Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 11, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | TFF PHARMACEUTICALS, Inc. | |
Trading Symbol | TFFP | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 36,253,174 | |
Amendment Flag | false | |
Entity Central Index Key | 0001733413 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39102 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4344737 | |
Entity Address, Address Line One | 1751 River Run | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76107 | |
City Area Code | (817) | |
Local Phone Number | 438-6168 | |
Title of 12(b) Security | Common stock: Par value $0.001 | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 7,662,968 | $ 16,612,315 |
Research and development tax incentive receivable | 284,169 | 186,507 |
Prepaid assets and other current assets | 1,468,431 | 2,226,344 |
Total current assets | 9,415,568 | 19,025,166 |
Operating lease right-of-use asset, net | 158,541 | 196,044 |
Property and equipment, net | 2,157,512 | 3,078,342 |
Note receivable - Augmenta | 1,830,000 | 1,812,975 |
Other assets | 7,688 | 7,688 |
Total assets | 13,569,309 | 24,120,215 |
Current liabilities: | ||
Accounts payable | 1,007,001 | 919,607 |
Accrued compensation | 4,430 | |
Deferred research grant revenue | 126,000 | 126,000 |
Current portion of operating lease liability | 81,938 | 80,625 |
Total current liabilities | 1,214,939 | 1,130,662 |
Operating lease liability, net of current portion | 72,328 | 110,094 |
Total liabilities | 1,287,267 | 1,240,756 |
Commitments and contingencies (see Note 4) | ||
Stockholders’ equity: | ||
Common stock; $0.001 par value, 90,000,000 shares and 45,000,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively; 36,193,085 shares issued and outstanding | 36,193 | 36,193 |
Additional paid-in capital | 121,571,374 | 120,070,983 |
Accumulated other comprehensive loss | (165,530) | (139,295) |
Accumulated deficit | (109,159,995) | (97,088,422) |
Total stockholders’ equity | 12,282,042 | 22,879,459 |
Total liabilities and stockholders’ equity | $ 13,569,309 | $ 24,120,215 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 45,000,000 |
Common stock, shares issued | 36,193,085 | 36,193,085 |
Common stock, shares outstanding | 36,193,085 | 36,193,085 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Grant revenue | $ 333,351 | $ 28,004 | $ 384,780 | $ 95,439 |
Operating expenses: | ||||
Research and development | 2,681,898 | 5,102,090 | 6,700,557 | 10,339,514 |
General and administrative | 2,670,363 | 3,678,119 | 5,789,579 | 6,891,317 |
Total operating expenses | 5,352,261 | 8,780,209 | 12,490,136 | 17,230,831 |
Loss from operations | (5,018,910) | (8,752,205) | (12,105,356) | (17,135,392) |
Other income (expense): | ||||
Interest income | 36,120 | 5,880 | 71,199 | 13,065 |
Change in fair value of note receivable | (37,416) | (37,416) | ||
Total other income (expense), net | (1,296) | 5,880 | 33,783 | 13,065 |
Net loss | $ (5,020,206) | $ (8,746,325) | $ (12,071,573) | $ (17,122,327) |
Net loss per share, basic (in Dollars per share) | $ (0.14) | $ (0.34) | $ (0.33) | $ (0.67) |
Weighted average common shares outstanding, basic (in Shares) | 36,193,085 | 25,373,706 | 36,193,085 | 25,372,749 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (5,020,206) | $ (8,746,325) | $ (12,071,573) | $ (17,122,327) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (7,566) | (105,434) | (26,235) | (58,200) |
Comprehensive loss | $ (5,027,772) | $ (8,851,759) | $ (12,097,808) | $ (17,180,527) |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net loss per share, diluted | $ (0.14) | $ (0.34) | $ (0.33) | $ (0.67) |
Weighted average common shares outstanding, diluted | 36,193,085 | 25,373,706 | 36,193,085 | 25,372,749 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 25,372 | $ 104,078,968 | $ (48,921) | $ (65,318,360) | $ 38,737,059 |
Balance (in Shares) at Dec. 31, 2021 | 25,371,781 | ||||
Stock-based compensation | 1,177,702 | 1,177,702 | |||
Foreign currency translation adjustment | 47,234 | 47,234 | |||
Net loss | (8,376,002) | (8,376,002) | |||
Balance at Mar. 31, 2022 | $ 25,372 | 105,256,670 | (1,687) | (73,694,362) | 31,585,993 |
Balance (in Shares) at Mar. 31, 2022 | 25,371,781 | ||||
Stock-based compensation | 1,195,081 | 1,195,081 | |||
Foreign currency translation adjustment | (105,434) | (105,434) | |||
Net loss | (8,746,325) | (8,746,325) | |||
Balance at Jun. 30, 2022 | $ 25,374 | 106,461,934 | (107,121) | (82,440,687) | 23,939,500 |
Balance (in Shares) at Jun. 30, 2022 | 25,373,818 | ||||
Issuance of common stock for stock option exercises | $ 2 | 10,183 | 10,185 | ||
Issuance of common stock for stock option exercises (in Shares) | 2,037 | ||||
Balance at Dec. 31, 2022 | $ 36,193 | 120,070,983 | (139,295) | (97,088,422) | 22,879,459 |
Balance (in Shares) at Dec. 31, 2022 | 36,193,085 | ||||
Stock-based compensation | 751,821 | 751,821 | |||
Costs related to ATM | (17,920) | (17,920) | |||
Foreign currency translation adjustment | (18,669) | (18,669) | |||
Net loss | (7,051,367) | (7,051,367) | |||
Balance at Mar. 31, 2023 | $ 36,193 | 120,804,884 | (157,964) | (104,139,789) | 16,543,324 |
Balance (in Shares) at Mar. 31, 2023 | 36,193,085 | ||||
Stock-based compensation | 825,719 | 825,719 | |||
Costs related to ATM | (59,229) | (59,229) | |||
Foreign currency translation adjustment | (7,566) | (7,566) | |||
Net loss | (5,020,206) | (5,020,206) | |||
Balance at Jun. 30, 2023 | $ 36,193 | $ 121,571,374 | $ (165,530) | $ (109,159,995) | $ 12,282,042 |
Balance (in Shares) at Jun. 30, 2023 | 36,193,085 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (12,071,573) | $ (17,122,327) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 1,577,540 | 2,372,783 |
Interest accrued on note receivable | (54,441) | |
Change in fair value of note receivable | 37,416 | |
Write-off of construction-in-process | 747,348 | |
Depreciation and amortization | 246,695 | 166,174 |
Changes in operating assets and liabilities: | ||
Receivable due from collaboration agreement | (184,272) | |
Research and development tax incentive receivable | (122,269) | (78,257) |
Prepaid assets and other current assets | 767,746 | 939,995 |
Accounts payable | 88,507 | 1,856,851 |
Accrued compensation | (4,430) | (416,910) |
Deferred revenue | 218,000 | |
Operating lease obligation | (36,453) | (12,783) |
Net cash used in operating activities | (8,823,914) | (12,260,746) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (35,709) | (632,684) |
Net cash used in investing activities | (35,709) | (632,684) |
Cash flows from financing activities: | ||
Payment of offering costs in connection with ATM | (77,149) | (26,180) |
Proceeds from issuance of common stock for stock option exercises | 10,185 | |
Net cash used in financing activities | (77,149) | (15,995) |
Effect of exchange rate changes on cash and cash equivalents | (12,575) | 5,006 |
Net change in cash and cash equivalents | (8,949,347) | (12,904,419) |
Cash and cash equivalents at beginning of period | 16,612,315 | 33,794,672 |
Cash and cash equivalents at end of period | 7,662,968 | 20,890,253 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of equipment included in accounts payable | 133,209 | |
ROU asset obtained for new operating lease | $ 238,021 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2023 | |
Organization and Description of Business [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. 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 and the human clinical trials of its initial product candidates. |
Going Concern and Management_s
Going Concern and Management’s Plans | 6 Months Ended |
Jun. 30, 2023 | |
Going Concern and Management’s Plans [Abstract] | |
GOING CONCERN AND MANAGEMENT’S PLANS | NOTE 2 - GOING CONCERN AND MANAGEMENT’S PLANS The accompanying condensed consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. For the six months ended June 30, 2023 and 2022, the Company reported a net loss of $12.1 million and $17.1 million, respectively, and negative cash from operations of $8.8 million and $12.3 million, respectively. As of June 30, 2023, the Company had cash and cash equivalents of approximately $7.7 million, a working capital surplus of approximately $8.2 million and an accumulated deficit of $109.2 million. The Company has not generated revenues from commercial operations since inception and expects to continue incurring losses for the foreseeable future and needs to raise additional capital to continue the pursuit of its product development. Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources, is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through at least the next twelve months from the date of this filing. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2023 and the results of operations, changes in stockholders’ equity and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Reclassification Certain prior period amounts have been reclassified to conform to the current period classification. Amounts received from the United States Internal Revenue Service (“IRS”) for payroll tax credits have been reclassified from other income to operating expenses in the condensed consolidated statements of operations to net the amounts with the related expense that was incurred with no changes in the previously reported net losses. 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. Fair Value Option - Convertible Note Receivable The guidance in Accounting Standards Codification (“ASC”) 825, Financial Instruments The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Pursuant to this guidance, assets and liabilities are measured at fair value based, in part, on general economic and stock market conditions and those characteristics specific to the underlying investments. The carrying value is adjusted to estimated fair value at the end of each quarter, required to be reported separately in our condensed consolidated balance sheets from those instruments using another accounting method. Fair Value of Financial Instruments Authoritative guidance requires disclosure of the fair value of financial instruments. 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. Revenue Recognition Feasibility Agreements The Company has entered into feasibility and material transfer agreements (“Feasibility Agreements”) with third parties that provide the Company with funds in return for certain research and development activities. Revenue from the Feasibility Agreements is recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable conditions under the Feasibility Agreements have been met. The Feasibility Agreements are on a best-effort basis and do not require scientific achievement as a performance obligation. All fees received under the Feasibility Agreements are non-refundable. The costs associated with the Feasibility Agreements are expensed as incurred and are reflected as a component of research and development expense in the accompanying consolidated statements of operations. Funds received from the Feasibility Agreements are recorded as revenue as the Company is the principal participant in the arrangement because the activities under the Feasibility Agreements 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. Grants The Company accounts for grants awarded from a government-sponsored entity for research and development related activities that provide for payments for reimbursed costs, which includes overhead and general and administrative costs, as well as an administrative fee. The Company recognizes revenue from grants as it performs services under the arrangements. Associated expenses are recognized when incurred as research and development expense. Revenue and related expenses are presented gross in the consolidated statements of operations. Research and Development Tax Incentive The Company is eligible to obtain a cash refund from the Australian Taxation Office for eligible research and development expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Company recognizes the Australian Tax Incentive when there is reasonable assurance that the cash refund will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. As the Company has determined that it has reasonable assurance that it will receive the cash refund for eligible research and development expenditures, the Company records the Australian Tax Incentive as a reduction to research and development expenses as the Australian Tax Incentive is not dependent on the Company generating future taxable income, the Company’s ongoing tax status, or tax position. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. This percentage of eligible research and development expenses reimbursable under the Australian Tax Incentive is 43.5% for the periods ended June 30, 2023 and 2022. In addition, the Company is also eligible to receive amounts from the United States Internal Revenue Service (“IRS”) related to research and development tax credits for expenditures. The research and development incentive receivable represents amounts due in connection with the Australian Tax Incentive and from the IRS. The Company has recorded a research and development tax incentive receivable of $284,169 and $186,507 as of June 30, 2023 and December 31, 2022, respectively, in the condensed consolidated balance sheets. The Company recorded a reduction to research and development expenses of $96,560 and $122,269 during the three and six months ended June 30, 2023, respectively. The Company recorded an increase to research and development expenses as a result of exchange rate changes and adjustments to the estimated amount to be received of $28,834 during the three months ended June 30, 2022 and a reduction to research and development expenses of $144,667 during the six months ended June 30, 2022. 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. For the six months ended June 30, 2023 and 2022, 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: For The Six Months Ended 2023 2022 Stock Options 5,283,289 2,996,553 Warrants 5,747,792 414,233 11,031,081 3,410,786 * On an as-converted basis Use of Estimates The preparation of condensed 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 the convertible note receivable, stock-based compensation and warrants and the valuation allowance against deferred tax assets and related disclosures. Actual results could differ from those estimates. Risks and Uncertainties The Company’s business may be adversely affected by the continuing fallout from the COVID-19 pandemic. While the COVID-19 pandemic has abated in the last several months, many of the consequences of the COVID-19 pandemic continue to cause disruption and increased costs for businesses. In the case of clinical stage biopharmaceutical companies, the Company believes there continue to be, among other things, supply chain disruptions that are causing delays in the delivery of drug candidates and comparator products and healthcare staffing shortages that are causing delays in the establishment of test sites and the conduct of clinical trials. Potential impacts to the Company’s business include, but are not limited to, temporary closures of facilities of its vendors, disruptions or restrictions on its employees’ ability to travel, disruptions to or delays in ongoing laboratory experiments, preclinical studies, clinical trials, third-party manufacturing supply and other operations, the supply of comparator products, the potential diversion of healthcare resources and staff away from the conduct of clinical trials to focus on pandemic concerns, interruptions or delays in the operations of the U.S. Food and Drug Administration or other regulatory authorities, and the Company’s ability to raise capital and conduct business development activities. During 2020, the Company experienced a temporary suspension of dosing in the Phase I clinical trial for TFF TAC due to the COVID-19 pandemic and the pandemic has otherwise caused minor slowing in the timing of certain non-clinical and clinical activities by the Company and its collaborators and service providers during 2020 to date. However, the COVID-19 pandemic has not caused the Company to forego, abandon or materially delay any proposed activities. While the Company believes it has been able to effectively manage the disruption caused by the COVID-19 pandemic to date, there can be no assurance that its operations, including the development of its drug candidates, will not be disrupted or materially adversely affected in the future by the COVID-19 pandemic or an epidemic or outbreak of an infectious disease like the outbreak of COVID-19. In February 2022, Russia commenced a military invasion of Ukraine causing ongoing geopolitical turmoil, including continuing military action in the region and sanctions imposed on Russia. These and other events have caused and may continue to cause significant disruption, instability and volatility in the global economy and financial markets, resulting in inflation, rising interest rates, tightening of credit markets and bank failures, the actual or anticipated occurrence of which may have an adverse impact on the Company’s business or ability to access capital markets in the future. On March 2, 2023, the Company received a notice of delisting from the Nasdaq Stock Market, LLC. The notice stated that the Company had fallen below compliance with respect to the continued listing standard set forth in Rule 5450(a)(1) of the Nasdaq Listing Rules because the closing bid price of our common stock over the previous 30 consecutive trading-day period had fallen below $1.00 per share. Pursuant to the notice and Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, the Company has 180 days from the date of the notice, or until August 29, 2023, to regain compliance with the minimum bid price requirement in Rule 5450(a)(1) by achieving a closing bid price for its common stock of at least $1.00 per share over a minimum of 10 consecutive business days. If the Company does not regain compliance with Rule 5450(a)(1) during the initial 180-day period, it may be eligible for additional time to regain compliance, subject to its transfer to the Nasdaq Capital Market and compliance with the Nasdaq’s continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and our provision of certain undertakings to the Nasdaq. However, there can be no assurance that the Company will be afforded additional time to regain compliance with the minimum bid price requirement following the initial 180-day period. If the Company is unable to regain compliance with Nasdaq Listing Rule 5450(a)(2) in a timely manner, the Nasdaq will commence suspension and delisting procedures. Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging -Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity In June 2016, the FASB issued ASU 2016-13, Fin ancial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the consolidated financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
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 and expires on October 31, 2023, as amended. The lease has an additional one-year option for renewal, and the base rent is $37,080 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. In May 2022, the Company entered into a lease agreement for lab space in Austin, Texas. The lease commenced on June 1, 2022 and expires on May 31, 2025. The lease has an additional three-year option for renewal, which the Company has determined it is not reasonably certain to exercise. Supplemental balance sheet information related to leases was as follows: June 30, Operating leases: Operating lease right-of-use assets $ 158,541 Operating lease liability - current portion $ 81,938 Operating lease liability - long-term portion 72,328 Total operating lease liabilities $ 154,266 Supplemental lease expense related to leases was as follows: Statement of Operations For The Three Months Ended June 30, For The Six Months Ended June 30, Lease Classification 2023 2022 2023 2022 Operating lease cost Research and development $ 22,275 $ 7,425 $ 44,550 $ 7,425 Short-term lease cost Research and development - 6,244 - 12,489 Short-term lease cost General and administrative 21,570 20,900 43,340 41,600 Total lease expense $ 43,845 $ 34,569 $ 87,890 $ 61,514 Other information related to operating leases: June 30, Weighted-average remaining lease term 1.9 years Weighted-average discount rate 8 % Supplemental cash flow information related to operating leases was as follows: For The Six Months Ended 2023 2022 Cash paid for operating lease liabilities $ 43,500 $ 12,783 Approximate future minimum lease payments under non-cancellable leases (including short-term leases) are as follows: Fiscal Year Ending December 31, 2023 (Remaining) $ 50,000 2024 91,000 2025 38,000 Total minimum lease payments 179,000 Less: Imputed interest (12,000 ) Total $ 167,000 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. |
Convertible Note Receivable _ A
Convertible Note Receivable – Augmenta | 6 Months Ended |
Jun. 30, 2023 | |
Convertible Note Receivable [Abstract] | |
CONVERTIBLE NOTE RECEIVABLE – AUGMENTA | NOTE 5 - CONVERTIBLE NOTE RECEIVABLE - AUGMENTA Effective January 1, 2023, the Company and Augmenta Bioworks, Inc. (“Augmenta”) entered into a convertible note purchase agreement (“Augmenta Note”) pursuant to which a receivable due from Augmenta in connection with a joint development agreement was converted into the Augmenta Note. Under the terms of the Augmenta Note, Augmenta agreed to pay the principal amount of $1,812,975 to the Company. The Augmenta Note accrues interest at a rate of 6% per annum and has a maturity date of the earlier of (i) January 1, 2026 (“Maturity Date”), or (ii) upon the occurrence and during the continuance of an event of default. Accrued interest shall be payable at maturity. The Company has the following optional conversion rights under the Augmenta Note: ● The Company may convert, at any time and at its option, all outstanding principal and accrued and unpaid interest into shares of Augmenta common stock at a price per share equal to an amount obtained by dividing $15,000,000 by the number of outstanding shares of Augmenta common stock on a fully diluted basis (“Conversion Price”). ● If Augmenta completes a private placement sale of its preferred stock in the amount less than $15,000,000, the Company may convert, at its option, all outstanding principal and accrued and unpaid interest into shares of the same security in such financing at a per share price equal to the lower of the Conversion Price or the price per share sold in the financing. In addition, the outstanding principal and accrued and unpaid interest under the Augmenta Note will automatically convert in the following scenarios: ● If Augmenta completes a financing with gross proceeds of at least $15,000,000 (“Qualified Financing”) on or before the Maturity Date, then the outstanding principal and accrued and unpaid interest shall automatically convert into the same security at a price per share equal to the lower of the Conversion Price or the price per share sold in the Qualified Financing. ● If Augmenta completes an underwritten public offering with gross proceeds of at least $35,000,000 (“Qualified IPO”) on or before the Maturity Date, then the outstanding principal and accrued and unpaid interest shall automatically convert into the same security at a price per share equal to the lower of the Conversion Price or the price per share sold in the Qualified IPO. ● If a change of control occurs prior to the payment in full of the principal amount of the Augmenta Note, then the Company will be paid all outstanding principal and accrued and unpaid interest, plus a premium of 100% of the outstanding principal. The Company has elected to measure the Augmenta Note at fair value in accordance with ASC 825 (see Note 6). |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value of Financial Assets and Liabilities [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | NOTE 6 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The carrying value of cash and cash equivalents, accounts payable and accrued liabilities approximate fair value because of their short-term nature. The Augmenta Note is held at fair value. The following table presents the Company’s assets and liabilities that are measured at fair value as of June 30, 2023: Fair value measured as of June 30, 2023 Quoted Significant Significant Total (Level 1) (Level 2) (Level 3) Assets Augmenta Note at fair value $ 1,830,000 $ - $ - $ 1,830,000 Level 3 Measurement The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis: Fair Value of Level 3 Beginning balance, January 1, 2023 $ 1,812,975 Accrued interest receivable 54,441 Change in fair value (37,416 ) Ending balance, June 30, 2023 $ 1,830,000 The fair value of the Augmenta Note is measured using Level 3 (unobservable) inputs. The Company determined the fair value for the Augmenta Note using a probability weighted-scenario valuation model with the assistance of a third-party valuation specialist. The unobservable inputs include estimates of the equity value of Augmenta and the timing and probability of future financing events, optional conversion to common stock, and repayment at maturity. The conversion upon a qualified financing scenario valued the Augmenta Note based on a bond plus call option model. The optional conversion to common stock valued the Augmenta Note based on the present value of common stock, determined using an adjusted net assets method and option-pricing model, and implied number of common shares upon conversion. The repayment upon maturity is based on the total principal and accrued interest through the maturity date. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | NOTE 7 - 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. In September 2021, the Company’s board of directors approved its 2021 Stock Incentive Plan (“2021 Plan”), which was also approved by the stockholders of the Company at the Company’s annual meeting of stockholders held on November 4, 2021. The 2021 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 has 4,200,000 shares of its common stock reserved under the 2021 Plan. 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 2021 Plan. The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and six months ended June 30, 2023 and 2022 for stock options and warrants: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 261,239 $ 244,276 $ 505,114 $ 450,085 General and administrative 564,480 950,805 1,072,426 1,922,698 $ 825,719 $ 1,195,081 $ 1,577,540 $ 2,372,783 As of June 30, 2023, there was approximately $5,557,000 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 1.8 years. The Company records compensation expense for awards with graded vesting using the straight-line 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 stock options using the Black-Scholes option pricing model. The fair value of 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: For The Six Months Weighted average exercise price $ 1.08 Weighted average grant date fair value $ 0.71 Assumptions Expected volatility 92%-96 % Expected term (in years) 6.3 – 10.0 Risk-free interest rate 3.44%-3.79 % Expected dividend yield 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. 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 six months ended June 30, 2023: Number of Weighted- Weighted- Intrinsic Outstanding at January 1, 2023 2,909,057 $ 5.96 7.46 $ 24,279 Granted 2,689,950 1.08 - - Cancelled (315,718 ) 7.34 - - Outstanding at June 30, 2023 5,283,289 $ 3.39 8.28 $ - Exercisable at June 30, 2023 2,017,173 $ 4.82 6.74 $ - The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had strike prices lower than the fair value of the Company’s common stock. |
Sbir Grant
Sbir Grant | 6 Months Ended |
Jun. 30, 2023 | |
Sbir Grant [Abstract] | |
SBIR GRANT | NOTE 8 - SBIR GRANT On June 23, 2023, the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, awarded the Company a Direct to Phase II Small Business Innovation Research (“SBIR”) grant of approximately $2.84 million to continue development of a novel, pan-flu multivariant mucosal vaccine using the Company’s Thin Film Freezing technology. The purpose of the SBIR grant is to provide funding to support preclinical and IND enabling studies to advance the development of a shelf-stable dry powder formulation of a novel universal influenza virus vaccine, developed in the laboratory of Dr. Ted Ross at the Cleveland Clinic (previously of University of Georgia). Funding from the SBIR grant is expected to take place over three years. Revenue from the SBIR grant 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 SBIR grant have been met. The costs associated with the SBIR grant will be expensed as incurred and will be reflected as a component of research and development expense in the accompanying condensed consolidated statements of operations. Funds received from the SBIR grant will be recorded as revenue as the Company is the principal participant in the arrangement because the activities under the SBIR grant 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 will classify 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 will record a grant receivable. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 - SUBSEQUENT EVENTS On July 14, 2023, the Company and UNION therapeutics A/S agreed to terminate the Research Collaboration and License Agreement dated August 12, 2020 entered into by the parties with regard to their proposed collaboration on the development and commercialization of certain Niclosamide-based drug products. Pursuant to the termination agreement, the Company has received back in full all rights previously granted to UNION with regard to a dry powder version of Niclosamide utilizing the Company’s TFF platform. The Company is presently evaluating its further development of a TFF dry powder version of Niclosamide. On August 14, 2023, the Company announced that it intends to offer and sell shares of its common stock in an underwritten public offering. All of the shares of common stock in the underwritten public offering are to be sold by the Company. The Company also expects to grant the underwriter a 30-day option to purchase additional shares of common stock offered in the public offering. The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2023 and the results of operations, changes in stockholders’ equity and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period classification. Amounts received from the United States Internal Revenue Service (“IRS”) for payroll tax credits have been reclassified from other income to operating expenses in the condensed consolidated statements of operations to net the amounts with the related expense that was incurred with no changes in the previously reported net losses. |
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. |
Fair Value Option - Convertible Note Receivable | Fair Value Option - Convertible Note Receivable The guidance in Accounting Standards Codification (“ASC”) 825, Financial Instruments The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Pursuant to this guidance, assets and liabilities are measured at fair value based, in part, on general economic and stock market conditions and those characteristics specific to the underlying investments. The carrying value is adjusted to estimated fair value at the end of each quarter, required to be reported separately in our condensed consolidated balance sheets from those instruments using another accounting method. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Authoritative guidance requires disclosure of the fair value of financial instruments. 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. |
Revenue Recognition | Revenue Recognition Feasibility Agreements The Company has entered into feasibility and material transfer agreements (“Feasibility Agreements”) with third parties that provide the Company with funds in return for certain research and development activities. Revenue from the Feasibility Agreements is recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable conditions under the Feasibility Agreements have been met. The Feasibility Agreements are on a best-effort basis and do not require scientific achievement as a performance obligation. All fees received under the Feasibility Agreements are non-refundable. The costs associated with the Feasibility Agreements are expensed as incurred and are reflected as a component of research and development expense in the accompanying consolidated statements of operations. Funds received from the Feasibility Agreements are recorded as revenue as the Company is the principal participant in the arrangement because the activities under the Feasibility Agreements 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. Grants The Company accounts for grants awarded from a government-sponsored entity for research and development related activities that provide for payments for reimbursed costs, which includes overhead and general and administrative costs, as well as an administrative fee. The Company recognizes revenue from grants as it performs services under the arrangements. Associated expenses are recognized when incurred as research and development expense. Revenue and related expenses are presented gross in the consolidated statements of operations. |
Research and Development Tax Incentive | Research and Development Tax Incentive The Company is eligible to obtain a cash refund from the Australian Taxation Office for eligible research and development expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Company recognizes the Australian Tax Incentive when there is reasonable assurance that the cash refund will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. As the Company has determined that it has reasonable assurance that it will receive the cash refund for eligible research and development expenditures, the Company records the Australian Tax Incentive as a reduction to research and development expenses as the Australian Tax Incentive is not dependent on the Company generating future taxable income, the Company’s ongoing tax status, or tax position. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. This percentage of eligible research and development expenses reimbursable under the Australian Tax Incentive is 43.5% for the periods ended June 30, 2023 and 2022. In addition, the Company is also eligible to receive amounts from the United States Internal Revenue Service (“IRS”) related to research and development tax credits for expenditures. The research and development incentive receivable represents amounts due in connection with the Australian Tax Incentive and from the IRS. The Company has recorded a research and development tax incentive receivable of $284,169 and $186,507 as of June 30, 2023 and December 31, 2022, respectively, in the condensed consolidated balance sheets. The Company recorded a reduction to research and development expenses of $96,560 and $122,269 during the three and six months ended June 30, 2023, respectively. The Company recorded an increase to research and development expenses as a result of exchange rate changes and adjustments to the estimated amount to be received of $28,834 during the three months ended June 30, 2022 and a reduction to research and development expenses of $144,667 during the six months ended June 30, 2022. |
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. For the six months ended June 30, 2023 and 2022, 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: For The Six Months Ended 2023 2022 Stock Options 5,283,289 2,996,553 Warrants 5,747,792 414,233 11,031,081 3,410,786 * On an as-converted basis |
Use of Estimates | Use of Estimates The preparation of condensed 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 the convertible note receivable, stock-based compensation and warrants and the valuation allowance against deferred tax assets and related disclosures. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company’s business may be adversely affected by the continuing fallout from the COVID-19 pandemic. While the COVID-19 pandemic has abated in the last several months, many of the consequences of the COVID-19 pandemic continue to cause disruption and increased costs for businesses. In the case of clinical stage biopharmaceutical companies, the Company believes there continue to be, among other things, supply chain disruptions that are causing delays in the delivery of drug candidates and comparator products and healthcare staffing shortages that are causing delays in the establishment of test sites and the conduct of clinical trials. Potential impacts to the Company’s business include, but are not limited to, temporary closures of facilities of its vendors, disruptions or restrictions on its employees’ ability to travel, disruptions to or delays in ongoing laboratory experiments, preclinical studies, clinical trials, third-party manufacturing supply and other operations, the supply of comparator products, the potential diversion of healthcare resources and staff away from the conduct of clinical trials to focus on pandemic concerns, interruptions or delays in the operations of the U.S. Food and Drug Administration or other regulatory authorities, and the Company’s ability to raise capital and conduct business development activities. During 2020, the Company experienced a temporary suspension of dosing in the Phase I clinical trial for TFF TAC due to the COVID-19 pandemic and the pandemic has otherwise caused minor slowing in the timing of certain non-clinical and clinical activities by the Company and its collaborators and service providers during 2020 to date. However, the COVID-19 pandemic has not caused the Company to forego, abandon or materially delay any proposed activities. While the Company believes it has been able to effectively manage the disruption caused by the COVID-19 pandemic to date, there can be no assurance that its operations, including the development of its drug candidates, will not be disrupted or materially adversely affected in the future by the COVID-19 pandemic or an epidemic or outbreak of an infectious disease like the outbreak of COVID-19. In February 2022, Russia commenced a military invasion of Ukraine causing ongoing geopolitical turmoil, including continuing military action in the region and sanctions imposed on Russia. These and other events have caused and may continue to cause significant disruption, instability and volatility in the global economy and financial markets, resulting in inflation, rising interest rates, tightening of credit markets and bank failures, the actual or anticipated occurrence of which may have an adverse impact on the Company’s business or ability to access capital markets in the future. On March 2, 2023, the Company received a notice of delisting from the Nasdaq Stock Market, LLC. The notice stated that the Company had fallen below compliance with respect to the continued listing standard set forth in Rule 5450(a)(1) of the Nasdaq Listing Rules because the closing bid price of our common stock over the previous 30 consecutive trading-day period had fallen below $1.00 per share. Pursuant to the notice and Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, the Company has 180 days from the date of the notice, or until August 29, 2023, to regain compliance with the minimum bid price requirement in Rule 5450(a)(1) by achieving a closing bid price for its common stock of at least $1.00 per share over a minimum of 10 consecutive business days. If the Company does not regain compliance with Rule 5450(a)(1) during the initial 180-day period, it may be eligible for additional time to regain compliance, subject to its transfer to the Nasdaq Capital Market and compliance with the Nasdaq’s continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and our provision of certain undertakings to the Nasdaq. However, there can be no assurance that the Company will be afforded additional time to regain compliance with the minimum bid price requirement following the initial 180-day period. If the Company is unable to regain compliance with Nasdaq Listing Rule 5450(a)(2) in a timely manner, the Nasdaq will commence suspension and delisting procedures. |
Recent Accounting Standards | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging -Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity In June 2016, the FASB issued ASU 2016-13, Fin ancial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of potential common stock equivalents outstanding | For the six months ended June 30, 2023 and 2022, 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: For The Six Months Ended 2023 2022 Stock Options 5,283,289 2,996,553 Warrants 5,747,792 414,233 11,031,081 3,410,786 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases was as follows: June 30, Operating leases: Operating lease right-of-use assets $ 158,541 Operating lease liability - current portion $ 81,938 Operating lease liability - long-term portion 72,328 Total operating lease liabilities $ 154,266 |
Schedule of supplemental lease expense related to leases | Supplemental lease expense related to leases was as follows: Statement of Operations For The Three Months Ended June 30, For The Six Months Ended June 30, Lease Classification 2023 2022 2023 2022 Operating lease cost Research and development $ 22,275 $ 7,425 $ 44,550 $ 7,425 Short-term lease cost Research and development - 6,244 - 12,489 Short-term lease cost General and administrative 21,570 20,900 43,340 41,600 Total lease expense $ 43,845 $ 34,569 $ 87,890 $ 61,514 |
Schedule of other information related to operating leases | Other information related to operating leases: June 30, Weighted-average remaining lease term 1.9 years Weighted-average discount rate 8 % |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases was as follows: For The Six Months Ended 2023 2022 Cash paid for operating lease liabilities $ 43,500 $ 12,783 |
Schedule of future minimum lease payments under non-cancellable leases | Approximate future minimum lease payments under non-cancellable leases (including short-term leases) are as follows: Fiscal Year Ending December 31, 2023 (Remaining) $ 50,000 2024 91,000 2025 38,000 Total minimum lease payments 179,000 Less: Imputed interest (12,000 ) Total $ 167,000 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value of Financial Assets and Liabilities [Abstract] | |
Schedule of company’s assets and liabilities that are measured at fair value | The following table presents the Company’s assets and liabilities that are measured at fair value as of June 30, 2023: Fair value measured as of June 30, 2023 Quoted Significant Significant Total (Level 1) (Level 2) (Level 3) Assets Augmenta Note at fair value $ 1,830,000 $ - $ - $ 1,830,000 |
Schedule of fair value of the company’s Level 3 financial assets | The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis: Fair Value of Level 3 Beginning balance, January 1, 2023 $ 1,812,975 Accrued interest receivable 54,441 Change in fair value (37,416 ) Ending balance, June 30, 2023 $ 1,830,000 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and six months ended June 30, 2023 and 2022 for stock options and warrants: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 261,239 $ 244,276 $ 505,114 $ 450,085 General and administrative 564,480 950,805 1,072,426 1,922,698 $ 825,719 $ 1,195,081 $ 1,577,540 $ 2,372,783 |
Schedule of fair value of employee stock options | The fair value of stock options issued was estimated using the following: For The Six Months Weighted average exercise price $ 1.08 Weighted average grant date fair value $ 0.71 Assumptions Expected volatility 92%-96 % Expected term (in years) 6.3 – 10.0 Risk-free interest rate 3.44%-3.79 % Expected dividend yield 0.00 % |
Schedule of stock option activity | Number of Weighted- Weighted- Intrinsic Outstanding at January 1, 2023 2,909,057 $ 5.96 7.46 $ 24,279 Granted 2,689,950 1.08 - - Cancelled (315,718 ) 7.34 - - Outstanding at June 30, 2023 5,283,289 $ 3.39 8.28 $ - Exercisable at June 30, 2023 2,017,173 $ 4.82 6.74 $ - |
Going Concern and Management__2
Going Concern and Management’s Plans (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Going Concern and Management’s Plans [Abstract] | ||
Net loss | $ 12.1 | $ 17.1 |
Negative cash from operations | 8.8 | $ 12.3 |
Cash and cash equivalents | 7.7 | |
Working capital surplus | 8.2 | |
Accumulated deficit | $ 109.2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 02, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Line Items] | |||||
Research and development tax percentage | 43.50% | 43.50% | |||
Incentive receivable | $ 284,169 | $ 284,169 | $ 186,507 | ||
Research and development expenses | $ 96,560 | $ 122,269 | $ 78,257 | ||
Increase research and development expenses | 28,834 | ||||
Reduction to research and development expenses | $ 144,667 | ||||
Trading days | 30 days | ||||
Notice days | 180 days | ||||
Consecutive business days | 10 days | ||||
Initial period | 180 days | ||||
Common Stock [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Price per share (in Dollars per share) | $ 1 | ||||
Closing bid price (in Dollars per share) | $ 1 | $ 1 | |||
Minimum [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Initial period | 180 days |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of potential common stock equivalents outstanding - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Significant Accounting Policies [Line Items] | ||
Potential common stock equivalents outstanding | 11,031,081 | 3,410,786 |
Stock Options [Member] | ||
Significant Accounting Policies [Line Items] | ||
Potential common stock equivalents outstanding | 5,283,289 | 2,996,553 |
Warrants [Member] | ||
Significant Accounting Policies [Line Items] | ||
Potential common stock equivalents outstanding | 5,747,792 | 414,233 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 1 Months Ended |
Oct. 31, 2018 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Rent expenses | $ 37,080 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Operating leases: | ||
Operating lease right-of-use assets | $ 158,541 | $ 196,044 |
Operating lease liability - current portion | 81,938 | 80,625 |
Operating lease liability - long-term portion | 72,328 | $ 110,094 |
Total operating lease liabilities | $ 154,266 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of supplemental lease expense related to leases - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Supplemental Lease Expense Related to Leases [Line Items] | ||||
Total lease expense | $ 43,845 | $ 34,569 | $ 87,890 | $ 61,514 |
Research and development [Member] | ||||
Schedule of Supplemental Lease Expense Related to Leases [Line Items] | ||||
Operating lease cost | 22,275 | 7,425 | 44,550 | 7,425 |
Short-term lease cost | 6,244 | 12,489 | ||
General and administrative [Member] | ||||
Schedule of Supplemental Lease Expense Related to Leases [Line Items] | ||||
Short-term lease cost | $ 21,570 | $ 20,900 | $ 43,340 | $ 41,600 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of other information related to operating leases | Jun. 30, 2023 |
Schedule of Other Information Related to Operating Leases [Abstract] | |
Weighted-average remaining lease term | 1 year 10 months 24 days |
Weighted-average discount rate | 8% |
Commitments and Contingencies_6
Commitments and Contingencies (Details) - Schedule of supplemental cash flow information related to operating leases - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for operating lease liabilities | $ 43,500 | $ 12,783 |
Commitments and Contingencies_7
Commitments and Contingencies (Details) - Schedule of future minimum lease payments under non-cancellable leases | Jun. 30, 2023 USD ($) |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
2023 (Remaining) | $ 50,000 |
2024 | 91,000 |
2025 | 38,000 |
Total minimum lease payments | 179,000 |
Less: Imputed interest | (12,000) |
Total | $ 167,000 |
Convertible Note Receivable __2
Convertible Note Receivable – Augmenta (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Convertible Note Receivable [Line Items] | |
Principal amount | $ 1,812,975 |
Accrues interest rate | 6% |
Outstanding principal amount | $ 15,000,000 |
Outstanding principal interest percentage | 100% |
Qualified Financing [Member] | |
Convertible Note Receivable [Line Items] | |
Gross proceeds | $ 15,000,000 |
Qualified IPO [Member] | |
Convertible Note Receivable [Line Items] | |
Gross proceeds | 35,000,000 |
Private Placement [Member] | |
Convertible Note Receivable [Line Items] | |
Outstanding principal amount | $ 15,000,000 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details) - Schedule of company’s assets and liabilities that are measured at fair value | Jun. 30, 2023 USD ($) |
Assets | |
Augmenta Note at fair value | $ 1,830,000 |
Level 1 [Member] | |
Assets | |
Augmenta Note at fair value | |
Level 2 [Member] | |
Assets | |
Augmenta Note at fair value | |
Level 3 [Member] | |
Assets | |
Augmenta Note at fair value | $ 1,830,000 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities (Details) - Schedule of fair value of the company’s Level 3 financial assets - Level 3 [Member] | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 1,812,975 |
Accrued interest receivable | 54,441 |
Change in fair value | (37,416) |
Ending balance | $ 1,830,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2018 | Jun. 30, 2023 | Sep. 30, 2021 | |
Stock Based Compensation [Line Items] | |||
Common stock | 4,200,000 | ||
Unrecognized compensation expense (in Dollars) | $ 5,557,000 | ||
Weighted-average period | 1 year 9 months 18 days | ||
IPO [Member] | |||
Stock Based Compensation [Line Items] | |||
Shares reserved for issuance | 1,630,000 | ||
Common stock | 3,284,480 | ||
percentage of outstanding shares | 15% |
Stock Based Compensation (Det_2
Stock Based Compensation (Details) - Schedule of stock-based compensation expense - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of stock-based compensation expense [Abstract] | ||||
Stock based compensation expense | $ 825,719 | $ 1,195,081 | $ 1,577,540 | $ 2,372,783 |
Research and development [Member] | ||||
Schedule of stock-based compensation expense [Abstract] | ||||
Stock based compensation expense | 261,239 | 244,276 | 505,114 | 450,085 |
General and administrative [Member] | ||||
Schedule of stock-based compensation expense [Abstract] | ||||
Stock based compensation expense | $ 564,480 | $ 950,805 | $ 1,072,426 | $ 1,922,698 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details) - Schedule of fair value of employee stock options | 6 Months Ended |
Jun. 30, 2023 $ / shares | |
Schedule of stock-based compensation expense [Abstract] | |
Weighted average exercise price (in Dollars per share) | $ 1.08 |
Weighted average grant date fair value (in Dollars per share) | $ 0.71 |
Assumptions | |
Expected dividend yield | 0% |
Minimum [Member] | |
Assumptions | |
Expected volatility | 92% |
Expected term (in years) | 6 years 3 months 18 days |
Risk-free interest rate | 3.44% |
Maximum [Member] | |
Assumptions | |
Expected volatility | 96% |
Expected term (in years) | 10 years |
Risk-free interest rate | 3.79% |
Stock Based Compensation (Det_4
Stock Based Compensation (Details) - Schedule of stock option activity | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Schedule of stock-based compensation expense [Abstract] | |
Number of Shares, Outstanding, Outstanding ending balance | shares | 2,909,057 |
Weighted-Average Exercise Prices, Outstanding, Outstanding ending balance | $ / shares | $ 5.96 |
Weighted-Average Remaining Contractual Term, Outstanding ending balance | 7 years 5 months 15 days |
Intrinsic Value, Outstanding ending balance | $ | $ 24,279 |
Number of Shares, Outstanding, Granted | shares | 2,689,950 |
Weighted-Average Exercise Prices, Outstanding, Granted | $ / shares | $ 1.08 |
Weighted-Average Remaining Contractual Term, Granted | |
Intrinsic Value, Granted | $ | |
Number of Shares, Cancelled | shares | (315,718) |
Weighted-Average Exercise Prices, Outstanding, Cancelled | $ / shares | $ 7.34 |
Weighted-Average Remaining Contractual Term, Cancelled | |
Intrinsic Value, Cancelled | $ | |
Number of Shares, Outstanding, Outstanding ending balance | shares | 5,283,289 |
Weighted-Average Exercise Prices, Outstanding, Outstanding ending balance | $ / shares | $ 3.39 |
Weighted-Average Remaining Contractual Term, Outstanding ending balance | 8 years 3 months 10 days |
Intrinsic Value, Outstanding ending balance | $ | |
Number of Shares, Outstanding, Exercisable | shares | 2,017,173 |
Weighted-Average Exercise Prices, Outstanding, Exercisable | $ / shares | $ 4.82 |
Weighted-Average Remaining Contractual Term, Exercisable | 6 years 8 months 26 days |
Intrinsic Value, Exercisable | $ |
Sbir Grant (Details)
Sbir Grant (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 23, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of stock-based compensation expense [Abstract] | |||||
Continue development of a novel | $ 2,681,898 | $ 5,102,090 | $ 6,700,557 | $ 10,339,514 | |
Expected years | 3 years | ||||
Phase II Small Business Innovation Research [Member] | |||||
Schedule of stock-based compensation expense [Abstract] | |||||
Continue development of a novel | $ 2,840,000 |
Subsequent Events (Details)
Subsequent Events (Details) | Aug. 14, 2023 |
Subsequent Event [Member] | |
Schedule of stock-based compensation expense [Abstract] | |
Option to purchase days | 30 days |