
Issuance of common stock for accrued research and development expense | $ 221 | 1,131,792 | 1,132,013 | ||
Issuance of common stock for accrued research and development expense (in Shares) | 220,666 | ||||
Issuance of common stock for stock option exercises | $ 285 | 714,097 | 714,382 | ||
Issuance of common stock for stock option exercises (in Shares) | 285,003 | ||||
Issuance of common stock in connection with cashless warrant exercises | $ 530 | (530) | |||
Issuance of common stock in connection with cashless warrant exercises (in Shares) | 529,559 | ||||
Stock-based compensation | 2,187,149 | 2,187,149 | |||
Foreign currency translation adjustment | (51,538) | (51,538) | |||
Net loss | (18,567,234) | (18,567,234) | |||
Balance at Dec. 31, 2020 | $ 22,535 | $ 71,648,453 | $ (51,538) | $ (34,279,648) | $ 37,339,802 |
Balance (in Shares) at Dec. 31, 2020 | 22,534,874 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (18,567,234) | $ (11,870,228) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 2,187,149 | 590,041 |
Changes in operating assets and liabilities: | ||
Prepaid assets | (1,122,495) | (1,080,397) |
Accounts payable | 862,676 | 12,449 |
Deferred research grant revenue | 24,315 | |
Accrued research and development expense | 1,132,013 | |
Net cash used in operating activities | (16,615,589) | (11,216,122) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,102,808) | |
Net cash used in investing activities | (1,102,808) | |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock in connection with IPO | 21,851,160 | |
Net proceeds from issuance of preferred stock | 7,198,227 | |
Net proceeds from issuance of common stock | 24,280,283 | |
Proceeds from issuance of common stock for stock option exercises | 714,382 | |
Net cash provided by financing activities | 24,994,665 | 29,049,387 |
Effect of exchange rate changes on cash and cash equivalents | (70,399) | |
Net increase in cash and cash equivalents | 7,205,869 | 17,833,265 |
Cash and cash equivalents at beginning of year | 28,094,936 | 10,261,671 |
Cash and cash equivalents at end of year | 35,300,805 | 28,094,936 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accrued dividend | 875,359 | |
Conversion of Series A Preferred Stock (including accrued dividends) to common stock | 21,287,907 | |
Offering costs netted with proceeds from IPO | 97,312 | |
Deemed dividend for beneficial conversion feature of Series A Preferred Stock | 23,929,751 | |
Cashless exercise of warrants | 530 | |
Issuance of common stock for accrued research and development expense | $ 1,132,013 |
Organization And Description Of
Organization And Description Of Business | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS TFF Pharmaceuticals, Inc. (the “Company”) was incorporated in the State of Delaware on January 24, 2018 by Lung Therapeutics, Inc. (“LTI”), at which time the Company and LTI entered into a Contribution and Subscription Agreement (“Contribution Agreement”) pursuant to which LTI agreed to transfer to the Company certain of LTI’s non-core intellectual property rights and other assets, including LTI’s rights under a patent license agreement with the University of Texas at Austin (see Note 5), in exchange for 4,000,000 shares of the Company’s common stock. The transactions under the Contribution Agreement closed in March 2018. LTI’s basis in such assets were minimal. LTI is an early-stage biotechnology company focused on the development of certain technologies in the pulmonary field. The Company’s initial focus is on the development of inhaled dry powder drugs to enhance the treatment of pulmonary diseases and conditions. In December 2019, the Company established a wholly-owned Australian subsidiary, TFF Pharmaceuticals Australia Pty Ltd (“TFF Australia”), in order to conduct clinical research. TFF Pharmaceuticals, Inc., along with TFF Australia, are collectively referred to as the “Company”. The Company is in the development stage and is devoting substantially all of its efforts toward technology research and development. October 2019 Initial Public Offering In October 2019, the Company completed an initial public offering (“IPO”), selling 4,400,000 shares of common stock at an offering price of $5.00 per share. The Company received gross proceeds of approximately $22,000,000. In addition, the Company granted the underwriter a 45-day option to purchase an additional 660,000 shares of common stock at the initial public offering price, less underwriting discounts and commissions. The option was exercised in November 2019 and the underwriter purchased an additional 479,300 shares of common stock and the Company received additional gross proceeds of approximately $2,397,000. August 2020 Private Placement On August 13, 2020, the Company conducted a private placement of 3,048,654 shares of its common stock, at a purchase price per share of $8.50, for aggregate gross proceeds to the Company of approximately $25,914,000, before deducting selling commissions and other offering expenses payable by the Company. After deducting the placement agent and other offering expenses, the Company received net proceeds of approximately $24,280,000. See Note 6 for additional details of the private placement. COVID-19 On March 11, 2020, the World Health Organization declared a novel strain of coronavirus disease (“COVID-19”) a global pandemic. At this time, the United States and certain other countries are the subject of lock-downs and self-isolation procedures, which have significantly limited business operations and restricted internal and external meetings. The Company had expected to commence Phase I clinical trials of its thin film freezing, or TFF, formulation of Tacrolimus in Australia in the first quarter of 2020, and on March 13, 2020 the Company received the approval of the Alfred Hospital Human Research Ethics Committee to commence Phase I trials, however, later in March 2020, the Company’s contract research organization in Australia informed the Company that because of the spread of the COVID-19 virus in Australia, there would be a delay in initiating the trial. During the second quarter of 2020, the Company was able to begin dosing in the Phase I Tacrolimus trial in Melbourne, Victoria, Australia. However, due to the resurgence of COVID-19 in the Melbourne area, in July 2020 the Phase I trials were delayed. With the flaring of COVID-19 in the Melbourne area and in order to remain dynamic, the Company opened a second clinical trial site in Brisbane, Queensland, Australia. and dosing in the Phase 1 clinical trial resumed in Australia during the third quarter 2020. We expect that dosing in this trial will be completed early in the second quarter of 2021. Any financial impact from the COVID-19 global pandemic cannot be reasonably estimated at this time, but may materially affect our business and financial condition. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. |
Liquidity and Management_s Plan
Liquidity and Management’s Plans | 12 Months Ended |
Dec. 31, 2020 | |
Liquidity And Managements Plans [Abstract] | |
LIQUIDITY AND MANAGEMENT’S PLANS | NOTE 2 – LIQUIDITY AND MANAGEMENT’S PLANS As of December 31, 2020, the Company had cash and cash equivalents of approximately $35,301,000 and a working capital surplus of approximately $36,237,000. The Company has not generated revenues since inception and has incurred recurring operating losses. The Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to pursue its product development. The Company expects to further increase its research and development activities, which will increase the amount of cash utilized subsequent to December 31, 2020. Specifically, the Company expects increased spending on research and development activities and higher payroll expenses as it increases its professional and scientific staff and continues to prepare for anticipated manufacturing activities. If we encounter unforeseen delays or expenses, we have the ability to curtail our presently planned level of operations. The Company currently believes its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of these consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect the financial position, results of operations and cash flows for all periods presented. Principles of Consolidation The consolidated financial statements include the accounts of TFF Pharmaceuticals, Inc. and its wholly-owned subsidiary, TFF Australia. All material intercompany accounts and transactions have been eliminated in consolidation. Foreign Currency The currency of TFF Australia, the Company’s international subsidiary, is in Australian dollars. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at each balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Geographic Concentrations The Company conducts business in the U.S. and Australia. As of December 31, 2020, the Company maintained 100% of its net property and equipment in the U.S. There was no property and equipment as of December 31, 2019. Deferred Offering Costs The Company complies with the requirements of Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs Cash and Cash Equivalents The Company maintains its operating accounts in financial institutions in the U.S. and in Australia. The balances are insured up to specified limits. The Company’s cash is maintained in checking accounts and money market funds with maturities of less than three months when purchased, which are readily convertible to known amounts of cash, and which in the opinion of management are subject to insignificant risk of loss in value. As of December 31, 2020 and 2019, the Company had cash in Australia of AUD$214,240 (US$165,092) and $0, respectively. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software. Assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for its intended use. As of December 31, 2020, all of the Company’s property and equipment consist of lab equipment that are considered construction in progress. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Fair Value of Financial Instruments Authoritative guidance requires disclosure of the fair value of financial instruments. The Company’s financial instruments consist of cash and cash equivalents and accounts payable, the carrying amounts of which approximate their estimated fair values primarily due to the short-term nature of the instruments or based on information obtained from market sources and management estimates. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Income Taxes In accordance with authoritative guidance, deferred tax assets and liabilities are recorded for temporary differences between the financial reporting and tax bases of assets and liabilities using the current enacted tax rate expected to be in effect when the differences are expected to reverse. A valuation allowance is recorded on deferred tax assets unless realization is considered more likely than not. The Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are not recorded as a tax benefit or expense in the current year. The Company recognizes interest and penalties, if any, related to uncertain tax positions in interest expense. No interest and penalties related to uncertain tax positions were accrued at either December 31, 2020 or 2019. The Company follows authoritative guidance which requires the evaluation of existing tax positions. The Company files in the federal and various state jurisdictions. Management has analyzed all open tax years, as defined by the statute of limitations, for all major jurisdictions. Open tax years are those that are open for examination by taxing authorities. The Company was incorporated during 2018 which is the only open year at this time. Revenue Recognition The Company entered into a feasibility and material transfer agreement (“Feasibility Agreement”) with a third party that provided the Company funds in return for certain research and development activities. Revenue from the Feasibility Agreement will be recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable conditions under the Feasibility Agreement have been met. The Feasibility Agreement is on a best-effort basis and does not require scientific achievement as a performance obligation. All fees received under the agreement are non-refundable. The costs associated with the agreement are expensed as incurred and will be reflected as a component of research and development expense in the accompanying consolidated statements of operations. Funds received from the Feasibility Agreement will be recorded as revenue as the Company is the principal participant in the arrangement because the activities under the Feasibility Agreement are part of the Company’s development programs. In those instances where the Company first receives consideration in advance of providing underlying services, the Company classifies such consideration as deferred revenue until (or as) the Company provides the underlying services. In those instances where the Company first provides the underlying services prior to its receipt of consideration, the Company records a grant receivable. As of December 31, 2020 and 2019, the Company had deferred grant revenue of $24,315 and $0, respectively. Research and Development Expenses In accordance with authoritative guidance, the Company charges research and development costs to operations as incurred. Research and development expenses consist of personnel costs for the design, development, testing and enhancement of the Company’s technology, and certain other allocated costs, such as depreciation and other facilities related expenditures. Basic and Diluted Earnings per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive share equivalents outstanding for the period, determined using the treasury-stock and if-converted methods. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Basic weighted average shares outstanding for the years ended December 31, 2020 and 2019 include 400,000 shares underlying a warrant to purchase common shares. As the shares underlying this warrant can be issued for little consideration (an aggregate exercise price of $0.01 per share), these shares are deemed to be issued for purposes of basic earnings per share. For the years ended December 31, 2020 and 2019, the Company had the following potential common stock equivalents outstanding which were not included in the calculation of diluted net loss per common share because inclusion thereof would be anti-dilutive: Year Ended Year Ended December 31, December 31, Stock Options 2,610,495 2,139,078 Warrants 417,355 1,076,463 3,027,850 3,215,541 Common Stock Warrants The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement) or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company’s freestanding derivatives consist of warrants to purchase common stock that were issued in connection with services provided to the Company. The Company evaluated these warrants to assess their proper classification and determined that the common stock warrants meet the criteria for equity classification in the consolidated balance sheet. Such warrants are measured at fair value, which the Company determines using the Black-Scholes-Merton option-pricing model. Beneficial Conversion Feature On the date of the IPO, the outstanding Series A Convertible Preferred Stock (“Series A Preferred Stock”), and related accrued and unpaid dividends, automatically converted into shares of the Company’s common stock. The conversion share calculation was based on the $2.50 initial issuance price for the Series A Preferred Stock plus any accrued but unpaid dividends and converted to common stock using a stated divisor conversion price equal to 50% of the IPO price to the public, which was $5.00 per share. In accordance with relevant accounting literature, since the stated terms of the conversion option did not permit the Company to compute the additional number of shares that it would need to issue upon conversion of the Series A Preferred Stock when the contingent event occurred, the Company recorded the beneficial conversion amount of approximately $23,930,000 as a deemed dividend at the date of the IPO. Stock-Based Compensation The Company computes stock-based compensation in accordance with authoritative guidance. The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value of its stock options. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of the common stock of the Company, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. As a result, if other assumptions had been used, stock-based compensation cost, as determined in accordance with authoritative guidance, could have been materially impacted. Furthermore, if the Company uses different assumptions on future grants, stock-based compensation cost could be materially affected in future periods. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include the fair value of stock-based compensation and warrants, valuation allowance against deferred tax assets and related disclosures. Actual results could differ from those estimates. Recent Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) Leases. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging – Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 4 – COMMITMENTS AND CONTINGENCIES Operating Leases In October 2018, the Company entered into a lease agreement for office space in Doylestown, Pennsylvania. The lease commenced on October 15, 2018, the Company exercised a one-year lease renewal in October 2019, and another one-year lease renewal in October 2020 that will expire on October 31, 2021. The lease has an additional one-year option for renewal, and the base rent is $36,000 per year. The Company has determined that the lease agreement is considered a short-term lease under ASC 842 and has not recorded a right-of-use asset or liability. The Company rents another office space on a month-to-month basis with no long-term commitment, which is considered a short-term lease as well. Short-term lease expense for the years ended December 31, 2020 and 2019 was approximately $59,000 and $28,000, respectively. Approximate future minimum lease payments required under the operating lease, as amended, are as follows: Year ending December 31, Amount 2021 $ 30,000 Legal The Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. While management believes that such matters are currently insignificant, matters arising in the ordinary course of business for which the Company is or could become involved in litigation may have a material adverse effect on its business and financial condition. To the Company’s knowledge, neither the Company nor any of its properties are subject to any pending legal proceedings. |
License and Agreements
License and Agreements | 12 Months Ended |
Dec. 31, 2020 | |
License And Agreements Disclosure [Abstract] | |
LICENSE AND AGREEMENTS | NOTE 5 – LICENSE AND AGREEMENTS In July 2015, the University of Texas at Austin (“UT”) granted to the Company’s former parent, LTI, an exclusive worldwide, royalty bearing license to the patent rights for the TFF platform in all fields of use, other than vaccines for which LTI received a non-exclusive worldwide, royalty bearing license to the patent rights for the TFF platform. In March 2018, LTI completed an assignment to the Company all of its interest to the TFF platform, including the patent license agreement with UT, at which time the Company paid UT an assignment fee of $100,000 in accordance with the patent license agreement. In November 2018, the Company and UT entered into an amendment to the patent license agreement pursuant to which, among other things, the Company’s exclusive patent rights to the TFF platform were expanded to all fields of use. The patent license agreement requires the Company to pay royalties and milestone payments and conform to a variety of covenants and agreements, and in the event of the Company’s breach of agreement, UT may elect to terminate the agreement. During the year ended December 31, 2019, the Company achieved one milestone by gaining IND approval on first indication of a licensed product on November 24, 2019. The milestone fee associated with this achievement to be paid is $50,000 and the Company must issue UT common shares equal to 1% of the Company’s outstanding shares of common stock, on a fully diluted basis, as of 30 days after IND approval, which was December 24, 2019. The total amount of common shares due and payable on December 31, 2019 to UT were 220,666 common shares, which have a fair value of approximately $1,132,000 based on the closing stock price of $5.13 on December 24, 2019. As of December 31, 2019, the Company had not paid the $50,000 or issued the shares and has included the $50,000 in accounts payable and the share amount due as a research and development expense payable. The Company paid the $50,000 and issued the shares in January 2020. As of the date of these consolidated financial statements, the Company is in compliance with the patent license agreement as all required amounts have been paid in accordance with the agreement. In May 2018, the Company entered into a master services agreement and associated individual study contracts with ITR Canada, Inc. (“ITR”) to provide initial contract pre-clinical research and development services for the Company’s drug product candidates. The fees payable for pre-clinical research and development services under these study contracts totaled $1,790,000, with no minimum fee requirement. In January 2019, the Company cancelled all of the individual study contracts with ITR and entered into a contract with 11036114 Canada Inc. (initially dba VJO Non-Clinical Development and now dba Strategy Point Innovations (“SPI”)) to complete additional pre-clinical research and development services in order to take advantage of eligible Canadian Tax Credits. The services related to the contract with SPI were sub-contracted to ITR under substantially the same terms as the initial contract with ITR, with fees payable for services under statements of work that are currently open totaling $4,582,000, as amended. During the years ended December 31, 2020 and 2019, the Company recorded research and development costs of approximately $1,177,000 and $2,746,000, respectively. In April 2019, the Company entered into a master services agreement with Irisys, LLC to provide contract manufacturing services for one of the Company’s drug product candidates, Voriconazole. The fees payable for open contract manufacturing services under this agreement total approximately $3,220,000, as amended, with additional pass-through costs. During the years ended December 31, 2020 and 2019, the Company recorded research and development costs of approximately $1,837,000 and $867,000, respectively. In June 2019, the Company entered into a master services agreement with CoreRx to provide contract manufacturing services for one of the Company’s drug product candidates, Tacrolimus. The fees payable for open contract manufacturing services under this agreement total approximately $1,103,000, as amended, with additional pass-through costs. During the years ended December 31, 2020 and 2019, the Company recorded research and development costs of approximately $839,000 and $290,000, respectively. In August 2019, the Company entered into a master services agreement and associated individual study contracts with Conform Clinical Development, Inc. and its affiliates, Les Entreprises Envie Inc. (dba Envie Ventures) and Desire Ventures LLC, which sub-contracted with Inflamax Research Limited (dba Cliantha Research) to perform a Phase I study of one of the Company’s drug candidates, Voriconazole. The fees payable for the open services under this contract total approximately $1,484,000, as amended. During the years ended December 31, 2020 and 2019, the Company recorded research and development costs of approximately $1,824,000 and $977,000, respectively. In January 2020, TFF Australia entered into a master consultancy agreement with Novotech (Australia) Pty Ltd. (formally known as Clinical Network Services Pty Ltd.) to provide initial contract clinical research and development services for the Company’s drug product candidates. The fees payable for clinical research and development services under these open study contracts totaled AUD$1,942,981 (US$1,355,580), as amended. During the year ended December 31, 2020, the Company recorded research and development costs of approximately AUD$590,000 (US$407,000). In May 2020, TFF Australia entered into an amended clinical trial research agreement with Nucleus Network Pty Ltd. to provide a Phase I study of one of the Company’s drug candidates, Tacrolimus. The fees payable for services under this contract totaled AUD$1,392,805 (US$953,388), as amended. During the year ended December 31, 2020, the Company recorded research and development costs of approximately AUD$489,000 (US$337,000). In August 2020, TFF Australia entered into a clinical trial research agreement with Q-Pharm Pty Ltd. to provide a Phase I study of one of the Company’s drug candidates, Tacrolimus. The fees payable for services under this contract totaled AUD$704,600 (US$505,488). During the year ended December 31, 2020, the Company recorded research and development costs of approximately AUD$557,000 (US$384,000). On August 12, 2020, the Company entered into a licensing and collaboration agreement with UNION therapeutics A/S in which UNION acquired an option to obtain a worldwide exclusive license for the TFF technology in combination with niclosamide. Pursuant to the terms of the license agreement, UNION can exercise its option to obtain the license within 45 days after the complete data has been received by UNION from investigator-initiated trials. Upon exercise of the option, UNION shall be responsible to pay all expenses incurred in the development of any licensed product. The Company will be eligible to receive milestone payments upon the achievement of certain milestones in the development the licensed products, based on completion of clinical trials, pre-marketing approvals and/or the receipt of at least $25,000,000 of grant funding. The Company will receive a single-digit tiered royalty on net sales. The Company will also be entitled to receive sales-related milestone payments based on the commercial success of the licensed products. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 – STOCKHOLDERS’ EQUITY Common Stock IPO In October 2019, the Company completed an IPO, selling 4,400,000 shares of common stock at an offering price of $5.00 per share. The Company received gross proceeds of approximately $22,000,000. In addition, the Company granted the underwriter a 45-day option to purchase an additional 660,000 shares of common stock at the initial public offering price. The option was exercised and the underwriter purchased an additional 479,300 shares of common stock and the Company received additional gross proceeds of approximately $2,397,000. The Company received net proceeds from the IPO and the underwriter’s purchase of additional shares of approximately $21,754,000, after deducting underwriting discounts and commissions and offering-related expenses. Warrants for 317,155 shares of the Company’s common stock were issued to the IPO underwriter at an exercise price of $6.25 per share as part of the underwriter’s compensation for the IPO. The estimated fair value of the warrants of approximately $977,000 was considered an offering cost and netted against additional paid-in capital. In conjunction with the IPO, the Company’s outstanding shares of Series A Preferred Stock automatically converted into 9,571,692 shares of its common stock (see below). Also in conjunction with the issuance of shares in the IPO, the Company granted options to officers and directors to purchase 627,984 shares of common stock at an exercise price of $5.00. UT Agreement In November 2019, the Company achieved a milestone in connection with the UT agreement (see Note 5). As a result of the milestone, the Company owed UT 220,666 shares of common stock, which had a fair value of approximately $1,132,000, which was accrued in accrued research and development expense as of December 31, 2019. In January 2020, the Company issued the 220,666 shares of common stock to UT. August 2020 Private Placement On August 10, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with certain institutional and other accredited investors pursuant to which the Company issued and sold to the investors 3,048,654 shares of the Company’s common stock at a price of $8.50 per share for gross proceeds of approximately $25.91 million, before deducting placement agent and other offering expenses. After deducting the placement agent and other offering expenses, the Company received net proceeds of approximately $24.28 million. The Purchase Agreement included customary representations, warranties, and covenants by the investors and the Company, and an indemnity from the Company in favor of the investors. Jefferies LLC acted as placement agent for the private placement and the private placement closed on August 13, 2020. Pursuant to the terms of the Registration Rights Agreement, the Company filed a resale registration statement on Form S-1 with the SEC that was declared effective on September 15, 2020. Stock Option Exercises During November and December 2020, 285,003 shares of common stock were issued in connection with the exercise of stock options for total proceeds of $714,382. Cashless Warrant Exercises During August through December 2020, 529,559 shares of common stock were issued in connection with the cashless exercise of 659,108 common stock warrants. Series A Convertible Preferred Stock Prior to our initial public offering in October 2019, the Company’s amended and restated certificate of incorporation authorized the Company to issue up to 10,000,000 shares of preferred stock, all of which was designated as Series A preferred stock and there were 8,930,000 shares of Series A preferred stock issued and outstanding immediately prior to the Company’s initial public offering. Pursuant to the Company’s amended and restated certificate of incorporation, all outstanding shares of Series A preferred stock automatically converted to common stock at the close of our initial public offering and thereafter the Company was no longer authorized to issue any preferred stock. The Series A Preferred Stock ranked senior to common stock with respect to dividends rights and liquidation preferences and had full voting rights. The Series A Preferred Stock accrued a dividend at a rate of 6% per annum, and $875,359 of dividends accrued during the year ended December 31, 2019. Pursuant to the Company’s amended and restated certificate of incorporation, holders of the Series A Preferred Stock had the following methods of conversion: (i) automatic conversion into common stock upon the consummation of an IPO at a conversion price of 50% of the IPO price, (ii) automatic conversion into common stock upon the consummation of a subsequent private placement of securities at a conversion price of 50% of the purchase price of the securities being sold by the Company approved by the holders of the Series A preferred stock, and (iii) at any time after the issuance date and until ten calendar days prior to the consummation of an IPO, each holder shall be entitled to convert into common stock at a conversion price of $2.50 per share. The Series A Preferred Stock automatically converted into 9,571,692 common shares upon completion of the IPO in October 2019, based on the number of shares of Series A Preferred Stock outstanding as of the date of the IPO. The conversion share calculation was based on the $2.50 initial issue price for the Series A Preferred Stock plus $1,603,709 of accrued and unpaid dividends and automatically converted into shares of the Company’s common stock using a stated divisor conversion price equal to 50% of the IPO price to the public which was $5.00 per share. In accordance with relevant accounting literature, since the terms of the conversion option did not permit the Company to compute the additional number of shares that it would need to issue upon conversion of the Series A Preferred when the contingent event occurred, the Company recorded the beneficial conversion amount of approximately $23,930,000 as a deemed dividend at the date of the IPO. 2019 Private Placement In May 2019, the Company entered into a securities purchase agreement with various accredited investors to raise gross proceeds of $8.2 million in a private placement (the “2019 Private Placement”), issuing 3,268,000 shares of its Series A Preferred Stock. The shares of the Series A Preferred Stock were sold for $2.50 per share. The Company received net proceeds of approximately $7.2 million from the 2019 Private Placement, after paying placement agent fees and offering expenses. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2020 | |
Warrants [Abstract] | |
WARRANTS | NOTE 7 – WARRANTS On March 13, 2018 and March 22, 2018, the Company issued to National Securities Corporation warrants to purchase shares of the Company’s common stock in an amount equal to 10% of the shares of common stock issuable upon conversion of 5,662,000 shares of the Company’s Series A Preferred Stock. In connection with the conversion of the Series A Preferred Stock as a result of the IPO, the Company issued additional warrants to purchase 53,679 shares of common stock. The additional warrants were considered offering costs and netted with the proceeds from the IPO. On May 16, 2019 and May 23, 2019, the Company issued to National Securities Corporation 326,800 warrants to purchase shares of the Company’s common stock. The fair value of the warrants on the grant date was estimated using the Black-Scholes-Merton option pricing model with a common stock value of $1.67 per share, a contractual life of 5 years, a dividend yield of 0%, a volatility of 89.6% and an assumed risk-free interest rate of 2.11%. The fair value of the warrants was determined to be approximately $347,000 and was included in general and administrative expenses in the statement of operations. On September 13, 2019, these warrants were cancelled by the individual warrant holders and the Company determined that the related expense should be reversed. The reversal of the expense was recorded during the three months ended September 30, 2019, when the warrants were cancelled. On October 29, 2019, the Company issued a ten-year warrant to purchase 43,794 shares of common stock at $5.00 per share to BP Directors, LP (“BP”). The warrant represented consideration for board service from Dr. Aaron Fletcher. The fair value of the warrant on the grant date was estimated using the Black-Scholes-Merton option pricing model with a common stock value of $5.01 per share, a contractual life of 6.0 years, a dividend yield of 0%, a volatility of 88.48% and an assumed risk-free interest rate of 1.70%. The warrant is subject to a 25% cliff vesting at one year from the date of grant and the balance vesting quarterly over the following two years. The fair value of the warrant was determined to be $161,419 and is being amortized in general and administrative expenses in the consolidated statements of operations over the vesting term. On November 26, 2019, the Company issued to National Securities Corporation and its representatives underwriter warrants to purchase 317,155 shares of the Company’s common stock in connection with the IPO. The exercise price of the warrants is $6.25 per share, each has a contractual life of 5 years and they were not exercisable for one year from the date of grant. On November 29, 2019, the Company issued a ten-year warrant to purchase 3,623 shares of common stock at $5.00 per share to BP. The warrant represented consideration for board service from Dr. Aaron Fletcher. The fair value of the warrant on the grant date was estimated using the Black-Scholes-Merton option pricing model with a common stock value of $5.26 per share, a contractual life of 6.0 years, a dividend yield of 0%, a volatility of 90.16% and an assumed risk-free interest rate of 1.68%. The warrant is subject to a 25% cliff vesting at one year from the date of grant and the balance vesting quarterly over the following two years. The fair value of the warrant was determined to be $14,300 and is being amortized in general and administrative expenses in the consolidated statements of operations over the vesting term. In determining the fair value for warrants, the expected life of the Company’s warrants was determined using the contractual life. The methodology in determining all other inputs to calculate the fair value utilizing the Black-Scholes-Merton option pricing model is the same as the stock option methodology described in Note 8 for stock options. A summary of warrant activity for the years ended December 31, 2020 and 2019 is as follows: Number of Shares Range of Exercise Prices Weighted-Average Exercise Prices Weighted-Average Remaining Life Outstanding at January 1, 2019 1,058,212 $ 0.01 – $2.50 $ 1.56 4.6 Issued 745,051 1.67 – 6.25 4.26 — Cancelled (326,800 ) 2.50 2.50 — Outstanding at December 31, 2019 1,476,463 0.01 – 6.25 2.71 4.1 Exercised (659,108 ) 2.50 – 6.25 2.75 — Outstanding at December 31, 2020 817,355 $ 0.01 – $6.25 $ 2.68 3.7 The warrants outstanding at December 31, 2020 had an aggregate intrinsic value of approximately $9,511,000. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | NOTE 8 – STOCK BASED COMPENSATION In January 2018, the Company’s board of directors approved its 2018 Stock Incentive Plan (“2018 Plan”). The 2018 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company initially reserved 1,630,000 shares of its common stock under the 2018 Plan; however, upon completion of the Company’s IPO the number of shares reserved for issuance under the 2018 Plan increased to 3,284,480, representing 15% of the Company’s outstanding shares of common stock calculated on a fully diluted basis upon the close of the IPO. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company will be eligible to receive incentive awards under the 2018 Plan. The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the years ended December 31, 2020 and 2019 for stock options and warrants: Year Ended Year Ended December 31, December 31, Research and development $ 140,278 $ — General and administrative 2,046,871 590,041 $ 2,187,149 $ 590,041 As of December 31, 2020, there was approximately $9,074,000 of total unrecognized compensation expense related to non-vested share-based compensation arrangements that are expected to vest. This cost is expected to be recognized over a weighted-average period of 2.4 years. The Company records compensation expense for employee awards with graded vesting using the straight-line method. The Company records compensation expense for nonemployee awards with graded vesting using the accelerated expense attribution method. The Company recognizes compensation expense over the requisite service period applicable to each individual award, which generally equals the vesting term. The Company estimates the fair value of each option award using the Black-Scholes-Merton option pricing model. Forfeitures are recognized when realized. The Company estimated the fair value of employee and non-employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service periods of the respective awards. The fair value of stock options issued was estimated using the following assumptions: Year Ended Year Ended Weighted average exercise price $ 10.42 $ 4.42 Weighted average grant date fair value $ 9.25 $ 3.08 Assumptions Expected volatility 87-91 % 88-90 % Expected term (in years) 6.3-10 6.3 Risk-free interest rate 0.36-1.47 % 1.68-2.31 % Expected dividend yield 0.00 % 0.00 % The risk-free interest rate was obtained from U.S. Treasury rates for the applicable periods. The Company’s expected volatility was based upon the historical volatility for industry peers and used an average of those volatilities. The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s activity for employee awards and the contractual term for nonemployee awards. The dividend yield considers that the Company has not historically paid dividends, and does not expect to pay dividends in the foreseeable future. For grants prior to the IPO, the fair value of the common stock was determined by the board of directors based on a variety of factors, including valuations prepared by third parties, the Company’s financial position, the status of development efforts within the Company, the current climate in the marketplace and the prospects of a liquidity event, among others. For grants after the IPO, the Company uses the closing stock price on the date of grant as the fair value of the common stock. The following table summarizes stock option activity during the years ended December 31, 2020 and 2019: Number of Shares Weighted-Average Weighted-Average Remaining Contractual Term (In Years) Intrinsic Value Outstanding at January 1, 2019 1,073,082 $ 2.50 9.64 $ — Granted 1,065,996 4.42 — — Outstanding at December 31, 2019 2,139,078 $ 3.46 9.17 $ 4,052,512 Granted 782,045 10.42 — — Exercised (285,003 ) 2.74 — — Cancelled (25,625 ) 4.86 — — Outstanding at December 31, 2020 2,610,495 $ 5.63 8.60 $ 22,789,233 Exercisable at December 31, 2020 755,885 $ 3.25 8.04 $ 8,365,946 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 – INCOME TAXES The Company had no income tax expense due to operating losses incurred for the years ended December 31, 2020 and 2019. The Company accounts for income taxes in accordance with ASC 740, which requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a full valuation allowance. The Company’s income tax expense for the years ended December 31, 2020 and 2019 are summarized below: December 31, December 31, Current: Federal $ - $ - State - - Foreign - - Total current $ - $ - Deferred: Federal $ (4,502,016 ) $ (2,952,519 ) State - - Foreign (480,666 ) - Change in valuation allowance 4,982,682 2,952,519 Total deferred - - Income tax provision (benefit) $ - $ - The Company’s deferred tax assets are as follows: December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 6,807,300 $ 2,789,541 Research and development tax credit 1,092,345 532,711 Intangibles 136,226 105,580 Stock compensation 761,741 387,098 Total deferred tax assets 8,797,612 3,814,930 Valuation allowances (8,797,612 ) (3,814,930 ) Net deferred tax assets $ - $ - The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows: December 31, December 31, Statutory rate 21.00 % 21.00 % State rate 0.00 % 0.00 % Foreign (1.81 )% 0.00 % Permanent book/tax differences (0.26 )% (0.12 )% Research and development credit 5.09 % 3.99 % Changes in valuation allowance (24.02 )% (24.87 )% Total - - As of December 31, 2020 and 2019, the Company had gross federal income tax net operating loss (“NOL”) carryforwards of $30,126,830 and $13,283,530, respectively, and federal research tax credits of $1,486,704 and $690,525, respectively. Additionally, the Company had gross foreign income tax net operating loss carryforwards of $1,602,220 as of December 31, 2020. The federal and foreign NOL have an indefinite life while the federal research tax credits will expire by 2040. Utilization of U.S. net operating losses and tax credit carryforwards may be limited by “ownership change” rules, as defined in Sections 382 and 383 of the Code. Similar rules may apply under state tax laws. The Company has not conducted a study to-date to assess whether a limitation would apply under Sections 382 and 383 of the Code as and when it starts utilizing its net operating losses and tax credits. The Company will continue to monitor activities in the future. In the event the Company previously experienced an ownership change, or should experience an ownership change in the future, the amount of net operating losses and research and development credit carryovers available in any taxable year could be limited and may expire unutilized. The CARES Act was signed into law on March 27, 2020 as a response to the economic challenges facing U.S. businesses caused by the COVID-19 global pandemic. The CARES Act allowed net operating loss incurred in 2018-2020 to be carried back five years or carried forward indefinitely, and to be fully utilized without being subjected to the 80% taxable income limitation. Net operating losses incurred after December 31, 2020 will be subjected to the 80% taxable income limitation. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during periods in which those temporary differences become deductible. Due to the uncertainty surrounding the realization of the benefits of its deferred assets, including NOL carryforwards, the Company has provided a 100% valuation allowance on its deferred tax assets at December 31, 2020. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, Income Taxes A reconciliation of the change in the unrecognized tax positions for the year ended December 31, 2020 is as follows: Federal and State Balance at December 31, 2019 $ 157,814 Additions for tax positions related to current year 318,374 Decreases for tax positions related to prior years (81,830 ) Balance at December 31, 2020 $ 394,358 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to December 31, 2020 through the filing date of this Annual Report. Based on its evaluation, nothing other than the events described below need to be disclosed. Between January 1, 2021 and March 10, 2021, 444,751 shares of common stock were issued in connection with the exercise of warrants and 160,275 shares of common stock were issued in connection with the exercise of stock options. The Company received total cash proceeds from the exercises of $585,700. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect the financial position, results of operations and cash flows for all periods presented. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of TFF Pharmaceuticals, Inc. and its wholly-owned subsidiary, TFF Australia. All material intercompany accounts and transactions have been eliminated in consolidation. |
Foreign Currency | Foreign Currency The currency of TFF Australia, the Company’s international subsidiary, is in Australian dollars. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at each balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). |
Geographic Concentrations | Geographic Concentrations The Company conducts business in the U.S. and Australia. As of December 31, 2020, the Company maintained 100% of its net property and equipment in the U.S. There was no property and equipment as of December 31, 2019. |
Deferred Offering Costs | Deferred Offering Costs The Company complies with the requirements of Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company maintains its operating accounts in financial institutions in the U.S. and in Australia. The balances are insured up to specified limits. The Company’s cash is maintained in checking accounts and money market funds with maturities of less than three months when purchased, which are readily convertible to known amounts of cash, and which in the opinion of management are subject to insignificant risk of loss in value. As of December 31, 2020 and 2019, the Company had cash in Australia of AUD$214,240 (US$165,092) and $0, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software. Assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for its intended use. As of December 31, 2020, all of the Company’s property and equipment consist of lab equipment that are considered construction in progress. Expenditures for repairs and maintenance of assets are charged to expense as incurred. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Authoritative guidance requires disclosure of the fair value of financial instruments. The Company’s financial instruments consist of cash and cash equivalents and accounts payable, the carrying amounts of which approximate their estimated fair values primarily due to the short-term nature of the instruments or based on information obtained from market sources and management estimates. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Income Taxes | Income Taxes In accordance with authoritative guidance, deferred tax assets and liabilities are recorded for temporary differences between the financial reporting and tax bases of assets and liabilities using the current enacted tax rate expected to be in effect when the differences are expected to reverse. A valuation allowance is recorded on deferred tax assets unless realization is considered more likely than not. The Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are not recorded as a tax benefit or expense in the current year. The Company recognizes interest and penalties, if any, related to uncertain tax positions in interest expense. No interest and penalties related to uncertain tax positions were accrued at either December 31, 2020 or 2019. The Company follows authoritative guidance which requires the evaluation of existing tax positions. The Company files in the federal and various state jurisdictions. Management has analyzed all open tax years, as defined by the statute of limitations, for all major jurisdictions. Open tax years are those that are open for examination by taxing authorities. The Company was incorporated during 2018 which is the only open year at this time. |
Revenue Recognition | Revenue Recognition The Company entered into a feasibility and material transfer agreement (“Feasibility Agreement”) with a third party that provided the Company funds in return for certain research and development activities. Revenue from the Feasibility Agreement will be recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable conditions under the Feasibility Agreement have been met. The Feasibility Agreement is on a best-effort basis and does not require scientific achievement as a performance obligation. All fees received under the agreement are non-refundable. The costs associated with the agreement are expensed as incurred and will be reflected as a component of research and development expense in the accompanying consolidated statements of operations. Funds received from the Feasibility Agreement will be recorded as revenue as the Company is the principal participant in the arrangement because the activities under the Feasibility Agreement are part of the Company’s development programs. In those instances where the Company first receives consideration in advance of providing underlying services, the Company classifies such consideration as deferred revenue until (or as) the Company provides the underlying services. In those instances where the Company first provides the underlying services prior to its receipt of consideration, the Company records a grant receivable. As of December 31, 2020 and 2019, the Company had deferred grant revenue of $24,315 and $0, respectively. |
Research and Development Expenses | Research and Development Expenses In accordance with authoritative guidance, the Company charges research and development costs to operations as incurred. Research and development expenses consist of personnel costs for the design, development, testing and enhancement of the Company’s technology, and certain other allocated costs, such as depreciation and other facilities related expenditures. |
Basic and Diluted Earnings per Common Share | Basic and Diluted Earnings per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive share equivalents outstanding for the period, determined using the treasury-stock and if-converted methods. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Basic weighted average shares outstanding for the years ended December 31, 2020 and 2019 include 400,000 shares underlying a warrant to purchase common shares. As the shares underlying this warrant can be issued for little consideration (an aggregate exercise price of $0.01 per share), these shares are deemed to be issued for purposes of basic earnings per share. For the years ended December 31, 2020 and 2019, the Company had the following potential common stock equivalents outstanding which were not included in the calculation of diluted net loss per common share because inclusion thereof would be anti-dilutive: Year Ended Year Ended December 31, December 31, Stock Options 2,610,495 2,139,078 Warrants 417,355 1,076,463 3,027,850 3,215,541 |
Common Stock Warrants | Common Stock Warrants The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement) or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company’s freestanding derivatives consist of warrants to purchase common stock that were issued in connection with services provided to the Company. The Company evaluated these warrants to assess their proper classification and determined that the common stock warrants meet the criteria for equity classification in the consolidated balance sheet. Such warrants are measured at fair value, which the Company determines using the Black-Scholes-Merton option-pricing model. |
Beneficial Conversion Feature | Beneficial Conversion Feature On the date of the IPO, the outstanding Series A Convertible Preferred Stock (“Series A Preferred Stock”), and related accrued and unpaid dividends, automatically converted into shares of the Company’s common stock. The conversion share calculation was based on the $2.50 initial issuance price for the Series A Preferred Stock plus any accrued but unpaid dividends and converted to common stock using a stated divisor conversion price equal to 50% of the IPO price to the public, which was $5.00 per share. In accordance with relevant accounting literature, since the stated terms of the conversion option did not permit the Company to compute the additional number of shares that it would need to issue upon conversion of the Series A Preferred Stock when the contingent event occurred, the Company recorded the beneficial conversion amount of approximately $23,930,000 as a deemed dividend at the date of the IPO. |
Stock-Based Compensation | Stock-Based Compensation The Company computes stock-based compensation in accordance with authoritative guidance. The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value of its stock options. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of the common stock of the Company, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. As a result, if other assumptions had been used, stock-based compensation cost, as determined in accordance with authoritative guidance, could have been materially impacted. Furthermore, if the Company uses different assumptions on future grants, stock-based compensation cost could be materially affected in future periods. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include the fair value of stock-based compensation and warrants, valuation allowance against deferred tax assets and related disclosures. Actual results could differ from those estimates. |
Recent Accounting Standards | Recent Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) Leases. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging – Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Basic and Diluted Earnings per Common Share | Year Ended Year Ended December 31, December 31, Stock Options 2,610,495 2,139,078 Warrants 417,355 1,076,463 3,027,850 3,215,541 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Year ending December 31, Amount 2021 $ 30,000 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Warrants [Abstract] | |
Schedule of warrant activity | Number of Shares Range of Exercise Prices Weighted-Average Exercise Prices Weighted-Average Remaining Life Outstanding at January 1, 2019 1,058,212 $ 0.01 – $2.50 $ 1.56 4.6 Issued 745,051 1.67 – 6.25 4.26 — Cancelled (326,800 ) 2.50 2.50 — Outstanding at December 31, 2019 1,476,463 0.01 – 6.25 2.71 4.1 Exercised (659,108 ) 2.50 – 6.25 2.75 — Outstanding at December 31, 2020 817,355 $ 0.01 – $6.25 $ 2.68 3.7 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense stock options and restricted stock | Year Ended Year Ended December 31, December 31, Research and development $ 140,278 $ — General and administrative 2,046,871 590,041 $ 2,187,149 $ 590,041 |
Schedule of fair value of employee stock options | Year Ended Year Ended Weighted average exercise price $ 10.42 $ 4.42 Weighted average grant date fair value $ 9.25 $ 3.08 Assumptions Expected volatility 87-91 % 88-90 % Expected term (in years) 6.3-10 6.3 Risk-free interest rate 0.36-1.47 % 1.68-2.31 % Expected dividend yield 0.00 % 0.00 % |
Schedule of stock option activity | Number of Shares Weighted-Average Weighted-Average Remaining Contractual Term (In Years) Intrinsic Value Outstanding at January 1, 2019 1,073,082 $ 2.50 9.64 $ — Granted 1,065,996 4.42 — — Outstanding at December 31, 2019 2,139,078 $ 3.46 9.17 $ 4,052,512 Granted 782,045 10.42 — — Exercised (285,003 ) 2.74 — — Cancelled (25,625 ) 4.86 — — Outstanding at December 31, 2020 2,610,495 $ 5.63 8.60 $ 22,789,233 Exercisable at December 31, 2020 755,885 $ 3.25 8.04 $ 8,365,946 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | December 31, December 31, Current: Federal $ - $ - State - - Foreign - - Total current $ - $ - Deferred: Federal $ (4,502,016 ) $ (2,952,519 ) State - - Foreign (480,666 ) - Change in valuation allowance 4,982,682 2,952,519 Total deferred - - Income tax provision (benefit) $ - $ - |
Schedule of deferred tax assets | December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 6,807,300 $ 2,789,541 Research and development tax credit 1,092,345 532,711 Intangibles 136,226 105,580 Stock compensation 761,741 387,098 Total deferred tax assets 8,797,612 3,814,930 Valuation allowances (8,797,612 ) (3,814,930 ) Net deferred tax assets $ - $ - |
Schedule of provision federal statutory rate | December 31, December 31, Statutory rate 21.00 % 21.00 % State rate 0.00 % 0.00 % Foreign (1.81 )% 0.00 % Permanent book/tax differences (0.26 )% (0.12 )% Research and development credit 5.09 % 3.99 % Changes in valuation allowance (24.02 )% (24.87 )% Total - - |
Schedule of unrecognized tax positions | Federal and State Balance at December 31, 2019 $ 157,814 Additions for tax positions related to current year 318,374 Decreases for tax positions related to prior years (81,830 ) Balance at December 31, 2020 $ 394,358 |
Organization And Description _2
Organization And Description Of Business (Details) - USD ($) | Aug. 13, 2020 | Oct. 31, 2019 | Jan. 24, 2018 |
Accounting Policies [Abstract] | |||
Exchange of common stock | 4,000,000 | ||
Stock issued | 3,048,654 | 4,400,000 | |
Share Price | $ 8.50 | $ 5 | |
Stock issued, value | $ 25,914,000 | $ 22,000,000 | |
Organization and description of business, description | the underwriter a 45-day option to purchase an additional 660,000 shares of common stock at the initial public offering price, less underwriting discounts and commissions. The option was exercised in November 2019 and the underwriter purchased an additional 479,300 shares of common stock and the Company received additional gross proceeds of approximately $2,397,000. | ||
Received net proceeds | $ 24,280,000 |
Liquidity and Management_s Pl_2
Liquidity and Management’s Plans (Details) | Dec. 31, 2020USD ($) |
Liquidity And Managements Plans [Abstract] | |
Cash and cash equivalents | $ 35,301,000 |
Working capital surplus | $ 36,237,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2020AUD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Maintenance of property and equipment | 100.00% | ||
Cash | $ 165,092 | $ 0 | $ 214,240 |
Deferred research grant revenue | $ | $ 24,315 | $ 0 | |
Basic weighted average shares outstanding (in Shares) | shares | 400,000 | ||
Aggregate exercise price (in Dollars per share) | $ 0.01 | ||
Conversion share price (in Dollars per share) | $ 2.50 | ||
Conversion price percentage | 50.00% | ||
IPO price (in Dollars per share) | $ 5 | ||
Beneficial conversion amount | $ | $ 23,930,000 | ||
Furniture and Fixtures [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful lives | 2 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful lives | 5 years | ||
Computer Equipment and Software [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful lives | 2 years | ||
Computer Equipment and Software [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful lives | 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Earnings per Common Share - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Earnings per Common Share [Line Items] | ||
Potential common stock equivalents outstanding | 3,027,850 | 3,215,541 |
Stock option [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Earnings per Common Share [Line Items] | ||
Potential common stock equivalents outstanding | 2,610,495 | 2,139,078 |
Warrants [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Earnings per Common Share [Line Items] | ||
Potential common stock equivalents outstanding | 417,355 | 1,076,463 |
Commitments And Contingencies_2
Commitments And Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expenses | The lease commenced on October 15, 2018, the Company exercised a one-year lease renewal in October 2019, and another one-year lease renewal in October 2020 that will expire on October 31, 2021. | |
Rent expenses | $ 36,000 | |
Short-term lease expense | $ 59,000 | $ 28,000 |
Commitments And Contingencies_3
Commitments And Contingencies (Details) - Schedule of future minimum lease payments | Dec. 31, 2020USD ($) |
Schedule of future minimum lease payments [Abstract] | |
2021 | $ 30,000 |
License and Agreements (Details
License and Agreements (Details) | 1 Months Ended | 12 Months Ended | |||||||||||||
Jan. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020AUD ($) | Dec. 31, 2019USD ($)shares | Aug. 31, 2020USD ($) | Aug. 31, 2020AUD ($) | May 31, 2020USD ($) | May 31, 2020AUD ($) | Jan. 31, 2020USD ($) | Jan. 31, 2020AUD ($) | Dec. 24, 2019$ / shares | Jun. 30, 2019USD ($) | Apr. 30, 2019USD ($) | May 31, 2018USD ($) | Mar. 31, 2018USD ($) | |
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 953,388 | $ 100,000 | |||||||||||||
Milestone fee | $ 50,000 | ||||||||||||||
Common shares outstanding price percentage | 1.00% | ||||||||||||||
Amount of common shares due payable (in Shares) | shares | 220,666 | ||||||||||||||
Fair value of common stock | $1,132,000 | ||||||||||||||
Closing stock price (in Dollars per share) | $ / shares | $ 5.13 | ||||||||||||||
Description of license and agreements | As of December 31, 2019, the Company had not paid the $50,000 or issued the shares and has included the $50,000 in accounts payable and the share amount due as a research and development expense payable. The Company paid the $50,000 and issued the shares in January 2020. | ||||||||||||||
Research and development expense | $ 1,132,000 | ||||||||||||||
Research and development expense | $ 1,824,000 | 977,000 | |||||||||||||
Pre-marketing approvals | 25,000,000 | ||||||||||||||
Master Services [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 4,582,000 | $ 1,790,000 | |||||||||||||
Agreement term, description | In January 2019, the Company cancelled all of the individual study contracts with ITR and entered into a contract with 11036114 Canada Inc. (initially dba VJO Non-Clinical Development and now dba Strategy Point Innovations (“SPI”)) to complete additional pre-clinical research and development services in order to take advantage of eligible Canadian Tax Credits. | ||||||||||||||
Research and development expense | 1,177,000 | 2,746,000 | |||||||||||||
Irisys, LLC [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 3,220,000 | ||||||||||||||
Research and development expense | 1,837,000 | 867,000 | |||||||||||||
CoreRx [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 1,103,000 | ||||||||||||||
Research and development expense | 839,000 | $ 290,000 | |||||||||||||
Conform Clinical Development, Inc. [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 1,484,000 | ||||||||||||||
Novotech (Australia) Pty Ltd [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 1,355,580 | $ 1,942,981 | |||||||||||||
Research and development expense | 407,000 | $ 590,000 | |||||||||||||
Nucleus Network Pty Ltd [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 1,392,805 | ||||||||||||||
Research and development expense | 337,000 | 489,000 | |||||||||||||
Q-Pharm Pty Ltd [Member] | |||||||||||||||
License and Agreements (Details) [Line Items] | |||||||||||||||
Assignment fee | $ 505,488 | $ 704,600 | |||||||||||||
Research and development expense | $ 384,000 | $ 557,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Aug. 13, 2020 | Aug. 10, 2020 | Nov. 30, 2020 | Oct. 31, 2019 | May 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 31, 2020 |
Stockholders' Equity (Details) [Line Items] | ||||||||
Purchase of common stock | 3,048,654 | 4,400,000 | ||||||
Research and development expense (in Dollars) | $ 1,132,000 | |||||||
Common stock issued | 22,534,874 | 18,450,992 | 220,666 | |||||
Sale of stock, price per share (in Dollars per share) | $ 5 | |||||||
Issuance of common stock for stock option exercises | 285,003 | 285,003 | ||||||
Stock option exercises total proceeds (in Dollars) | $ 714,382 | $ 714,382 | ||||||
Issuance of common stock | 529,559 | |||||||
Issuance of common stock warrant | 659,108 | |||||||
Preferred stock shares authorized | 10,000,000 | |||||||
Preferred stock shares issued | 8,930,000 | |||||||
Dividend rate | 6.00% | |||||||
Series A preferred stock dividend payable (in Dollars) | $ 875,359 | |||||||
Series A preferred stock conversion | Pursuant to the Company’s amended and restated certificate of incorporation, holders of the Series A Preferred Stock had the following methods of conversion: (i) automatic conversion into common stock upon the consummation of an IPO at a conversion price of 50% of the IPO price, (ii) automatic conversion into common stock upon the consummation of a subsequent private placement of securities at a conversion price of 50% of the purchase price of the securities being sold by the Company approved by the holders of the Series A preferred stock, and (iii) at any time after the issuance date and until ten calendar days prior to the consummation of an IPO, each holder shall be entitled to convert into common stock at a conversion price of $2.50 per share. | |||||||
Convertible preferred stock terms of conversion | The Series A Preferred Stock automatically converted into 9,571,692 common shares upon completion of the IPO in October 2019, based on the number of shares of Series A Preferred Stock outstanding as of the date of the IPO. The conversion share calculation was based on the $2.50 initial issue price for the Series A Preferred Stock plus $1,603,709 of accrued and unpaid dividends and automatically converted into shares of the Company’s common stock using a stated divisor conversion price equal to 50% of the IPO price to the public which was $5.00 per share. In accordance with relevant accounting literature, since the terms of the conversion option did not permit the Company to compute the additional number of shares that it would need to issue upon conversion of the Series A Preferred when the contingent event occurred, the Company recorded the beneficial conversion amount of approximately $23,930,000 as a deemed dividend at the date of the IPO. | |||||||
IPO [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Stockholders equity deficit, description | the Company completed an IPO, selling 4,400,000 shares of common stock at an offering price of $5.00 per share. The Company received gross proceeds of approximately $22,000,000. In addition, the Company granted the underwriter a 45-day option to purchase an additional 660,000 shares of common stock at the initial public offering price. The option was exercised and the underwriter purchased an additional 479,300 shares of common stock and the Company received additional gross proceeds of approximately $2,397,000. The Company received net proceeds from the IPO and the underwriter’s purchase of additional shares of approximately $21,754,000, after deducting underwriting discounts and commissions and offering-related expenses. Warrants for 317,155 shares of the Company’s common stock were issued to the IPO underwriter at an exercise price of $6.25 per share as part of the underwriter’s compensation for the IPO. The estimated fair value of the warrants of approximately $977,000 was considered an offering cost and netted against additional paid-in capital. | |||||||
Purchase of common stock | 627,984 | |||||||
Exercise price (in Dollars per share) | $ 5 | |||||||
2019 Private Placement [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Common stock issued | 3,048,654 | |||||||
Sale of stock, price per share (in Dollars per share) | $ 8.50 | |||||||
Gross proceeds (in Dollars) | $ 25,910,000 | |||||||
Net proceeds (in Dollars) | $ 24,280,000 | |||||||
Series A Preferred Stock [Member] | IPO [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Convertible preferred stock | 9,571,692 | |||||||
Series A Preferred Stock [Member] | 2019 Private Placement [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Sale of stock, price per share (in Dollars per share) | $ 2.50 | |||||||
Gross proceeds (in Dollars) | $ 8,200,000 | |||||||
Net proceeds (in Dollars) | $ 7,200,000 | |||||||
Preferred stock shares issued | 3,268,000 |
Warrants (Details)
Warrants (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Nov. 29, 2019 | Nov. 26, 2019 | Aug. 29, 2019 | May 23, 2019 | May 16, 2019 | Mar. 13, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2019 | Mar. 22, 2018 | |
Warrants (Details) [Line Items] | ||||||||||
Preferred stock, shares issued (in Shares) | 8,930,000 | |||||||||
Warrant to purchase shares of common stock (in Shares) | 53,679 | 53,679 | ||||||||
Research and development expense (in Dollars) | $ 1,132,000 | |||||||||
Warrant to purchase share of common stock, per share (in Dollars per share) | $ 0.01 | |||||||||
Warrant price per unit (in Dollars per share) | $ 5.26 | |||||||||
Aggregate intrinsic value (in Dollars) | $ 9,511,000 | |||||||||
National Securities Corporation Warrants [Member] | ||||||||||
Warrants (Details) [Line Items] | ||||||||||
Purchase of company's amount equal to common stock, percentage | 10.00% | |||||||||
Warrant to purchase shares of common stock (in Shares) | 326,800 | |||||||||
Common stock value, per share (in Dollars per share) | $ 1.67 | $ 1.67 | ||||||||
Contractual life | 5 years | 5 years | ||||||||
Dividend yield | 0.00% | 0.00% | ||||||||
Volatility | 89.60% | 89.60% | ||||||||
Risk-free interest rate | 2.11% | 2.11% | ||||||||
Research and development expense (in Dollars) | $ 347,000 | $ 347,000 | ||||||||
Warrant to purchase share of common stock, per share (in Dollars per share) | $ 6.25 | |||||||||
National Securities Corporation Warrants [Member] | IPO [Member] | ||||||||||
Warrants (Details) [Line Items] | ||||||||||
Warrant to purchase shares of common stock (in Shares) | 317,155 | |||||||||
Ten Year Warrant [Member] | ||||||||||
Warrants (Details) [Line Items] | ||||||||||
Warrant to purchase shares of common stock (in Shares) | 3,623 | 43,794 | ||||||||
Common stock value, per share (in Dollars per share) | $ 5.01 | |||||||||
Contractual life | 6 years | 6 years | ||||||||
Dividend yield | 0.00% | 0.00% | ||||||||
Volatility | 90.16% | 88.48% | ||||||||
Risk-free interest rate | 1.68% | 1.70% | ||||||||
Research and development expense (in Dollars) | $ 14,300 | $ 161,419 | ||||||||
Ten Year Warrant [Member] | BP Directors [Member] | ||||||||||
Warrants (Details) [Line Items] | ||||||||||
Warrant to purchase share of common stock, per share (in Dollars per share) | $ 5 | |||||||||
Series A Preferred Stock [Member] | National Securities Corporation Warrants [Member] | ||||||||||
Warrants (Details) [Line Items] | ||||||||||
Preferred stock, shares issued (in Shares) | 5,662,000 | |||||||||
BP Directors [Member] | Ten Year Warrant [Member] | ||||||||||
Warrants (Details) [Line Items] | ||||||||||
Warrant to purchase share of common stock, per share (in Dollars per share) | $ 5 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of warrant activity - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Warrants (Details) - Schedule of warrant activity [Line Items] | ||
Number of Shares, Outstanding, beginning (in Shares) | 1,476,463 | 1,058,212 |
Weighted-Average Exercise Prices, Outstanding, beginning | $ 2.71 | $ 1.56 |
Weighted-Average Remaining Life, Outstanding, beginning | 4 years 219 days | |
Number of Shares, Issued (in Shares) | 745,051 | |
Weighted-Average Exercise Prices, Issued | $ 4.26 | |
Number of Shares, Cancelled (in Shares) | (326,800) | |
Range of Exercise Prices, Cancelled | $ 2.50 | |
Weighted-Average Exercise Prices, Cancelled | $ 2.50 | |
Number of Shares, Exercised (in Shares) | (659,108) | |
Weighted-Average Exercise Prices, Exercised | $ 2.75 | |
Number of Shares, Outstanding, ending (in Shares) | 817,355 | 1,476,463 |
Weighted-Average Exercise Prices, Outstanding, ending | $ 2.68 | $ 2.71 |
Weighted-Average Remaining Life, Outstanding, ending | 3 years 255 days | 4 years 36 days |
Minimum [Member] | ||
Warrants (Details) - Schedule of warrant activity [Line Items] | ||
Range of Exercise Prices, Outstanding, beginning | $ 0.01 | $ 0.01 |
Range of Exercise Prices, Issued | 1.67 | |
Range of Exercise Prices, Exercised | 2.50 | |
Range of Exercise Prices, Outstanding, ending | 0.01 | 0.01 |
Maximum [Member] | ||
Warrants (Details) - Schedule of warrant activity [Line Items] | ||
Range of Exercise Prices, Outstanding, beginning | 6.25 | 2.50 |
Range of Exercise Prices, Issued | 6.25 | |
Range of Exercise Prices, Exercised | 6.25 | |
Range of Exercise Prices, Outstanding, ending | $ 6.25 | $ 6.25 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Jan. 31, 2018 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Stock based compensation, description | the Company’s board of directors approved its 2018 Stock Incentive Plan (“2018 Plan”). The 2018 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company initially reserved 1,630,000 shares of its common stock under the 2018 Plan; however, upon completion of the Company’s IPO the number of shares reserved for issuance under the 2018 Plan increased to 3,284,480, representing 15% of the Company’s outstanding shares of common stock calculated on a fully diluted basis upon the close of the IPO. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company will be eligible to receive incentive awards under the 2018 Plan. | |
Unrecognized compensation expense | $ 9,074,000 | |
Weighted-average period | 2 years 146 days |
Stock Based Compensation (Det_2
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and restricted stock - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and restricted stock [Line Items] | ||
Stock based compensation expenses | $ 2,187,149 | $ 590,041 |
Research and development [Member] | ||
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and restricted stock [Line Items] | ||
Stock based compensation expenses | 140,278 | |
General and administrative [Member] | ||
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and restricted stock [Line Items] | ||
Stock based compensation expenses | $ 2,046,871 | $ 590,041 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details) - Schedule of fair value of employee stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Based Compensation (Details) - Schedule of fair value of employee stock options [Line Items] | ||
Weighted average exercise price (in Dollars per share) | $ 10.42 | $ 4.42 |
Weighted average grant date fair value (in Dollars per share) | $ 9.25 | $ 3.08 |
Expected term (in years) | 6 years 109 days | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Stock Based Compensation (Details) - Schedule of fair value of employee stock options [Line Items] | ||
Expected volatility | 87.00% | 88.00% |
Expected term (in years) | 6 years 109 days | |
Risk-free interest rate | 0.36% | 1.68% |
Maximum [Member] | ||
Stock Based Compensation (Details) - Schedule of fair value of employee stock options [Line Items] | ||
Expected volatility | 91.00% | 90.00% |
Expected term (in years) | 10 years | |
Risk-free interest rate | 1.47% | 2.31% |
Stock Based Compensation (Det_4
Stock Based Compensation (Details) - Schedule of stock option activity - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of stock option activity [Abstract] | ||
Number of Shares, Outstanding, beginning balance shares | 2,139,078 | 1,073,082 |
Weighted-Average Exercise Prices, Outstanding, beginning balance (in Dollars per share) | $ 3.46 | $ 2.50 |
Weighted-Average Remaining Contractual Term, Outstanding beginning balance | 9 years 233 days | |
Aggregate Intrinsic Value, Outstanding beginning balance (in Dollars) | $ 4,052,512 | |
Number of Shares, Outstanding, Granted | 782,045 | 1,065,996 |
Weighted-Average Exercise Prices, Outstanding, Granted (in Dollars per share) | $ 10.42 | $ 4.42 |
Weighted-Average Remaining Contractual Term, Granted | ||
Aggregate Intrinsic Value, Granted (in Dollars) | ||
Number of Shares, Outstanding, Exercised | (285,003) | |
Weighted-Average Exercise Prices, Outstanding, Exercised (in Dollars per share) | $ 2.74 | |
Weighted-Average Remaining Contractual Term, Exercised | ||
Aggregate Intrinsic Value, Exercised (in Dollars) | ||
Number of Shares, Outstanding, Cancelled | (25,625) | |
Weighted-Average Exercise Prices, outstanding, Cancelled (in Dollars per share) | $ 4.86 | |
Weighted-Average Remaining Contractual term, Cancelled | ||
Aggregate Intrinsic Value, Cancelled (in Dollars) | ||
Number of Shares, Outstanding, Outstanding ending balance | 2,610,495 | 2,139,078 |
Weighted-Average Exercise Prices, Outstanding, Outstanding ending balance (in Dollars per share) | $ 5.63 | $ 3.46 |
Weighted-Average Remaining Contractual Term, Outstanding ending balance | 8 years 219 days | 9 years 62 days |
Aggregate Intrinsic Value, Outstanding ending balance (in Dollars) | $ 22,789,233 | $ 4,052,512 |
Number of Shares, Outstanding, Exercisable | 755,885 | |
Weighted-Average Exercise Prices, Outstanding, Exercisable (in Dollars per share) | $ 3.25 | |
Weighted-Average Remaining Contractual Term, Exercisable | 8 years 14 days | |
Aggregate Intrinsic Value, Exercisable | 8,365,946 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes (Details) [Line Items] | |||
Federal income tax net operating loss | $ 30,126,830 | $ 13,283,530 | |
Federal research tax credits | 1,486,704 | $ 690,525 | |
Foreign income tax net operating loss | $ 1,602,220 | ||
Federal tax credit expire | 2040 | ||
Taxable income for losses | 80.00% | 80.00% | |
Valuation allowance on deferred tax assets | 24.02% | 24.87% | |
Uncertain tax positions | $ 394,358 | ||
Effective Tax [Member] | |||
Income Taxes (Details) [Line Items] | |||
Valuation allowance on deferred tax assets | 100.00% | ||
Uncertain tax positions | $ 394,358 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income tax expense - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Federal | ||
State | ||
Foreign | ||
Total current | ||
Deferred: | ||
Federal | (4,502,016) | (2,952,519) |
State | ||
Foreign | (480,666) | |
Change in valuation allowance | 4,982,682 | 2,952,519 |
Total deferred | ||
Income tax provision (benefit) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 6,807,300 | $ 2,789,541 |
Research and development tax credit | 1,092,345 | 532,711 |
Intangibles | 136,226 | 105,580 |
Stock compensation | 761,741 | 387,098 |
Total deferred tax assets | 8,797,612 | 3,814,930 |
Valuation allowances | (8,797,612) | (3,814,930) |
Net deferred tax assets |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of provision federal statutory rate | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of provision federal statutory rate [Abstract] | ||
Statutory rate | 21.00% | 21.00% |
State rate | 0.00% | 0.00% |
Foreign | (1.81%) | 0.00% |
Permanent book/tax differences | (0.26%) | (0.12%) |
Research and development credit | 5.09% | 3.99% |
Changes in valuation allowance | (24.02%) | (24.87%) |
Total |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of unrecognized tax positions - Federal and State [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Taxes (Details) - Schedule of unrecognized tax positions [Line Items] | |
Balance at December 31, 2019 | $ 157,814 |
Additions for tax positions related to current year | 318,374 |
Decreases for tax positions related to prior years | (81,830) |
Balance at December 31, 2020 | $ 394,358 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 2 Months Ended |
Mar. 10, 2021USD ($)shares | |
Subsequent Events (Details) [Line Items] | |
Cash proceeds from the exercises (in Dollars) | $ | $ 585,700 |
Stock Options [Member] | |
Subsequent Events (Details) [Line Items] | |
Common stock issued | 160,275 |
Warrant [Member] | |
Subsequent Events (Details) [Line Items] | |
Common stock issued | 444,751 |