Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 15, 2022 | Jun. 30, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 001-40536 | ||
Entity Registrant Name | Acurx Pharmaceuticals, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-3733567 | ||
Entity Address State Or Province | NY | ||
Entity Address, Address Line One | 259 Liberty Ave. | ||
Entity Address, City or Town | Staten Island | ||
Entity Address, Postal Zip Code | 10305 | ||
City Area Code | 917 | ||
Local Phone Number | 533-1469 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | ACXP | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 48.1 | ||
Entity Common Stock, Shares Outstanding | 10,233,202 | ||
Entity Central Index Key | 0001736243 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | CohnReznick LLP | ||
Auditor Firm ID | 596 | ||
Auditor Location | Parsippany, NJ |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 12,958,846 | $ 3,175,411 |
Prepaid Expenses | 295,304 | 48,609 |
TOTAL ASSETS | 13,254,150 | 3,224,020 |
CURRENT LIABILITIES | ||
Accounts Payable and Accrued Expenses | 843,909 | 455,931 |
Paycheck Protection Program Loan | 16,625 | |
TOTAL CURRENT LIABILITIES | 843,909 | 472,556 |
NONCURRENT LIABILITIES | ||
Paycheck Protection Program Loan | 49,878 | |
TOTAL LIABILITIES | 843,909 | 522,434 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' AND MEMBERS' EQUITY | ||
Common Stock; $.001 par value, 200,000,000 shares authorized, 10,215,792 shares issued and outstanding at December 31, 2021 | 10,216 | |
Additional Paid-In Capital | 38,948,334 | |
Accumulated Deficit | (26,548,309) | (13,800,612) |
TOTAL SHAREHOLDERS' AND MEMBERS' EQUITY | 12,410,241 | 2,701,586 |
TOTAL LIABILITIES AND SHAREHOLDERS' AND MEMBERS' EQUITY | $ 13,254,150 | 3,224,020 |
Members' Equity, Class A | ||
SHAREHOLDERS' AND MEMBERS' EQUITY | ||
Members' Equity | 16,402,198 | |
Members' Equity, Class B | ||
SHAREHOLDERS' AND MEMBERS' EQUITY | ||
Members' Equity | $ 100,000 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
BALANCE SHEETS | ||
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, Authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, Issued (in shares) | 10,215,792 | |
Common stock, Outstanding (in shares) | 10,215,792 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING EXPENSES | ||
Research and Development | $ 2,030,177 | $ 2,202,979 |
General and Administrative | 10,784,023 | 2,397,059 |
TOTAL OPERATING EXPENSES | 12,814,200 | 4,600,038 |
Gain on Forgiveness of Paycheck Protection Program Loan | 66,503 | |
NET LOSS | $ (12,747,697) | $ (4,600,038) |
LOSS PER SHARE | ||
Basic net loss per common share/units | $ (1.49) | $ (0.74) |
Diluted net loss per common share/units | $ (1.49) | $ (0.74) |
Weighted average pro forma shares outstanding basic | 8,535,873 | 6,190,875 |
Weighted average pro forma shares outstanding diluted | 8,535,873 | 6,190,875 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' AND MEMBERS' EQUITY - USD ($) | Members' Equity, Class ACommon Stock | Members' Equity, Class BCommon Stock | Common StockCommon Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at beginning at Dec. 31, 2019 | $ 9,920,428 | $ 100,000 | $ (9,200,574) | $ 819,854 | ||
Balance at beginning, Member Units (in shares) at Dec. 31, 2019 | 11,058,666 | 100,000 | ||||
Private Placement Offerings (in value) | $ 4,432,124 | 4,432,124 | ||||
Private Placement Offerings (in shares) | 1,421,629 | |||||
Executive Compensation Settled with Membership Interests (in value) | $ 781,700 | 781,700 | ||||
Executive Compensation Settled with Membership Interests (in shares) | 312,680 | |||||
Share-Based Compensation, (in value) | $ 695,833 | 695,833 | ||||
Share-Based Compensation, (in shares) | 553,419 | |||||
Share-Based Payments to Vendors (in value) | $ 572,113 | 572,113 | ||||
Share-Based Payments to Vendors (in shares) | 147,413 | |||||
Net Loss | (4,600,038) | (4,600,038) | ||||
Balance at ending at Dec. 31, 2020 | $ 16,402,198 | $ 100,000 | (13,800,612) | 2,701,586 | ||
Balance at ending, Member Units (in shares) at Dec. 31, 2020 | 13,493,807 | 100,000 | ||||
Executive Compensation Settled with Membership Interests (in value) | $ 186,650 | $ 730,115 | 916,765 | |||
Executive Compensation Settled with Membership Interests (in shares) | 57,430 | 471,042 | ||||
Share-Based Compensation, (in value) | $ 755,556 | $ 4,399,158 | 5,154,714 | |||
Share-Based Compensation, (in shares) | 400,936 | |||||
Share-Based Payments to Vendors (in value) | $ 172,971 | $ 300 | 1,414,470 | 1,587,741 | ||
Share-Based Payments to Vendors (in shares) | 30,145 | 299,584 | ||||
Net Loss | (12,747,697) | (12,747,697) | ||||
Cancellation of Class B Issuance (in shares) | (471,042) | |||||
Corporate Conversion (in value) | $ (17,517,375) | $ (830,115) | $ 7,041 | 18,340,449 | ||
Corporate Conversion (in shares) | (13,982,318) | (100,000) | 7,041,208 | |||
Initial Public Offering, net of cash issuance costs (in value) | $ 2,875 | 14,794,257 | 14,797,132 | |||
Initial Public Offering, net of cash issuance costs (in shares) | 2,875,000 | |||||
Balance at ending at Dec. 31, 2021 | $ 10,216 | $ 38,948,334 | $ (26,548,309) | $ 12,410,241 | ||
Balance at ending, Common shares (in shares) at Dec. 31, 2021 | 10,215,792 | 10,215,792 |
STATEMENTS OF CHANGES IN SHAR_2
STATEMENTS OF CHANGES IN SHAREHOLDERS' AND MEMBERS' EQUITY (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
STATEMENTS OF CHANGES IN SHAREHOLDERS' AND MEMBERS' EQUITY | ||
Cash issuance cost | $ 2,452,868 | $ 51,409 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flow from Operating Activities: | ||
Net Loss | $ (12,747,697) | $ (4,600,038) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Share-Based Compensation | 5,154,714 | 695,833 |
Share-Based Payments to Vendors | 1,587,741 | 572,113 |
Executive Compensation Settled with Membership Interests | 916,765 | 781,700 |
Gain on Forgiveness of Paycheck Protection Program Loan | (66,503) | |
(Increase) / Decrease in: | ||
Prepaid Expenses | (246,695) | (506) |
Accounts Payable and Accrued Expenses | 387,978 | (800,660) |
Net Cash Used in Operating Activities | (5,013,697) | (3,351,558) |
Cash Flow from Financing Activities: | ||
Proceeds from Paycheck Protection Program Loan | 66,503 | |
Proceeds from Initial Public Offering, net of issuance costs | 14,797,132 | |
Proceeds from Private Placement Offerings, net of issuance costs | 3,977,144 | |
Net Cash Provided by Financing Activities | 14,797,132 | 4,043,647 |
Net Increase in Cash | 9,783,435 | 692,089 |
Cash at Beginning of Year | 3,175,411 | 2,483,322 |
Cash at End of Year | 12,958,846 | 3,175,411 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES | ||
Warrants issued in connection with offerings | $ 618,000 | $ 23,177 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | NOTE 1 – NATURE OF OPERATIONS Business: Acurx Pharmaceuticals, Inc., a Delaware corporation, formerly Acurx Pharmaceuticals, LLC (the “Company”) is a publicly held, clinical stage biopharmaceutical company formed in July 2017, with operations commencing in February 2018. The Company is focused on developing a novel class of antibiotics that address serious or life threatening bacterial infections. In March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of coronavirus, a global pandemic. This outbreak caused major disruptions to businesses and markets worldwide as the virus continued to spread. The COVID-19 pandemic has disrupted, and the Company expects it will continue to disrupt, its operations. The extent of the effect on the Company’s operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, and governmental, regulatory and private sector responses, all of which are uncertain and difficult to predict. Although the Company is unable to estimate the financial effect of the pandemic, at this time, if the pandemic continues over a long period of time, it could have a material adverse effect on the Company’s business, results of operations, financial condition, and cash flows. The financial statements do not reflect any adjustments as a result of the pandemic. In February 2018, the Company purchased the active pharmaceutical ingredient, the intellectual property and other rights to an antibiotic product candidate known as GLS362E (renamed ACX-362E and now approved for non-proprietary name, ibezapolstat) (the “Asset”) from GLSynthesis, Inc. The Company paid $110,174 in cash, along with granting 100,000 Class B Membership Interests, profits interests as defined in the operating agreement, with an exercise price of $0.10 per share. The Company was also required to make certain milestone payments totaling $700,000 in aggregate if certain milestones are achieved, $50,000 of which has already been paid by the Company and royalty payments equal to 4% of net sales for a period of time equal to the last to expire of any applicable patents, as defined in the asset purchase agreement. The purchase of the Asset has resulted in our lead antibiotic product candidate, ibezapolstat, which targets the treatment of CDI. The Company’s primary activities since inception aside from organizational activities have included performing research and development activities relating to the development of its two antibiotic candidates and raising funds through equity offerings including its initial public offering (“IPO”) consummated in June 2021. The Company has not generated any revenues since inception. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company has needed to raise capital from sales of its securities to sustain operations. On June 29, 2021, the Company completed the IPO, issuing 2,875,000 shares of common stock at a price of $6.00 per share, with gross proceeds of approximately $17.3 million. As of December 31, 2021, the Company had a cash balance of approximately $13.0 million, which based on current estimates will be sufficient to meet our anticipated cash requirements for at least 12 months from the issuance of the financial statements for the year ended December 31, 2021. Management believes that the Company will continue to incur losses for the foreseeable future and will need additional resources to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional equity financing and grant funding, but cannot assure that such financing and funding will be available at acceptable terms, or at all. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that the Company’s research and development will be successfully completed or that any Company product candidate will be approved by the Food and Drug Administration (“FDA”) or any other worldwide regulatory authority or become commercially viable. The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting standards generally accepted in the Unites States of America (“GAAP”) requires 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. Actual results could differ from those estimates. Income Taxes The Company estimates an annual effective tax rate of 0% as the Company incurred net losses for the year ended December 31, 2021 resulting in an estimated net loss for both financial statement and tax purposes. Therefore, no current federal or state income tax expense has been recorded in the financial statements. Based on the Company’s history of generating operating losses and its anticipation of operating losses for the foreseeable future, the Company has determined that it is more likely than not that the tax benefits from those net operating losses would not be realized and a full valuation allowance against all deferred tax assets has been recorded. Should the Company’s assessment change, tax benefits associated with the historic net operating loss carryforwards could be limited due to future ownership changes. Prior to the Company’s corporate conversion in June 2021, the Company was organized as a limited liability company. As such, the Company was not a tax paying entity for federal income tax purposes and, therefore, no income tax expense has been recorded in the financial statements for the year ended December 31, 2020. Income or losses of the Company was passed through to the members for inclusion in their respective income tax returns. Concentration of Credit Risk The Company maintains its cash balance in one financial institution. The balance is insured up to the maximum allowable by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant risk of loss on cash. At times, the cash balance may exceed the maximum insured limit of the FDIC. As of December 31, 2021, the Company had cash of approximately $13.0 million in U.S. bank accounts which was not fully insured by the FDIC. Guaranteed Payments to Members Prior to the corporate conversion, guaranteed payments to members of the Company that were designated to represent reasonable compensation for services rendered were accounted for as Company expenses rather than an allocation of the Company’s net income. Research and Development The Company expenses research and development costs when incurred. At times, the Company may make cash advances for future research and development services. These amounts are deferred and expensed in the period the service is provided. The Company incurred research and development expenses in the amount of $2,030,177 and $2,202,979 for the years ended December 31, 2021 and 2020, respectively. Share-Based Compensation The Company accounts for the cost of services performed by officers and directors received in exchange for an award of Company membership interests, common stock or stock options, based on the grant-date fair value of the award. The Company recognizes compensation expense based on the requisite service period. Compensation expense associated with stock option awards is recognized over the requisite service period based on the fair value of the option at the grant date determined based on the Black-Scholes option pricing model. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model. Because there is no public market for the Company’s stock options and very little historical experience with the Company’s stock, similar public companies were used for the comparison of volatility and the dividend yield. The risk-free rate of return was derived from U.S. Treasury notes with comparable maturities Share-Based Payments to Vendors The Company accounts for the cost of services performed by vendors in exchange for an award of Company membership interests, common stock, or stock options, based on the grant-date fair value of the award or the fair value of the services rendered; whichever is more readily determinable. Such fair value is measured as of the date the services or the date performance by the other party is complete. The Company recognizes the expense in the same period and in the same manner as if the Company had paid cash for the services. Major Vendor The Company had a major vendor that accounted for approximately 42% and 40% of the research and development expenditures for the years ended December 31, 2021 and 2020, respectively. The same vendor also accounted for approximately 5% and 6% of the total accounts payable and accrued expenses as of December 31, 2021 and 2020, respectively. The Company continues to maintain this vendor relationship and anticipates incurring significant expenses with this vendor over the next 12 months. The Company had an additional major vendor in 2021 that accounted for approximately 15% of the research and development expenditures for the year ended December 31, 2021. The same vendor did not account for any portion of accounts payable and accrued expenses. The Company continues to maintain this vendor relationship and anticipates incurring significant expenses with this vendor over the next 12 months. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses as of December 31, 2021 and 2020 were as follows: December 31, 2021 December 31, 2020 Accrued compensation expenses $ 508,343 $ 317,068 Accrued research and development 229,090 89,156 Accrued professional fees 43,102 49,707 Other accounts payable and accrued expenses 63,374 — Total $ 843,909 $ 455,931 |
PAYCHECK PROTECTION PROGRAM LOA
PAYCHECK PROTECTION PROGRAM LOAN | 12 Months Ended |
Dec. 31, 2021 | |
PAYCHECK PROTECTION PROGRAM LOAN | |
PAYCHECK PROTECTION PROGRAM LOAN | NOTE 4 – PAYCHECK PROTECTION PROGRAM LOAN In May 2020, the Company received a Paycheck Protection Program loan (“PPP Loan”) under the CARES Act, as administered by the U.S. Small Business Administration (”SBA”) in the amount of $66,503. The Company did not provide any collateral or guarantees in connection with the PPP loan, nor did the Company pay any facility charge to obtain the PPP Loan. The note and agreement provided for customary events of default, including those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company was permitted to prepay the principal of the PPP Loan at any time without incurring any prepayment charges. the amount of $66,503 on the forgiveness of the PPP loan in the statements of operations for the year ended December 31, 2021. |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
EXECUTIVE COMPENSATION | |
EXECUTIVE COMPENSATION | NOTE 5 – EXECUTIVE COMPENSATION The Company’s co-founders and original two executives received compensation pursuant to employment agreements effective January 2018 (the “Original Agreements”). The Original Agreements stipulated that the executives would receive a base salary of $277,000 per annum, of which a portion was payable with the issuance of Class A Membership Interests of the Company at the most recent offering price when the service was rendered. The Company also employed a third executive on a part-time basis for $7,500 per month, of which a portion was payable with the issuance of Class A Membership Interests during 2018. The Company did not issue any Class A Membership Interests to executives in 2019. In 2019, the three executives executed waiver letters, deferring any unpaid compensation per their Original Agreements until the later to occur of (1) the date upon which the Company has raised $2.5 million from equity/debt offerings and/or grants equal to $2.5 million, and (2) January 15, 2020. Accrued deferred compensation per their Original Agreements was recorded in the amount of $104,000 as of December 31, 2020. In January 2020, the Company issued 312,680 Class A Membership Interests at $2.50 per unit, equal to the value of the most recent private placement, to its three executives to settle unpaid year-end compensation for 2019 and a year-end bonus award, which was approved by the board of directors. The year-end bonus component was equal to 244,860 Class A Membership Interests. In January 2021, the Company issued 57,430 Class A Membership Interests at $3.25 per unit, equal to the value of the most recent private placement, to two of its executives to settle unpaid year-end bonus award and deferred compensation, which was approved by the board of directors. The year-end bonus component was equal to 38,353 Class A Membership Interests, which was included as accrued compensation. In January 2021, the Company also amended the employment agreements for the three executives. The board of directors also approved certain grants to members of management as a component of their 2020 year-end compensation, authorizing the issuance of 1,540,000 Class B Membership Interests to its three executives, as well as 75,000 Class B Membership Interests which were granted to non-employee management team members. The Class B Membership Interests are profits interests with a defined exercise price of $3.25 per interest, the Company’s most recent financing offering price. In March 2021, the Company along with its three executives and non-employee management team agreed voluntarily to cancel the aforementioned equity grants. The Company granted options to purchase 770,000 shares of the Company’s common stock in June 2021 to the three-member management team in replacement of the cancelled year-end grants described above. The Company is currently managed by three executives, in each case pursuant to new employment agreements effective June 29, 2021. |
ISSUANCE OF EQUITY INTERESTS
ISSUANCE OF EQUITY INTERESTS | 12 Months Ended |
Dec. 31, 2021 | |
ISSUANCE OF EQUITY INTERESTS | |
ISSUANCE OF EQUITY INTERESTS | NOTE 6 – ISSUANCE OF EQUITY INTERESTS The Company consummated two private placement equity offerings in 2018 in a total of four closings. These offerings were consummated at $1.00 per share and $1.50 per share, respectively, and both included 50% warrant coverage. Thereafter, on March 29, 2019, the Company entered into a securities purchase agreement for the private placement of the Company’s Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $2.00 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one On August 8, 2019, the Company entered into a securities purchase agreement for the private placement of the Company’s Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $2.00 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one-half of the total Class A Membership Interests purchased. The Company issued and sold an aggregate of 1,248,750 units, comprised of 1,248,750 Class A Membership Interests and warrants to purchase up to 624,375 additional Class A Membership Interests for gross proceeds of $2,497,500. Each warrant, exercisable for 10 years from August 8, 2019, has an exercise price of $2.00 per Class A Membership Interest. On October 18, 2019, the Company entered into a securities purchase agreement for the private placement of the Company’s Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $2.00 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one-half of the total Class A Membership Interests purchased. The Company issued and sold an aggregate of 483,501 units, comprised of 483,501 Class A Membership Interests and warrants to purchase up to 241,751 additional Class A Membership Interests for gross proceeds of $967,000. Each warrant, exercisable for 10 years from October 18, 2019, has an exercise price of $2.00 per Class A Membership Interest. On January 6, 2020, the Company entered into a securities purchase agreement for the private placement of the Company’s Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $2.50 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one On July 20, 2020, the Company entered into a securities purchase agreement for the private placement of the Company’s Class A Membership Interests at a purchase price of $3.25 per unit. The Company issued and sold an aggregate of 533,900 Class A Membership Interests for gross proceeds of $1,735,175. There were no warrants included in this private placement. On October 16, 2020, the Company entered into a securities purchase agreement for the private placement of the Company’s Class A Membership Interests at a purchase price of $3.25 per unit. The Company issued and sold an aggregate of 705,727 Class A Membership Interests for gross proceeds of $2,293,613. There were no warrants included in this private placement. On June 23, 2021, Acurx Pharmaceuticals, LLC was converted into a corporation and renamed Acurx Pharmaceuticals, Inc. The Company’s certificate of incorporation authorizes 200,000,000 shares of common stock of which 10,215,792 were outstanding as of December 31, 2021. On June 29, 2021, the Company completed an IPO issuing 2,875,000 shares of common stock at a price of $6.00 per share, resulting in net cash proceeds of approximately $14.8 million, with cash issuance costs of approximately $2.4 million. The outstanding Class A and Class B Membership Interests were converted to shares of common stock pursuant to a conversion ratio of one-for-two of the Membership Interests outstanding, resulting in the conversion of 14,082,318 Class A and Class B Membership Interests into 7,041,208 shares of common stock. Warrants to purchase Class A Membership Interests were converted to warrants to purchase common stock at the same one-for two conversion ratio, resulting in 1,437,577 warrants to purchase common stock with a weighted average exercise price of $2.88. In connection with the IPO, the Company issued 150,000 warrants to the underwriter. Each warrant is exercisable for 4.5 years from December 21, 2021 at an exercise price of $7.50 per share. The Company used the Black-Scholes model to calculate the value of the warrants with an estimated fair value of $618,000. The inputs utilized in the calculation were as follows: four and a half-year |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 7 – SHARE-BASED COMPENSATION While the Company was a limited liability company in its pre-IPO phase of corporate development, the Company granted performance-based awards of restricted Class A Membership Interests to board members and corporate advisory council members in exchange for services. All of these awards of membership interests became fully vested upon consummation of the Company’s corporate conversion from Delaware limited liability company to a Delaware corporation immediately prior to the Company’s IPO, with the Company recognizing all previously unrecognized compensation expense. The fair value of the membership interests granted during 2020 and 2019 was equal to the per-membership interest value of the most recent private placement with a weighted average of $2.14 per membership interest. Total share-based compensation associated with these awards has been recorded as general and administrative expenses in the amount of $755,556 and $695,833 for the years ended December 31, 2021 and 2020, respectively. The following table summarizes the unvested Class A Membership Interests converted to common stock pursuant to a conversion ratio of one-for-two, and associated activity for the 12 months ended December 31, 2021: Class A Membership Interests Converted to common stock at one-for-two ratio Unvested at December 31, 2020 200,463 Vested (200,463) Unvested at December 31, 2021 — In April 2021, the board of directors approved the creation of the 2021 Equity Incentive Plan (the “Plan”). The Plan became effective as of the completion of the corporate conversion. The Plan currently reserves an aggregate of 2,000,000 shares of common stock, subject to adjustments as provided in the Plan, of which 239,305 are currently still available for issuance. The purpose of the Plan is to attract, retain and incentivize directors, officers, employees, and consultants. In June 2021, the Company granted stock options to purchase a total of 807,500 shares of common stock to its three executives and three non-employee management team members to replace the Class B Membership Interests that were cancelled in March 2021. The options were issued at an exercise price of $6.26, with the employee options vesting 40% upon In July 2021, the Company granted stock options to purchase a total of 1,550,000 shares of common stock to its three executives pursuant to their respective employment agreements, the independent directors, and one consultant, pursuant to the Plan. The options were issued at an exercise price of $6.18, the grant date fair value, with one-quarter of the executive’s options vesting upon issuance and the balance over 36 months, and the options granted to the directors and consultants vesting over 36 months. The Company recorded general and administrative expenses of $2,379,833 for the year ended December 31, 2021 related to compensation expense for these options. Compensation expense associated with these awards is recognized over the vesting period based on the fair value of the option at the grant date determined based on the Black-Scholes model. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model. Because there is no public market for the Company’s stock options and very little historical experience with the Company’s stock, similar public companies were used for the comparison of volatility and the dividend yield. The risk-free rate of return was derived from U.S. Treasury notes with comparable maturities. The Company determined the fair value of the option awards using the Black-Scholes option pricing model using the following weighted average assumptions: Year Ended December 31, 2021 Expected term 6.2 Volatility 93 % Dividend yield — % Risk-free interest rate 1.09 % Weighted average grant date fair value $ 4.72 A summary of the Company’s stock option activity is as follows: Year Ended Weighted Average December 31, 2021 Exercise Price Outstanding at the beginning of the period — Granted 2,357,500 $ 6.21 Vested (930,833) $ 6.22 Exercised — Forfeited — Outstanding and expected to vest 1,426,667 $ 6.20 The total compensation expense not yet recognized as of December 31, 2021 was $6,726,367. The weighted average vesting period for the unvested options is 2.50 9.5 |
SHARE-BASED PAYMENTS TO VENDORS
SHARE-BASED PAYMENTS TO VENDORS | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED PAYMENTS TO VENDORS | |
SHARE-BASED PAYMENTS TO VENDORS | NOTE 8 – SHARE-BASED PAYMENTS TO VENDORS While the Company was a limited liability company in its pre-IPO phase of corporate development, the Company granted Class A Membership Interests to certain vendors in the ordinary course of business in exchange for consulting services relating to research and development activities and investor relations. The Company granted 30,145 and 147,413 Class A Membership Interests for the years ended December 31, 2021 and 2020, respectively. The fair value of the Class A Membership Interests granted was equal to the value of the most recent private placement. The Company recognized the expense in the same period and in the same manner as if the Company had paid cash for the services. The Company recorded general and administrative expenses and research and development expenses for vendor equity grants in the amounts of $201,375 and $21,596 for the year ended December 31, 2021, respectively, and $338,802 and $233,311 for the year ended December 31, 2020, respectively. In October 2019, the Company granted a total of 150,000 restricted Class A Membership Interests to three consultants for investor relations consulting services performed in 2019 through October 2021. These Class A Membership Interests vested on the second anniversary of the grant date, and were subject to accelerated vesting provisions upon a change of control of the Company. The fair value of the Class A Membership Interests granted was equal to the value of the most recent private placement, $2.00 per Class A Membership Interest. The Company recognized the expense on a straight-line basis over the vesting period. The Company recorded general and administrative expenses of $125,000 and $150,000 for the years ended December 31, 2021 and 2020, respectively. The conversion adjusted shares of common stock were issued in October 2021. During 2020, the Company issued 10,077 warrants to an investment banker for services relating to the October 2020 private placement. Each warrant vested upon issuance, is exercisable for 10 years from the date of issuance and has an exercise price of $3.25 per Class A Membership Interest. The Company used the Black-Scholes model to calculate the fair value of the warrants. The inputs utilized in the calculation were as follows: 10 In the second quarter of 2021, the Company entered into a number of agreements with vendors pursuant to which the Company will make grants of a total of 175,000 shares of common stock, cash payments in the amount of $343,500, and 100,000 options which were included as a part of the July 2021 grant. These contracts have terms which range from six months to three years. The common stock was valued based on the grant date fair value and the options valued utilizing Black-Scholes option pricing model. The cash payments will be expensed over the service period and the equity component expensed consistent with the contractual vesting. These shares and options were granted in the third quarter pursuant to the Plan. In the third quarter of 2021, the Company granted vendors a total of 35,695 shares of common stock pursuant to the Plan. The Company recorded general, and administrative expense of $208,270, based on the respective grant date fair values, for the year ended December 31, 2021. In October 2021, the Company entered into an agreement with a consultant to provide financial advisory services for a six-month term. Pursuant to the agreement, the Company will grant $150,000 of common stock over the term of service. The Company granted 13,889 shares of common stock at grant date fair value and recorded general and administrative expenses of $75,000 for the year ended December 31, 2021. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9 – INCOME TAXES The Company has $6.1 million of net operating loss carryforwards and $0.1 million of research tax credit carryforwards as of December 31, 2021. The net operating loss carryforwards are indefinite lived and research tax credit carryforwards will expire in 2041. Net operating loss and tax credit carryforwards may become subject to annual limitations in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined by Sections 382 and 383 of the Internal Revenue Code as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The components of the net deferred income tax asset at December 31, 2021 are as follows: 2021 Deferred tax assets: Net operating loss carryforwards $ 1,594,650 Share‑based compensation 1,149,720 Research and development credit carryforwards 105,881 Gross deferred tax assets 2,850,251 Less valuation allowance (2,850,251) Net deferred tax asset $ — In assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against their net deferred tax assets at December 31, 2021 because the Company has concluded that it is more-likely-than-not that these assets will not be realized. A reconciliation of income tax expense (benefit) at the statutory Federal income tax rate and income taxes as reflected in the financial statements for both years ended December 31, 2021 is as follows: Federal income tax expense at statutory rate 21.0 % State income tax, net of federal benefit 5.1 Permanent differences — Research and development tax credit 1.0 Change in valuation allowance (27.1) Effective income tax rate — % The Company files income tax returns in the U.S. and the State of New York. The tax year 2021 is open and potentially subject to examination by the federal and state taxing authorities. The Company is currently not under examination by the Internal Revenue Service or any other jurisdictions for any tax years. To the extent the Company utilizes any tax attributes from a tax period that may otherwise be closed due to statute expiration, the Internal Revenue Service, state tax authorities, or other governing parties may still adjust the tax attributes upon their examination of the future period in which the attribute was utilized. There are no uncertain tax positions recorded for any federal or state positions. The Company’s policy is to record interest and penalties related to tax matters in income tax expense |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 10 – NET LOSS PER SHARE On June 23, 2021, the Company completed a corporate conversion from a limited liability company to a corporation. Accordingly, the outstanding Class A and Class B Membership Interests were converted to shares of common stock using a conversion ratio of one-half of one share of common stock for each Class A membership interest or Class B membership interest, resulting in the conversion of 14,082,318 Class A and Class B Membership Interests into 7,041,208 shares of common stock. Basic and diluted net loss per share of common stock for the 12 months ended December 31, 2021 was determined by dividing net loss by the weighted average shares of common stock outstanding during the period. The Company’s potentially dilutive shares, consisting of 1,588,477 warrants, and 2,357,500 stock options, have not been included in the computation of diluted net loss per share for all periods as the result would be antidilutive. The effects of the corporate conversion on the Company’s weighted average shares of common stock outstanding and net loss per share have been reflected for all periods presented retroactively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS During 2020, the Company engaged a former member of the board of directors to provide administrative services for a 12-month period for a total of $15,000, $7,500 of which was expensed in 2020. The Company paid and expensed $7,500 for these services during the third quarter of 2021, representing the balance of the services per the agreement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES In conjunction with the Asset purchase in February 2018, the Company is required to make certain milestone payments related to the ongoing development of ACX-362E totaling $700,000 in the aggregate if certain milestones are achieved (which includes $50,000 already paid after the acquisition in February 2018). The Company is also obligated to make royalty payments equal to 4% of net sales of ACX-362E for a period of time equal to the last to expire of any applicable patents, as defined in the purchase agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting standards generally accepted in the Unites States of America (“GAAP”) requires 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. Actual results could differ from those estimates. |
Income Taxes | Income Taxes The Company estimates an annual effective tax rate of 0% as the Company incurred net losses for the year ended December 31, 2021 resulting in an estimated net loss for both financial statement and tax purposes. Therefore, no current federal or state income tax expense has been recorded in the financial statements. Based on the Company’s history of generating operating losses and its anticipation of operating losses for the foreseeable future, the Company has determined that it is more likely than not that the tax benefits from those net operating losses would not be realized and a full valuation allowance against all deferred tax assets has been recorded. Should the Company’s assessment change, tax benefits associated with the historic net operating loss carryforwards could be limited due to future ownership changes. Prior to the Company’s corporate conversion in June 2021, the Company was organized as a limited liability company. As such, the Company was not a tax paying entity for federal income tax purposes and, therefore, no income tax expense has been recorded in the financial statements for the year ended December 31, 2020. Income or losses of the Company was passed through to the members for inclusion in their respective income tax returns. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains its cash balance in one financial institution. The balance is insured up to the maximum allowable by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant risk of loss on cash. At times, the cash balance may exceed the maximum insured limit of the FDIC. As of December 31, 2021, the Company had cash of approximately $13.0 million in U.S. bank accounts which was not fully insured by the FDIC. |
Guaranteed Payments to Members | Guaranteed Payments to Members Prior to the corporate conversion, guaranteed payments to members of the Company that were designated to represent reasonable compensation for services rendered were accounted for as Company expenses rather than an allocation of the Company’s net income. |
Research and Development | Research and Development The Company expenses research and development costs when incurred. At times, the Company may make cash advances for future research and development services. These amounts are deferred and expensed in the period the service is provided. The Company incurred research and development expenses in the amount of $2,030,177 and $2,202,979 for the years ended December 31, 2021 and 2020, respectively. |
Share-Based Compensation | Share-Based Compensation The Company accounts for the cost of services performed by officers and directors received in exchange for an award of Company membership interests, common stock or stock options, based on the grant-date fair value of the award. The Company recognizes compensation expense based on the requisite service period. Compensation expense associated with stock option awards is recognized over the requisite service period based on the fair value of the option at the grant date determined based on the Black-Scholes option pricing model. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model. Because there is no public market for the Company’s stock options and very little historical experience with the Company’s stock, similar public companies were used for the comparison of volatility and the dividend yield. The risk-free rate of return was derived from U.S. Treasury notes with comparable maturities |
Share-Based Payments to Vendors | Share-Based Payments to Vendors The Company accounts for the cost of services performed by vendors in exchange for an award of Company membership interests, common stock, or stock options, based on the grant-date fair value of the award or the fair value of the services rendered; whichever is more readily determinable. Such fair value is measured as of the date the services or the date performance by the other party is complete. The Company recognizes the expense in the same period and in the same manner as if the Company had paid cash for the services. |
Major Vendor | Major Vendor The Company had a major vendor that accounted for approximately 42% and 40% of the research and development expenditures for the years ended December 31, 2021 and 2020, respectively. The same vendor also accounted for approximately 5% and 6% of the total accounts payable and accrued expenses as of December 31, 2021 and 2020, respectively. The Company continues to maintain this vendor relationship and anticipates incurring significant expenses with this vendor over the next 12 months. The Company had an additional major vendor in 2021 that accounted for approximately 15% of the research and development expenditures for the year ended December 31, 2021. The same vendor did not account for any portion of accounts payable and accrued expenses. The Company continues to maintain this vendor relationship and anticipates incurring significant expenses with this vendor over the next 12 months. |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
Summary of accounts payable and accrued expenses | December 31, 2021 December 31, 2020 Accrued compensation expenses $ 508,343 $ 317,068 Accrued research and development 229,090 89,156 Accrued professional fees 43,102 49,707 Other accounts payable and accrued expenses 63,374 — Total $ 843,909 $ 455,931 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |
Schedule of unvested Class A membership interest converted to common stock and associated activity | Class A Membership Interests Converted to common stock at one-for-two ratio Unvested at December 31, 2020 200,463 Vested (200,463) Unvested at December 31, 2021 — |
Schedule of fair value of options using Black-Scholes option pricing model | Year Ended December 31, 2021 Expected term 6.2 Volatility 93 % Dividend yield — % Risk-free interest rate 1.09 % Weighted average grant date fair value $ 4.72 |
Schedule of stock option activity | Year Ended Weighted Average December 31, 2021 Exercise Price Outstanding at the beginning of the period — Granted 2,357,500 $ 6.21 Vested (930,833) $ 6.22 Exercised — Forfeited — Outstanding and expected to vest 1,426,667 $ 6.20 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Schedule of components of net deferred income tax asset | The components of the net deferred income tax asset at December 31, 2021 are as follows: 2021 Deferred tax assets: Net operating loss carryforwards $ 1,594,650 Share‑based compensation 1,149,720 Research and development credit carryforwards 105,881 Gross deferred tax assets 2,850,251 Less valuation allowance (2,850,251) Net deferred tax asset $ — |
Summary of reconciliation of income tax expense (benefit) at the statutory Federal income tax rate and income taxes as reflected in the financial statements | A reconciliation of income tax expense (benefit) at the statutory Federal income tax rate and income taxes as reflected in the financial statements for both years ended December 31, 2021 is as follows: Federal income tax expense at statutory rate 21.0 % State income tax, net of federal benefit 5.1 Permanent differences — Research and development tax credit 1.0 Change in valuation allowance (27.1) Effective income tax rate — % |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) - USD ($) | Jun. 29, 2021 | Feb. 28, 2018 | Dec. 31, 2021 | Dec. 21, 2021 | Dec. 31, 2020 | Mar. 29, 2019 |
Nature of Operations [Line Item] | ||||||
Initial Public Offering, net of cash issuance costs (in shares) | 2,875,000 | |||||
Share price | $ 2 | |||||
Gross proceeds | $ 17,300,000 | $ 14,797,132 | ||||
Cash | $ 12,958,846 | $ 3,175,411 | ||||
IPO | ||||||
Nature of Operations [Line Item] | ||||||
Exercise price | $ 7.50 | |||||
Share price | $ 6 | |||||
Gross proceeds | $ 14,800,000 | |||||
ACX362E | ||||||
Nature of Operations [Line Item] | ||||||
Achieve Milestone payment | $ 700,000 | |||||
Royalty payments | $ 50,000 | |||||
Percentage of royalty payments on net sales | 4.00% | |||||
ACX362E | Members' Equity, Class B | ||||||
Nature of Operations [Line Item] | ||||||
Cash paid | $ 110,174 | |||||
Granting (in shares) | 100,000 | |||||
Exercise price | $ 0.10 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Effective tax rate | 0.00% | |
Current federal or state income tax expense | $ 0 | |
Income tax expense | $ 0 | |
Cash insured by Federal Deposit Insurance Corporation | $ 13,000,000 | |
Percentage of major vendor research and development expenditures | 42.00% | 40.00% |
Percentage of major vendor accounts payable and accrued expenses | 5.00% | 6.00% |
Research and Development Expense | $ 2,030,177 | $ 2,202,979 |
Percentage of additional major vendor research and development expenditures | 15.00% |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||
Accrued compensation expenses | $ 508,343 | $ 317,068 |
Accrued research and development | 229,090 | 89,156 |
Accrued professional fees | 43,102 | 49,707 |
Other accounts payable and accrued expenses | 63,374 | |
Total | $ 843,909 | $ 455,931 |
PAYCHECK PROTECTION PROGRAM L_2
PAYCHECK PROTECTION PROGRAM LOAN (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
May 31, 2020 | Dec. 31, 2021 | |
Short-term Debt [Line Items] | ||
Gain on Forgiveness of Paycheck Protection Program Loan | $ 66,503 | |
Paycheck Protection Program Loan | ||
Short-term Debt [Line Items] | ||
Principal amount outstanding on loans securitized or asset-backed financing arrangement | $ 66,503 | |
Annual interest rate | 0.98% | |
Gain on Forgiveness of Paycheck Protection Program Loan | $ 66,503 |
EXECUTIVE COMPENSATION (Details
EXECUTIVE COMPENSATION (Details) | Jun. 29, 2021item | Jan. 31, 2021itemshares | Jan. 31, 2020$ / sharesshares | Dec. 31, 2021item$ / sharesshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Mar. 29, 2019$ / shares |
Increase in equity debt offerings | $ | $ 2,500,000 | |||||||
Cash awards grant amount | $ | $ 2,500,000 | |||||||
Accrued deferred compensation | $ | $ 104,000 | |||||||
Share issued price per share | $ / shares | $ 2 | |||||||
Number of executives not received compensation | item | 3 | |||||||
Number of executives amended agreement | item | 3 | |||||||
Members' Equity, Class A | ||||||||
Number of executive receive compensation | item | 2 | |||||||
Base salary | $ | $ 277,000 | |||||||
Labor and Related Expense | $ | $ 0 | $ 7,500 | ||||||
Shares issued | shares | 38,353 | 312,680 | 57,430 | 244,860 | ||||
Share issued price per share | $ / shares | $ 2.50 | $ 3.25 | ||||||
Number of executives not received compensation | item | 2 | |||||||
Number of executives amended agreement | item | 3 |
EXECUTIVE COMPENSATION - Additi
EXECUTIVE COMPENSATION - Additional Information (Details) | 1 Months Ended | 12 Months Ended |
Jun. 30, 2021itemshares | Dec. 31, 2021$ / sharesshares | |
Granted | 2,357,500 | |
Profits interest exercise price | $ / shares | $ 3.25 | |
Members' Equity, Class B | ||
Granted | 1,540,000 | |
Number of executives pursuant to new employment | item | 3 | |
Members' Equity, Class B | Non-Employee | ||
Granted | 75,000 | |
Members' Equity, Class B | Common Stock | ||
Purchase to grants in options | 770,000 |
ISSUANCE OF EQUITY INTERESTS (D
ISSUANCE OF EQUITY INTERESTS (Details) - USD ($) | Dec. 21, 2021 | Jun. 29, 2021 | Jun. 23, 2021 | Oct. 16, 2020 | Jul. 20, 2020 | Jan. 06, 2020 | Oct. 18, 2019 | Aug. 08, 2019 | Mar. 29, 2019 | Oct. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Jan. 31, 2020 |
Class of Warrant or Right [Line Items] | ||||||||||||||
Share issued price per share | $ 2 | |||||||||||||
Percentage of private placement offerings warrant coverage | 50.00% | |||||||||||||
Units Issued During Period Shares New Issues | 182,002 | 483,501 | 1,248,750 | 277,000 | ||||||||||
Common stock, Authorized (in shares) | 200,000,000 | 200,000,000 | ||||||||||||
Common stock, Outstanding (in shares) | 10,215,792 | |||||||||||||
Initial Public Offering, net of cash issuance costs (in shares) | 2,875,000 | |||||||||||||
Proceeds from Initial Public Offering, net of issuance costs | $ 17,300,000 | $ 14,797,132 | ||||||||||||
Cash issuance cost | $ 2,452,868 | $ 51,409 | ||||||||||||
Converted shares of common stock | 7,041,208 | |||||||||||||
Expected term | 6 years 2 months 12 days | |||||||||||||
Risk-free interest rate | 1.09% | |||||||||||||
Warrant | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of warrants | 10,077 | |||||||||||||
Exercise price | $ 2.88 | $ 3.25 | ||||||||||||
Expected term | 10 years | |||||||||||||
Risk-free interest rate | 0.32% | |||||||||||||
Exercise price | $ 3.25 | |||||||||||||
Members' Equity, Class A | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Share issued price per share | $ 3.25 | $ 2.50 | ||||||||||||
Number of shares called by Warrant | 1 | |||||||||||||
Number of warrants | 0.5 | |||||||||||||
Units Issued During Period Shares New Issues | 277,000 | |||||||||||||
Proceeds From Issuance Of Private Placement | $ 554,000 | |||||||||||||
Exercise price | $ 2 | |||||||||||||
Warrant exercisable term | 10 years | |||||||||||||
Converted shares of common stock | 14,082,318 | |||||||||||||
Warrants Converted to Purchase Common Stock | 1,437,577 | |||||||||||||
Members' Equity, Class A | Maximum | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Units Issued During Period Shares New Issues | 138,500 | |||||||||||||
Members' Equity, Class B | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Converted shares of common stock | 7,041,208 | |||||||||||||
Members' Equity, Class A and Class B | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Converted shares of common stock | 14,082,318 | |||||||||||||
Private Placement | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of warrants | 0 | 0 | ||||||||||||
Private Placement | Members' Equity, Class A | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Share issued price per share | $ 3.25 | $ 3.25 | $ 2.50 | $ 2 | $ 2 | |||||||||
Number of shares called by Warrant | 1 | 1 | 1 | |||||||||||
Number of warrants | 0.25 | 1 | 1 | |||||||||||
Units Issued During Period Shares New Issues | 705,727 | 533,900 | 182,002 | 483,501 | 1,248,750 | |||||||||
Proceeds From Issuance Of Private Placement | $ 2,293,613 | $ 1,735,175 | $ 455,005 | $ 967,000 | $ 2,497,500 | |||||||||
Exercise price | $ 2.50 | $ 2 | $ 2 | |||||||||||
Warrant exercisable term | 10 years | 10 years | 10 years | |||||||||||
Private Placement | Members' Equity, Class A | Maximum | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Units Issued During Period Shares New Issues | 45,501 | 241,751 | 624,375 | |||||||||||
Private Placement One | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Share Price | $ 1 | |||||||||||||
Private Placement Two | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Share Price | $ 1.50 | |||||||||||||
IPO | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Share issued price per share | $ 6 | |||||||||||||
Units Issued During Period Shares New Issues | 2,875,000 | |||||||||||||
Exercise price | $ 7.50 | |||||||||||||
Warrant exercisable term | 4 years 6 months | |||||||||||||
Proceeds from Initial Public Offering, net of issuance costs | $ 14,800,000 | |||||||||||||
Cash issuance cost | $ 2,400,000 | |||||||||||||
Warrants issued to Underwriter | 150,000 | |||||||||||||
Fair value of Warrants | $ 618,000 | |||||||||||||
Expected term | 4 years 6 months | |||||||||||||
Risk-free interest rate | 0.79% | |||||||||||||
Exercise price | $ 6.26 | |||||||||||||
volatility rate | 94.00% |
SHARE-BASED COMPENSATION - Unve
SHARE-BASED COMPENSATION - Unvested Class A membership interests conversion (Details) - Members' Equity, Class A | 12 Months Ended |
Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested at December 31, 2020 | 200,463 |
Vested | (200,463) |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Option pricing model (Details) | 12 Months Ended |
Dec. 31, 2021$ / shares | |
SHARE-BASED COMPENSATION | |
Expected term | 6 years 2 months 12 days |
Volatility | 93.00% |
Risk-free interest rate | 1.09% |
Weighted average grant date fair value | $ 4.72 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock option activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Granted | 2,357,500 | |
Vested | 930,833 | |
Outstanding and expected to vest | 1,426,667 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted Average Exercise price, Beginning of the period | $ 6.20 | |
Weighted Average Exercise price, granted | $ 4.72 | $ 6.21 |
Weighted Average Exercise price, Vested | 6.22 | |
Weighted Average Exercise price, End of the period | $ 6.20 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2021 | Jul. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Profits interest exercise price | $ 3.25 | |||||
Weighted average value of membership interests | $ 2.14 | |||||
Share based compensation expense | $ 755,556 | $ 695,833 | ||||
Stock options granted | 2,357,500 | |||||
General and Administrative | $ 10,784,023 | $ 2,397,059 | ||||
Total compensation expense not yet recognized | $ 6,726,367 | |||||
Weighted average vesting period | 2 years 5 months | |||||
Intrinsic value of stock option | $ 0 | |||||
Weighted average contractual life | 6 months | 9 years 5 months | ||||
Exercise price | $ 4.72 | $ 6.21 | ||||
Over 36 months | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 60.00% | |||||
2021 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares reserved | 2,000,000 | |||||
Common stock shares available for issuance | 239,305 | |||||
Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
General and Administrative | $ 2,019,325 | |||||
Vesting percentage | 40.00% | |||||
Exercise price | $ 6.18 | $ 6.26 | ||||
Employee Stock | Executive officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted | 1,550,000 | |||||
General and Administrative | $ 2,379,833 | |||||
Employee Stock | Executive And Non-employee management team | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted | 807,500 |
SHARE-BASED PAYMENTS TO VENDO_2
SHARE-BASED PAYMENTS TO VENDORS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Granted | 2,357,500 | ||
General and Administrative | $ 10,784,023 | $ 2,397,059 | |
Research and Development | $ 2,030,177 | 2,202,979 | |
Fair value of share granted | $ 4.72 | ||
Share Based Payments To Vendor | |||
General and Administrative | $ 201,375 | 338,802 | |
Research and Development | $ 21,596 | $ 233,311 | |
Members' Equity, Class A | |||
Granted | 150,000 | 30,145 | 147,413 |
Fair value of share granted | $ 2 |
SHARE-BASED PAYMENTS TO VENDO_3
SHARE-BASED PAYMENTS TO VENDORS - Company Grants (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Granted | 2,357,500 | ||
Share based compensation expense | $ 755,556 | $ 695,833 | |
Total compensation expense not yet recognized | $ 6,726,367 | ||
Members' Equity, Class A | |||
Granted | 150,000 | 30,145 | 147,413 |
General and Administrative Expense | |||
Share based compensation expense | $ 125,000 | $ 150,000 |
SHARE-BASED PAYMENTS TO VENDO_4
SHARE-BASED PAYMENTS TO VENDORS - Warrants (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Dec. 31, 2021 | Jun. 29, 2021 | Dec. 31, 2020 | |
Expected term | 6 years 2 months 12 days | |||
Risk-free interest rate | 1.09% | |||
Warrant | ||||
Number of warrants issued (in shares) | 10,077 | |||
Warrant term | 10 years | |||
Exercise price of warrants | $ 3.25 | $ 2.88 | ||
Expected term | 10 years | |||
Risk-free interest rate | 0.32% | |||
Exercise price | $ 3.25 | |||
Volatility rate | 94.00% | |||
Issuance of warrants | $ 23,177 |
SHARE-BASED PAYMENTS TO VENDO_5
SHARE-BASED PAYMENTS TO VENDORS - Agreements with Vendors (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share based compensation expenses | $ 755,556 | $ 695,833 | |||
Weighted average contractual life | 6 months | 9 years 5 months | |||
Selling, General and Administrative | $ 208,270 | ||||
Granted | 2,357,500 | ||||
General and Administrative | $ 10,784,023 | $ 2,397,059 | |||
Vendors | |||||
Available for grants | 35,695 | ||||
Maximum | |||||
Weighted average contractual life | 6 months | ||||
Minimum | |||||
Weighted average contractual life | 3 years | ||||
Stock Options | |||||
Available for grants | 100,000 | ||||
Share based compensation expenses | $ 343,500 | ||||
Common Stock | |||||
Available for grants | 13,889 | 175,000 | |||
Share based compensation expenses | $ 150,000 | ||||
General and Administrative | $ 75,000 |
INCOME TAXES - Schedule of comp
INCOME TAXES - Schedule of components of net deferred income tax asset (Details) | Dec. 31, 2021USD ($) |
Deferred tax assets: | |
Net operating loss carryforwards | $ 1,594,650 |
Sharebased compensation | 1,149,720 |
Research and development credit carryforwards | 105,881 |
Gross deferred tax assets | 2,850,251 |
Less valuation allowance | $ (2,850,251) |
INCOME TAXES - Summary of recon
INCOME TAXES - Summary of reconciliation of income tax expense (benefit) at the statutory Federal income tax rate and income taxes as reflected in the financial statements (Details) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Federal income tax expense at statutory rate | 21.00% |
State income tax, net of federal benefit | 5.10% |
Research & Development tax credit | 1.00% |
Change in valuation allowance | (27.10%) |
Effective income tax rate | 0.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Millions | Dec. 31, 2021USD ($) |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforward | $ 6.1 |
Research Tax credit carryforward | |
Operating Loss Carryforwards [Line Items] | |
Research Tax credit carryforward | $ 0.1 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | Jun. 29, 2021 | Jun. 23, 2021 | Dec. 31, 2021 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Converted shares of common stock | 7,041,208 | ||
Members' Equity, Class A | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Converted shares of common stock | 14,082,318 | ||
Members' Equity, Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Converted shares of common stock | 7,041,208 | ||
Members' Equity, Class A and Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Converted shares of common stock | 14,082,318 | ||
Warrant | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive shares | 1,588,477 | ||
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive shares | 2,357,500 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |||
Total related party expenses | $ 15,000 | ||
Related party expenses | $ 7,500 | $ 7,500 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - ACX362E | 1 Months Ended |
Feb. 28, 2018USD ($) | |
Product Liability Contingency [Line Items] | |
Achieve Milestone payment | $ 700,000 |
Royalty payments | $ 50,000 |
Percentage of royalty payments on net sales | 4.00% |