Document and Entity Information
Document and Entity Information - USD ($) | 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 Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-39811 | ||
Entity Registrant Name | Virios Therapeutics, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-4314201 | ||
Entity Address, Address Line One | 44 Milton Avenue | ||
Entity Address, City or Town | Alpharetta | ||
Entity Address State Or Province | GA | ||
Entity Address, Postal Zip Code | 30009 | ||
City Area Code | 866 | ||
Local Phone Number | 620-8655 | ||
Title of 12(b) Security | Common Stock, $0.0001 Par Value per Share | ||
Trading Symbol | VIRI | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 46,801,675.92 | ||
Entity Common Stock, Shares Outstanding | 8,330,390 | ||
Entity Central Index Key | 0001818844 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Dixon Hughes Goodman LLP | ||
Auditor Firm ID | 57 | ||
Auditor Location | Atlanta, Georgia |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 14,008,184 | $ 29,795,366 |
Prepaid expenses and other current assets | 1,768,503 | 1,677,365 |
Total current assets | 15,776,687 | 31,472,731 |
Total assets | 15,776,687 | 31,472,731 |
Current liabilities: | ||
Accounts payable | 353,863 | 368,905 |
Accrued expenses | 921,760 | 784,104 |
Accrued salaries | 0 | 378,833 |
Total current liabilities | 1,275,623 | 1,531,842 |
Total liabilities | 1,275,623 | 1,531,842 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 43,000,000 shares authorized, 8,330,390 and 8,305,075 shares issued and outstanding at December 31, 2021 and 2020, respectively | 833 | 830 |
Preferred stock, $0.0001 par value; 2,000,000 shares authorized, no shares issued and outstanding at December 31, 2021 and 2020 | ||
Additional paid-in capital | 58,425,604 | 57,905,164 |
Accumulated deficit | (43,925,373) | (27,965,105) |
Total stockholders' equity | 14,501,064 | 29,940,889 |
Total liabilities and stockholders' equity | $ 15,776,687 | $ 31,472,731 |
BALANCE SHEETS (Parentheticals)
BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 43,000,000 | 43,000,000 |
Common stock issued (in shares) | 8,330,390 | 8,305,075 |
Common stock outstanding (in shares) | 8,330,390 | 8,305,075 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
STATEMENTS OF OPERATIONS | ||
Revenue | ||
Operating expenses: | ||
Research and development | 10,795,688 | 194,013 |
General and administrative expenses | 4,845,252 | 9,811,381 |
Total operating expenses | 15,640,940 | 10,005,394 |
Loss from operations | (15,640,940) | (10,005,394) |
Other (expense) income: | ||
Interest income (expense), net | 5,672 | (384,222) |
Other (expense) income | 43,221 | |
Other (expense) income | (325,000) | |
Total other expense | (319,328) | (341,001) |
Loss before income taxes | (15,960,268) | (10,346,395) |
Net loss | $ (15,960,268) | $ (10,346,395) |
Basic net loss per share | $ (1.92) | $ (2.10) |
Diluted net loss per share | $ (1.92) | $ (2.10) |
Weighted average number of shares outstanding - basic | 8,329,310 | 4,926,985 |
Weighted average number of shares outstanding - diluted | 8,329,310 | 4,926,985 |
STATEMENTS OF MEMBERS' STOCKHOL
STATEMENTS OF MEMBERS' STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Members InterestsNonvoting Common Stock | Members InterestsVoting Common Stock | Accumulated Deficit | Total |
Balances, Beginning at Dec. 31, 2019 | $ 12,601,201 | $ (17,618,710) | $ (5,017,509) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Membership conversion to voting interests | $ (12,601,201) | $ 12,601,201 | ||||
Conversion of convertible promissory notes | 2,673,800 | 2,673,800 | ||||
Equity-based compensation expense | 2,000,000 | 2,000,000 | ||||
Conversion of convertible promissory notes upon corporate conversion | 3,434,457 | 3,434,457 | ||||
Equity payment of accrued salaries | 536,880 | 536,880 | ||||
Corporate conversion at initial public offering | $ 483 | $ 21,245,855 | $ (21,246,338) | |||
Corporate conversion at initial public offering (shares) | 4,832,494 | |||||
Issuance of common shares for IPO, net of costs | $ 345 | 31,053,543 | 31,053,888 | |||
Issuance of common shares for IPO, net of costs (shares) | 3,450,000 | |||||
Share-based compensation expense | 5,429,518 | 5,429,518 | ||||
Exercise of warrants | $ 2 | 176,248 | 176,250 | |||
Exercise of warrants (in shares) | 22,581 | |||||
Net loss | (10,346,395) | (10,346,395) | ||||
Balances, Ending at Dec. 31, 2020 | $ 830 | 57,905,164 | (27,965,105) | 29,940,889 | ||
Balances, Ending (in shares) at Dec. 31, 2020 | 8,305,075 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 322,881 | 322,881 | ||||
Exercise of warrants | $ 3 | 197,559 | 197,562 | |||
Exercise of warrants (in shares) | 25,315 | |||||
Net loss | (15,960,268) | (15,960,268) | ||||
Balances, Ending at Dec. 31, 2021 | $ 833 | $ 58,425,604 | $ (43,925,373) | $ 14,501,064 | ||
Balances, Ending (in shares) at Dec. 31, 2021 | 8,330,390 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (15,960,268) | $ (10,346,395) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of issuance costs | 0 | 53,983 |
Recovery of uncollectable receivables | (15,020) | |
Gain on vendor concession | (43,221) | |
Share-based and equity compensation expense | 322,881 | 7,429,518 |
Changes in operating assets and liabilities: | ||
Increase in prepaid expenses and other current assets | (91,138) | (1,655,829) |
Increase in accounts payable | 270,007 | 51,560 |
Increase in accrued expenses | 147,773 | 774,496 |
Decrease in accrued salaries | (378,833) | (144,287) |
Net cash used in operating activities | (15,689,578) | (3,895,195) |
Cash flows from financing activities | ||
Proceeds from initial public offering, net of costs | (295,166) | 31,349,055 |
Proceeds from issuance of convertible promissory notes | 1,994,133 | |
Proceeds from the exercise of warrants | 197,562 | 176,250 |
Payment of issuance costs for promissory notes | (63,261) | |
Payment of preferred members' interest | (75,000) | |
Net cash (used in) provided by financing activities | (97,604) | 33,381,177 |
Net (decrease) increase in cash | (15,787,182) | 29,485,982 |
Cash, beginning of period | 29,795,366 | 309,384 |
Cash, end of period | $ 14,008,184 | 29,795,366 |
Supplemental disclosure of non-cash financing transactions: | ||
Cash paid for interest | 12,551 | |
Non-cash financing transactions: | ||
Public offering costs included in accounts payable and accrued expenses | 295,166 | |
Conversion of members' interest into common stock at corporate conversion | 21,246,338 | |
Conversion of non-voting members' interest to voting members' interest | 12,601,201 | |
Payment of accrued salaries through issuance of members' interest | 536,880 | |
Conversion of convertible promissory notes and accrued interest into membership interests, net of unamortized deferred costs of $41,445 | $ 6,108,257 |
STATEMENTS OF CASH FLOWS (Paren
STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) | Dec. 31, 2021 | Dec. 16, 2020 |
STATEMENTS OF CASH FLOWS | ||
Unamortized deferred cost | $ 41,445 | $ 41,445 |
Background and Organization
Background and Organization | 12 Months Ended |
Dec. 31, 2021 | |
Background and Organization | |
Background and Organization | 1. Background and Organization Virios Therapeutics, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on December 16, 2020 through a corporate conversion (the “Corporate Conversion”) just prior to the Company’s initial public offering (“IPO”). The Company was originally formed on February 28, 2012 as a limited liability company (“LLC”) under the laws of the State of Alabama as Innovative Med Concepts, LLC. On July 23, 2020, the Company changed its name from Innovative Med Concepts, LLC to Virios Therapeutics, LLC. The Company is a pre-revenue, development-stage biotechnology company focused on advancing novel antiviral therapies to treat diseases associated with a viral triggered abnormal immune response. The Company is developing its initial product, IMC-1, for people who are suffering from fibromyalgia (“FM”). Research has shown that the herpes virus could be a root cause of FM. IMC-1 is a novel, proprietary, fixed dose combination of famciclovir and celecoxib, both of which are drugs approved by the U.S. Food and Drug Administration (“FDA”) for other indications. IMC-1 combines these two specific mechanisms of action purposely designed to inhibit herpes virus activation and replication, thereby keeping the herpes virus in a latent or dormant state. The famciclovir component of IMC-1 inhibits viral DNA replication, thus inhibiting upregulation of the herpes virus. The celecoxib component of IMC-1 inhibits cyclooxegenase-2 (“COX-2”) enzymes used by the herpes virus to amplify or accelerate its own replication. IMC-1’s synergistic antiviral mechanism represents a first-in-class medicine designed specifically to inhibit both herpes virus activation and subsequent replication, with the goal of keeping tissue resident herpes virus in a latent state. Corporate Conversion On December 16, 2020, immediately prior to the effectiveness of the Company’s registration statement on Form S-1, the Company converted into a Delaware corporation pursuant to a statutory conversion, and changed its name from Virios Therapeutics, LLC to Virios Therapeutics, Inc. As a result of the Corporate Conversion, all of the membership interests held by the existing members of Virios Therapeutics, LLC converted into shares of common stock of Virios Therapeutics, Inc. The purpose of the Corporate Conversion was to reorganize the corporate structure so that the entity offering common stock to the public was a corporation rather than a limited liability company. Initial Public Offering On December 16, 2020, the Company announced the pricing of its IPO of 3,000,000 shares of its common stock at an initial offering price of $10.00 per share. In addition, the Company granted the underwriters a 45 -day option to purchase up to an additional 450,000 shares of common stock at the public offering price. The Company’s common stock commenced trading on The Nasdaq Capital Market on December 17, 2020 under the ticker symbol “VIRI”. The IPO closed on December 21, 2020 at which time the underwriters exercised their option to purchase 450,000 additional shares of the Company’s common stock bringing the total number of shares of common stock sold by the Company to 3,450,000 shares. The gross proceeds from the IPO, including proceeds from the exercise of the underwriters’ option to purchase additional shares, were $34.5 million. The net proceeds of the IPO were approximately $31.1 million after deducting underwriting discounts, commissions and offering expenses payable by the Company, including offering costs accrued and unpaid as of December 31, 2020. In conjunction with the IPO, the Company granted the underwriters 172,500 warrants to purchase shares of the Company’s common stock at an exercise price of $12.50 per share, which is 125% of the initial public offering price. Material Uncertainty Since its founding, the Company has been engaged in organizational activities, including raising capital, and research and development activities. The Company has not generated any revenues to date. As such, the Company is subject to all of the risks associated with any development-stage biotechnology company that has substantial expenditures for research and development. Since inception, the Company has incurred losses and negative cash flows from operating activities. The Company does not expect to generate positive cash flows from operating activities in the near future. For the years ended December 31, 2021 and 2020, the Company incurred net losses of $15,960,268 and $10,346,395, respectively, and had net cash flows used in operating activities of $15,689,578 and $3,895,195, respectively. As of December 31, 2021, the Company had an accumulated deficit of approximately $43.9 million and is expected to incur losses in the future as it continues its development activities. Since its inception, the Company has funded its losses primarily through issuance of members’ interests, convertible debt instruments and issuance of equity securities. As of the date these financial statements are issued, based on reasonable estimates, current cash is sufficient to fund foreseeable operating expenses and obligations for at least 12 months. The Company will need to raise additional capital within the next 13 to 18 months to complete clinical development of and to commercially develop its product candidates. There is no assurance that such financing will be available when needed or on acceptable terms. The financial statements do not include any adjustments to reflect this uncertainty. |
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 | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Use of Estimates The preparation of these financial statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company's significant estimates and assumptions include estimated work performed but not yet billed by contract manufacturers, engineers and research organizations, the valuation of equity and stock-based related instruments, and the valuation allowance related to deferred taxes. Some of these judgments can be subjective and complex, and, consequently, actual results could differ from those estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates. Segment Information The Company operates in one reportable segment based on management’s view of its business for purposes of evaluating performance and making operating decisions. Concentrations of Credit Risk Cash is potentially subject to concentrations of credit risk. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held. Fair Value Measurements ASC Topic 820, Fair Value Measurement The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. ● Level 3 — Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The carrying amount of the Company’s financial instruments, including cash, accounts payable and accrued expenses approximate their fair values. Cash Cash is maintained in bank deposit accounts, which exceed the federally insured limits of $250,000. The Company does not have any cash equivalents. Variable Interest Entities When determining whether a legal entity should be consolidated, the Company first determines whether it has a variable interest in the legal entity. If a variable interest exists, the Company determines whether the legal entity is a variable interest entity (“VIE”) due to either: 1) a lack of sufficient equity to finance its activities, 2) its equity holders lacking the characteristics of a controlling financial interest, or 3) the legal entity being structured with non-substantive voting rights. If the Company concludes that the legal entity is a VIE, the Company next determines whether it is the primary beneficiary due to it possessing both: 1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE which could be significant to the VIE. If the Company concludes that it is the primary beneficiary, it consolidates the entity. Equity Method Investment In 2017, the Company purchased a 25% ownership in Northriver Pharm, LLC (“NRP”) in the amount of $125,000 from existing investors of NRP. NRP is an entity with common ownership with the Company’s former Chief Executive Officer and Founder, who is also the Founder and sole voting member of NRP. The Company evaluated the ownership under VIE guidance and has determined that they do not have the power and economics to control the entity and are not the entity most closely associated with NRP. The Company previously accounted for the investment under the equity method of accounting. However, consistent with equity method accounting guidance, the Company has now discontinued applying the equity method accounting as the investment has been reduced to zero and the Company has not committed to provide further financial support and there is no expected return to profitable operations by NRP. Deferred Issuance Costs Deferred issuance costs are netted against amounts outstanding for the convertible promissory notes when the offering is completed. Expenditures incurred prior to the closing are capitalized as deferred issuance costs in non-current assets. There were no amounts capitalized prior to an offering as of December 31, 2021 and 2020. Upon closing, capitalized costs relating to debt offerings are recognized into interest expense over the terms of the instruments using the effective interest method. The Company recognized interest expense related to the amortization of issuance costs for the convertible promissory notes of $53,983 for the year ended December 31, 2020. The Company did not recognize any interest expense related to the amortization of issuance costs in 2021. Accrued Salaries Accrued salaries represented outstanding guaranteed payments to the Company’s former President and former Chief Executive Officer and Founder and were recognized when incurred and considered payable. These amounts were paid in 2021 and no amounts remained outstanding at December 31, 2021. Income Taxes The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company operated as an Alabama limited liability company until its Corporate Conversion. Therefore, the Company passed through all income and losses to its members until this point. As of December 31, 2021 and 2020, the Company had a full valuation allowance against deferred tax assets. The Company is subject to the provisions of ASC 740, Income Taxes Basic and Diluted Net Income (Loss) per Share Basic net loss per common share (“EPS”) is computed in accordance with U.S. GAAP. Basic EPS is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. For the years ended December 31, 2021 and 2020, the Company had 1,041,647 and 811,663 options, respectively, and 172,500 and 276,583 warrants, respectively, to purchase common shares outstanding that were anti-dilutive. EPS and weighted-average shares outstanding for the year ended December 31, 2020, have been computed to give effect to the Corporate Conversion that occurred December 16, 2020 prior to the Company’s initial public offering. In conjunction with the Corporate Conversion, all of the Company’s outstanding members’ equity automatically converted into shares of common stock, based on the relative rights of the Company's pre-IPO equity holders. Research and Development Research and development costs are expensed as incurred. The Company arranges and contracts with third-party contract research organizations (“CROs”), contract development and manufacturing organizations (“CMOs”), contractor laboratories and independent consultants. As part of the process of preparing its financial statements, the Company may be required to estimate some of its expenses resulting from its obligations under these arrangements and contracts. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided. The Company’s objective is to reflect the appropriate expenses in its financial statements by matching those expenses with the period in which services are rendered. The Company determines any accrual estimates based on account discussions with applicable personnel and outside service providers as to the progress or state of completion. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. The Company’s estimates are dependent upon the timely and accurate reporting of CROs, CMOs and other third-party vendors. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved, and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record prepaid or accrued expenses related to these costs. Equity and Share-Based Compensation The Company recognizes compensation expense relating to equity-based payments based on the fair value of the equity or liability instrument issued. For equity-based instruments, the expense is based upon the grant date fair value and recognized over the service period. For awards with a performance condition, compensation expense is recognized over the requisite service period if it is probable that the performance condition will be satisfied. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the Company had paid cash for the goods or services. The Company estimates the fair value of options and warrants granted using an options pricing model, see Note 11. Expense is recognized within general and administrative expenses and forfeitures are recognized as they are incurred. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided by the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | 3. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: December 31, December 31, 2021 2020 Prepaid insurance $ 1,329,385 $ 1,586,042 Prepaid clinical research costs 422,591 85,270 Prepaid services 15,664 5,729 Other miscellaneous current assets 863 324 $ 1,768,503 $ 1,677,365 |
License Agreement
License Agreement | 12 Months Ended |
Dec. 31, 2021 | |
License Agreement | |
License Agreement | 4. License Agreement The Company entered into a Know-How License Agreement (the “Agreement”) with the University of Alabama (“UA”) in 2012. In consideration for the Agreement, UA received a 10% non-voting membership interest in the Company. Upon the adoption of the May 1, 2020 Second Amended and Restated Operating Agreement, the non-voting membership interest converted to a voting membership interest as discussed in Note 7 below. Upon the Corporate Conversion, voting membership interest was converted into shares of common stock. The Agreement is in effect for 25 years and will terminate on June 1, 2037. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consist of the following: December 31, December 31, 2021 2020 Accrued compensation $ 532,678 $ 573,479 Accrued interest on preferred members’ interests 188,085 188,085 Accrued clinical research costs 138,522 — Accrued director fees 31,000 — Accrued professional fees 24,100 8,992 Other 7,375 13,548 $ 921,760 $ 784,104 |
Convertible Promissory Notes, N
Convertible Promissory Notes, Net | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Promissory Notes, Net | |
Convertible Promissory Notes, Net | 6. Convertible Promissory Notes, Net On March 31, 2020, June 10, 2020, and August 21, 2020, the Company completed and closed its first, second, and third round, respectively, of its fifth offering subscription (the “Fifth Offering”) for the issuance of convertible promissory notes (collectively with the promissory notes of the Fourth Offering, the “Notes”) for convertible preferred membership interests and received $1,162,500, $706,633, and $125,000, respectively. The terms of both the First Round and Second Round were substantially identical to those of the Third Round, except that the Third Round allowed the investors to convert the cash interest component into additional equity. There were no Notes outstanding as of December 31, 2020, after giving effect to the July 2020 and November 2020 maturity of Notes sold in the first and second rounds of its fourth offering subscription (the “Fourth Offering”) and the conversion of the remaining notes into membership interests prior to and in conjunction with the Corporate Conversion, at which time all of the Company’s outstanding membership interest converted into shares of common stock. The Notes bore interest at 8% per annum, with a maximum term of 18 months . The Notes were unsecured obligations and did not contain any financial covenants or restrictions on the payments to members, in incurrence of indebtedness, or the issuance or repurchase of securities by the Company. The Company recognized interest expense related to the Notes as follows: December 31, December 31, 2021 2020 Fourth Offering $ — $ 231,364 Fifth Offering — 98,634 $ — $ 329,998 In addition, each Note included warrant coverage of 25% of the principal value of the Note, which provided an option to purchase additional membership interests in cash at the same price as the conversion of the Note. The warrant coverage was exercisable on the conversion date, or within 30 days post conversion. If not exercised within this 30-day period, the warrant coverage was forfeited. The warrant coverage was evaluated to determine whether the arrangements were embedded or free-standing (i.e., to determine whether they needed to be bifurcated and accounted for as a separate financial instrument). However, since the warrants were only exercisable at the time of conversion or within None of the outstanding warrants of $366,250 were exercised within the 30-day exercise period post maturity of the July 20, 2020 Notes, and thus were forfeited. At the Corporate Conversion outstanding warrants of $231,250, relating to the maturity of the November 2020 Notes, were converted into 29,629 exercisable warrants of the Company’s common stock, of which 21,620 warrants were exercised within the 30-day At the Corporate Conversion, the remaining Notes matured. As a result, the aggregate outstanding principal amount of $3,279,133 plus accrued interest through the conversion date of December 16, 2020 of $196,769 converted into memberships interests based on the carrying value of the convertible debt, net of unamortized deferred offering costs of $41,445 with no gain or loss recognized. Accrued interest of $9,551 was paid in cash. Warrants totaling $820,033 were converted into 105,044 exercisable warrants of the Company’s common stock, of which 961 warrants were exercised and 104,083 were outstanding as of December 31, 2020. In January 2021, 25,315 of these warrants were exercised for $197,562. The remaining unexercised warrants of 78,768 expired on January 20, 2021. |
Members' Equity
Members' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Members' Equity | |
Members' Equity | 7. Members’ Equity On May 1, 2020, the Company adopted its Second Amended and Restated Operating Agreement (the “Amended Operating Agreement”). The Amended Operating Agreement changed the Company’s classes of membership from two classes (voting and non-voting) to one class of membership and gave the Company’s board of directors (the “Board”) the right to make all decisions concerning the business, affairs and properties of the Company. Under the Amended Operating Agreement, the members had the right to vote on the dissolution and termination of the Company, the removal of existing directors, the appointment of new directors, and any plan of conversion or merger. In July 2020, the Board approved two issuances of membership interests equal to an aggregate of 5.0% of the Company’s total membership interests to the Company’s founder. These issuances were considered equity-based compensation award grants that do not have any future service conditions. As a result, all compensation expense associated with such issuances were recognized upon issuance. In order to determine the amount of compensation associated with such issuances, the Company utilized recent observable prices under the terms of its Fifth Offering. For the year ended December 31, 2020, the Company recognized $2,000,000 of compensation expense for these issuances. In July 2020, the Notes issued in the first round of the Fourth Offering matured. As a result, the outstanding principal amount of $1,465,000 plus accrued interest of $172,800 converted into membership interest based on the carrying value of the convertible debt with no gain or loss recognized. Accrued interest of $3,000 was paid in cash. In November 2020, the Notes issued in the second round of the Fourth Offering matured. As a result, the outstanding principal amount of $925,000 plus accrued interest of $111,000 converted into membership interest based on the carrying value of the convertible debt with no gain or loss recognized. No accrued interest was paid in cash. At the Corporate Conversion, the remaining Notes matured. As a result, the aggregate outstanding principal amount of $3,279,133 plus accrued interest through the conversion date of December 16, 2020 of $196,769 converted into memberships interests based on the carrying value of the convertible debt, net of unamortized deferred offering costs of $41,445 with no gain or loss recognized. Accrued interest of $9,551 was paid in cash. In conjunction with the Corporate Conversion, all of the Company’s outstanding membership interests converted into shares of common stock. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity The Company’s certificate of incorporation adopted on December 16, 2020, authorizes the issuance of two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock”. The total number of shares which the Company is authorized to issue is 45,000,000, each with a par value Common Stock Dividends Subject to the rights of holders of all classes of Company stock outstanding having rights that are senior to or equivalent to holders of the Common Stock are entitled to receive dividends when and as declared by the Board. Liquidation Subject to the rights of holders of all classes of stock outstanding having rights that are senior to or equivalent to the holders of Common Stock as to liquidation, upon liquidation, dissolution or winding up of the Company, the assets of the Company will be distributed to the holders of the Common Stock. Voting The holders of the Common Stock are entitled to one vote for each share of Common Stock held. There is no cumulative voting. Preferred Stock Preferred Stock may be issued from time to time by the Board in one or more series. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Related Parties | |
Related Parties | 9 The Company uses Gendreau Consulting, LLC, a consulting firm (“Gendreau”), for drug development, clinical trial design, and planning, implementation and execution of contracted activities with CROs. Gendreau’s managing member became the Company’s Chief Medical Officer (“CMO”) effective January 1, 2021. The Company has and will continue to contract the services of the CMO’s spouse through the firm to perform certain activities in connect with the Company’s ongoing clinical trial in FM. During the years ended December 31, 2021 and 2020, the Company paid Gendreau $326,416 and $450, respectively, and had accounts payable of $24,840 and $7,916 to Gendreau as of December 31, 2021 and 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10 Litigation The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows. On August 26, 2021, Torreya Capital LLC (“Torreya”) filed a demand for arbitration with the American Arbitration Association in New York, New York in connection with a claim by Torreya that it is entitled to a transaction fee of $1,035,000 in connection with the Company’s IPO, plus the costs of arbitration, based on services Torreya alleges it provided for the Company as a financial advisor to the Company prior to the IPO. On December 20, 2021, in order to avoid the risk, inconvenience and expense of a continued dispute, the Company entered into a release and settlement agreement with Torreya, whereby the Company agreed to pay Torreya $325,000 for the release and discharge of any and all claims, liabilities and costs related to the arbitration. The Company paid the obligation prior to December 31, 2021, the cost of which is included in other expense in the accompanying statements of operations. Employment Agreement and Deferred Compensation Plan The Company has employment agreements with its CEO, SVP of Operations, and SVP of Finance (the “Executives”), as well as its CMO and Director of Clinical Operations (the “Director”). Per the terms of the agreements, each Executive, the CMO and the Director are entitled to receive a cash bonus with a target amount of no less than 50% for the CEO, 35% for the CMO and 20% for the SVP of Operations, the SVP of Finance, and the Director, of the then-current base salary. The bonuses are subject to achievement of annual bonus metrics set by the Board. The employment agreements will continue in effect until terminated by either party pursuant to its terms. Upon termination of the agreement by the Company for any reason other than for cause, death or disability or by one of the Executives, CMO or Director for good reason, the Company shall pay to an Executive a “Severance Payment” equal to the aggregate of the Executive’s then-current annual base salary plus an amount equal to a prorated portion of the Executive’s cash bonus for the year in which the termination occurs. The Severance Payment to an Executive is payable in cash over a period of one year . The Company shall pay to the CMO a Severance Payment equal to 25% of the then-current annual base salary plus a prorated portion of the CMO’s cash bonus for the year in which the termination occurs over a period of three months and health benefits for a period of 12 months unless the CMO becomes eligible for health benefits under another employer. If the termination of the agreement is related to a change of control, the Company shall pay to the Executives and the CMO a “Change of Control Termination Payment” equal to the aggregate of 1.0 times the then-current annual base salary plus an amount equal to 1.0 times the Executives’ and CMO’s cash bonus for year in which the termination occurs. The Change of Control Termination Payment for the Director is equal to the aggregate of 0.5 times the then-current annual base salary plus and amount equal to 0.5 times the Director’s cash bonus for the year in which the termination occurs. The Change of Control Termination Payments are payable in a single cash lump sum no later than 45 days after the triggering event. In July 2020, the Company entered into an agreement with Dr. William L. Pridgen, former Chief Executive Officer of the Company, for the payment and satisfaction of salary accrued and owed to Dr. Pridgen in the amount of $549,046 in a combination of equity and cash. Prior to the pricing of the Company’s IPO, the split between the equity portion and the cash portion was determined and the Company issued members interest for repayment of $336,880 of accrued salary. The remaining balance to be paid in cash of $212,166, less a salary advance of $100,000 previously paid to Dr. Pridgen, outstanding at December 31, 2020 was paid in January 2021. There were no amounts outstanding as of December 31, 2021. In August 2020, the Company amended the President’s executive employment agreement to provide for an equity bonus in the form of non-qualified stock options upon the completion of an IPO, in lieu of cash and in-kind bonuses that were provided for in the original agreement. In addition to the equity bonus, the President was to participate in the Company’s executive bonus program alongside and to the same extent the other executives were awarded and paid such bonuses at a target rate of 50% of his base salary. A previously paid bonus advance of $150,000 offset the equity bonus options granted. The Company also owed the President accrued salary in the amount of $466,667 . The President was issued members interest for repayment of $200,000 of accrued salary just prior to the pricing of the IPO on December 16, 2020. The remaining balance of $266,667 to be paid in cash outstanding at December 31, 2020 was paid in January 2021. There were no amounts outstanding as of December 31, 2021. Upon the pricing of the Company’s IPO, the President resigned and was appointed to the Company’s Board. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based compensation | |
Share-based compensation | 11. Share-Based Compensation Equity Incentive Plan The Company’s 2020 Equity Incentive Plan (the “Plan”) became effective on December 21, 2020. Under the Plan, 812,500 shares are authorized to be issued. As of December 31, 2021 and 2020, 63,353 and 293,337 shares, respectively, were available for future grants. The Plan provides for grants to employees, members of the Board, consultants and advisors to the Company, in the form of stock awards, options, and other equity-based awards. The amount and terms of grants are determined by the Board. Stock options have a maximum term of 10 years The table below sets forth the outstanding options to purchase common shares under the Plan: Weighted Average Weighted Remaining Average Contractual Number of Exercise Term Shares Price (Years) Outstanding at December 31, 2019 — $ — — Granted 519,163 10.00 — Outstanding at December 31, 2020 519,163 $ 10.00 9.98 Granted 229,984 6.85 — Outstanding at December 31, 2021 749,147 $ 9.03 9.09 Exercisable at December 31, 2021 542,971 $ 9.85 9.00 As of December 31, 2021 and 2020, the aggregate intrinsic value of options outstanding and exercisable was $0. During the year ended December 31, 2021, the Company granted certain individuals options to purchase 229,984 shares of the Company’s common stock with an average exercise price of $6.85 per share, contractual terms of 10 years and vesting periods ranging from 8.33% monthly over one year to 33.333% vesting after one year with the remaining 66.667% vesting in 24 monthly installments, thereafter. The options had an aggregate grant date fair value of $1,150,284 as calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rates ranging from 0.505% to 1.075% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected lives ranging from 5.27 years to 6.0 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility ranging from 89.04% to 90.16% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock ranging from $6.50 to $7.51 per share. Upon the closing of the Company’s IPO, the Company granted options to employees, pursuant to their individual employment agreements, to purchase 519,163 shares of the Company’s common stock with an exercise price of $10.00 per share and a contractual term of 10 years . The options were 100% vested at the grant date. The options had an aggregate grant date fair value of $3,441,687 as calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 0.39% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.0 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 88.3% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $9.80 per share. For the years ended December 31, 2021 and 2020, the Company recognized share-based compensation expense related to stock options of $322,881 and $3,441,687, respectively. The unrecognized compensation expense for stock options at December 31, 2021 was $827,402 and there was no unrecognized compensation expense related to stock options at December 31, 2020 as the granted options were 100% vested upon issuance. Stock Options for Unregistered Securities In addition to the stock options issued under the Plan, and in conjunction with the IPO, the Company granted non-qualified stock options to purchase 292,500 shares of common stock as provided for in the President’s employment agreement (the “President Options”). The President Options are exercisable within 10 years of the date of grant at $10.00 per share, were 100% vested at the grant date and have a remaining contractual term of 8.96 years. The options had an aggregate grant date fair value of $1,987,831 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 0.37% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.0 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 88.3% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $10.00 per share. The Company recognized share-based compensation expense of $1,987,831 during 2020 related to the stock options. As of December 31, 2021 and 2020, there was no unrecognized compensation expense related to these options as they were 100% vested upon issuance. The shares of common stock issuable upon exercise of the President Options will be unregistered, and the option agreement does not include any obligation on the part of the Company to register such shares of common stock. Consequently, the Company has not recognized a contingent liability associated with registering the securities for the arrangement. As of December 31, 2021, the aggregate intrinsic value of the President Options was $0. Underwriters Warrants In conjunction with the IPO, the Company granted the underwriters warrants to purchase 172,500 shares of common stock at an exercise price of $12.50 per share. The warrants have a five-year contractual term and were not exercisable prior to December 21, 2021. The Company has accounted for the warrants as equity-based awards issued to a non-employee. The warrants had an aggregate grant date fair value of $1,108,785 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 0.37% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.0 years, (3) expected volatility of 88.3% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $10.00 per share. There was no net impact recognized by the Company in the accompanying financial statements as the warrants were equity-based awards issued for services rendered by the underwriter for the IPO that was offset by the Company recognizing the fair value of the warrants as a direct and incremental costs associated with the IPO by reducing paid-in capital for the same amount. There is no unrecognized compensation expense for these awards as of December 31, 2020. As of December 31, 2021, the warrants have a remaining contractual term of 3.96 years and are 100% exercisable. The aggregate intrinsic value of the warrants outstanding was $0. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 12. Income Taxes Prior to the Company’s Corporate Conversion, the Company operated as an Alabama limited liability company that passed through income and losses to its members. As a result, the Company was not subject to any U.S. federal or U.S. state income taxes as the related tax consequences are reported by the individual members. Upon the Corporate Conversion, the Company converted to a Delaware corporation and is now subject to filing U.S. federal and various U.S. state income tax returns. The Company elected to adopt the accrual method of accounting for tax reporting purposes in its initial corporate returns for the period ended December 31, 2020. As the Company was incorporated in December 2020, all tax years of the Company remain open to examination by tax authorities. As of December 31, 2021, the Company has U.S. federal and state net operating loss carryforwards of approximately $17,956,000, which have an indefinite carryforward. A reconciliation of the U.S. federal income tax rate to the Company’s effective tax rate is as follows: Year Ended December 31, 2021 2020 U.S. federal statutory income tax rate 21.00 % 21.00 % Permanent differences (0.33) % (1.56) % State taxes, net of federal benefit 4.47 % 4.20 % Deferred tax true-ups (1.82) % — % Other adjustments 0.15 % 0.27 % Change in valuation allowance (23.47) % (23.91) % Effective Income Tax rate — % — % Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets are comprised of the following: As of December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 4,586,488 $ 591,439 Stock compensation 1,338,234 1,310,207 Accrual to cash adjustments — 314,492 Investment in partnership 30,593 31,136 Amortization 16,299 17,467 Gross deferred tax assets 5,971,614 2,264,741 Valuation allowance (5,581,599) (1,836,300) Net deferred tax assets 390,015 428,441 Deferred tax liabilities: Prepaid expenses (390,015) (428,441) Deferred tax liabilities (390,015) (428,441) Net deferred taxes $ — $ — As of December 31, 2021, the Company has not generated sufficient positive evidence for future earnings to support a position that it will be able to realize its net deferred tax asset. The Company has significant negative evidence to overcome in the form of cumulative pre-tax losses from continuing operations since its formation, as well as projected losses for the current year. Therefore, it will continue to maintain a full valuation allowance on its U.S. federal and state net deferred tax asset. The change in the valuation allowance offset the income tax benefit related to the pre-tax loss for the year ended December 31, 2021. The Company does not have any material unrecognized tax benefits as of December 31, 2021. The Company experienced a net change in valuation allowance of $3,745,299 and $1,387,078 for the years ended December 31, 2021 and 2020, respectively. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES Act”) Act was enacted and signed into law. The CARES Act included a number of income tax law changes, including modifications to the interest limitation under IRC §163(j) and reinstatement of the ability to carry back net operating losses. The income tax items in the CARES Act do not have an impact on the Company’s 2021 or 2020 income tax provision. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events In February 2022, the Company entered into an Unrestricted Grant Research Agreement with the Bateman Horne Center of Excellence, Inc., to sponsor an open-label, pilot study for the treatment of Post-Acute Sequelae of SARS-CoV-2 (“PASC”) with a combination therapy of valacyclovir and celecoxib (“IMC-2”). The Company has agreed to provide a one-time grant in the amount of $180,000 to fund the research study. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Use of Estimates | Use of Estimates The preparation of these financial statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company's significant estimates and assumptions include estimated work performed but not yet billed by contract manufacturers, engineers and research organizations, the valuation of equity and stock-based related instruments, and the valuation allowance related to deferred taxes. Some of these judgments can be subjective and complex, and, consequently, actual results could differ from those estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates. |
Segment Information | Segment Information The Company operates in one reportable segment based on management’s view of its business for purposes of evaluating performance and making operating decisions. |
Concentrations of Credit Risk | Concentrations of Credit Risk Cash is potentially subject to concentrations of credit risk. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held. |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurement The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. ● Level 3 — Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The carrying amount of the Company’s financial instruments, including cash, accounts payable and accrued expenses approximate their fair values. |
Cash | Cash Cash is maintained in bank deposit accounts, which exceed the federally insured limits of $250,000. The Company does not have any cash equivalents. |
Variable Interest Entities | Variable Interest Entities When determining whether a legal entity should be consolidated, the Company first determines whether it has a variable interest in the legal entity. If a variable interest exists, the Company determines whether the legal entity is a variable interest entity (“VIE”) due to either: 1) a lack of sufficient equity to finance its activities, 2) its equity holders lacking the characteristics of a controlling financial interest, or 3) the legal entity being structured with non-substantive voting rights. If the Company concludes that the legal entity is a VIE, the Company next determines whether it is the primary beneficiary due to it possessing both: 1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE which could be significant to the VIE. If the Company concludes that it is the primary beneficiary, it consolidates the entity. |
Equity Method Investment | Equity Method Investment In 2017, the Company purchased a 25% ownership in Northriver Pharm, LLC (“NRP”) in the amount of $125,000 from existing investors of NRP. NRP is an entity with common ownership with the Company’s former Chief Executive Officer and Founder, who is also the Founder and sole voting member of NRP. The Company evaluated the ownership under VIE guidance and has determined that they do not have the power and economics to control the entity and are not the entity most closely associated with NRP. The Company previously accounted for the investment under the equity method of accounting. However, consistent with equity method accounting guidance, the Company has now discontinued applying the equity method accounting as the investment has been reduced to zero and the Company has not committed to provide further financial support and there is no expected return to profitable operations by NRP. |
Deferred Issuance Costs | Deferred Issuance Costs Deferred issuance costs are netted against amounts outstanding for the convertible promissory notes when the offering is completed. Expenditures incurred prior to the closing are capitalized as deferred issuance costs in non-current assets. There were no amounts capitalized prior to an offering as of December 31, 2021 and 2020. Upon closing, capitalized costs relating to debt offerings are recognized into interest expense over the terms of the instruments using the effective interest method. The Company recognized interest expense related to the amortization of issuance costs for the convertible promissory notes of $53,983 for the year ended December 31, 2020. The Company did not recognize any interest expense related to the amortization of issuance costs in 2021. |
Accrued Salaries | Accrued Salaries Accrued salaries represented outstanding guaranteed payments to the Company’s former President and former Chief Executive Officer and Founder and were recognized when incurred and considered payable. These amounts were paid in 2021 and no amounts remained outstanding at December 31, 2021. |
Income Taxes | Income Taxes The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company operated as an Alabama limited liability company until its Corporate Conversion. Therefore, the Company passed through all income and losses to its members until this point. As of December 31, 2021 and 2020, the Company had a full valuation allowance against deferred tax assets. The Company is subject to the provisions of ASC 740, Income Taxes |
Basic and Diluted Net Income (Loss) per Share | Basic and Diluted Net Income (Loss) per Share Basic net loss per common share (“EPS”) is computed in accordance with U.S. GAAP. Basic EPS is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. For the years ended December 31, 2021 and 2020, the Company had 1,041,647 and 811,663 options, respectively, and 172,500 and 276,583 warrants, respectively, to purchase common shares outstanding that were anti-dilutive. EPS and weighted-average shares outstanding for the year ended December 31, 2020, have been computed to give effect to the Corporate Conversion that occurred December 16, 2020 prior to the Company’s initial public offering. In conjunction with the Corporate Conversion, all of the Company’s outstanding members’ equity automatically converted into shares of common stock, based on the relative rights of the Company's pre-IPO equity holders. |
Research and Development | Research and Development Research and development costs are expensed as incurred. The Company arranges and contracts with third-party contract research organizations (“CROs”), contract development and manufacturing organizations (“CMOs”), contractor laboratories and independent consultants. As part of the process of preparing its financial statements, the Company may be required to estimate some of its expenses resulting from its obligations under these arrangements and contracts. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided. The Company’s objective is to reflect the appropriate expenses in its financial statements by matching those expenses with the period in which services are rendered. The Company determines any accrual estimates based on account discussions with applicable personnel and outside service providers as to the progress or state of completion. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. The Company’s estimates are dependent upon the timely and accurate reporting of CROs, CMOs and other third-party vendors. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved, and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record prepaid or accrued expenses related to these costs. |
Equity and Share-Based Compensation | Equity and Share-Based Compensation The Company recognizes compensation expense relating to equity-based payments based on the fair value of the equity or liability instrument issued. For equity-based instruments, the expense is based upon the grant date fair value and recognized over the service period. For awards with a performance condition, compensation expense is recognized over the requisite service period if it is probable that the performance condition will be satisfied. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the Company had paid cash for the goods or services. The Company estimates the fair value of options and warrants granted using an options pricing model, see Note 11. Expense is recognized within general and administrative expenses and forfeitures are recognized as they are incurred. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided by the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | December 31, December 31, 2021 2020 Prepaid insurance $ 1,329,385 $ 1,586,042 Prepaid clinical research costs 422,591 85,270 Prepaid services 15,664 5,729 Other miscellaneous current assets 863 324 $ 1,768,503 $ 1,677,365 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, December 31, 2021 2020 Accrued compensation $ 532,678 $ 573,479 Accrued interest on preferred members’ interests 188,085 188,085 Accrued clinical research costs 138,522 — Accrued director fees 31,000 — Accrued professional fees 24,100 8,992 Other 7,375 13,548 $ 921,760 $ 784,104 |
Convertible Promissory Notes,_2
Convertible Promissory Notes, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Promissory Notes, Net | |
Schedule of interest expense related to the Notes | December 31, December 31, 2021 2020 Fourth Offering $ — $ 231,364 Fifth Offering — 98,634 $ — $ 329,998 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based compensation | |
Schedule of stock options | Weighted Average Weighted Remaining Average Contractual Number of Exercise Term Shares Price (Years) Outstanding at December 31, 2019 — $ — — Granted 519,163 10.00 — Outstanding at December 31, 2020 519,163 $ 10.00 9.98 Granted 229,984 6.85 — Outstanding at December 31, 2021 749,147 $ 9.03 9.09 Exercisable at December 31, 2021 542,971 $ 9.85 9.00 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of reconciliation of federal income tax rate to effective tax rate | Year Ended December 31, 2021 2020 U.S. federal statutory income tax rate 21.00 % 21.00 % Permanent differences (0.33) % (1.56) % State taxes, net of federal benefit 4.47 % 4.20 % Deferred tax true-ups (1.82) % — % Other adjustments 0.15 % 0.27 % Change in valuation allowance (23.47) % (23.91) % Effective Income Tax rate — % — % |
Schedule of net deferred tax assets | As of December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 4,586,488 $ 591,439 Stock compensation 1,338,234 1,310,207 Accrual to cash adjustments — 314,492 Investment in partnership 30,593 31,136 Amortization 16,299 17,467 Gross deferred tax assets 5,971,614 2,264,741 Valuation allowance (5,581,599) (1,836,300) Net deferred tax assets 390,015 428,441 Deferred tax liabilities: Prepaid expenses (390,015) (428,441) Deferred tax liabilities (390,015) (428,441) Net deferred taxes $ — $ — |
Background and Organization (De
Background and Organization (Details) | Dec. 21, 2020USD ($)shares | Dec. 16, 2020D$ / sharesshares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Dec. 21, 2021$ / sharesshares |
Subsidiary, Sale of Stock [Line Items] | |||||
Share price | $ / shares | $ 10 | ||||
Warrants to purchase shares | shares | 172,500 | 172,500 | |||
Warrants exercise price | $ / shares | $ 12.50 | $ 12.50 | |||
Warrants exercise price percentage of IPO Price | 125.00% | ||||
Net loss | $ 15,960,268 | $ 10,346,395 | |||
Net cash used in operating activities | 15,689,578 | 3,895,195 | |||
Accumulated deficit | $ 43,925,373 | $ 27,965,105 | |||
Minimum | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
period in which the company has to raise additional capital to complete clinical development | 13 months | ||||
Maximum | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
period in which the company has to raise additional capital to complete clinical development | 18 months | ||||
IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued | shares | 3,450,000 | 3,000,000 | |||
Share price | $ / shares | $ 10 | ||||
Gross proceeds | $ 34,500,000 | ||||
Net proceeds | $ 31,100,000 | ||||
Underwriter option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued | shares | 450,000 | ||||
Days to purchase additional shares granted to underwriters | D | 45 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Cash (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)segment | |
Summary of Significant Accounting Policies | |
No of Reporting segments | segment | 1 |
Federally insured limit | $ | $ 250,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Equity Method Investment (Details) - NRP | Dec. 31, 2017USD ($) |
Accounting Policies [Line Items] | |
Ownership percentage | 25.00% |
Equity method investment | $ 125,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Deferred Issuance Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Line Items] | ||
Deferred offering costs | $ 0 | $ 0 |
Amortization of issuance costs | $ 0 | 53,983 |
Convertible promissory notes | ||
Accounting Policies [Line Items] | ||
Amortization of issuance costs | $ 53,983 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Accrued Salaries (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | ||
Accrued salaries | $ 0 | $ 378,833 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Basic and Diluted Net Income (Loss) Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares outstanding | 8,329,310 | 4,926,985 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 1,041,647 | 811,663 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 172,500 | 276,583 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
General and administrative expenses | $ 4,845,252 | $ 9,811,381 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid Expenses and Other Current Assets | ||
Prepaid insurance | $ 1,329,385 | $ 1,586,042 |
Prepaid clinical research costs | 422,591 | 85,270 |
Prepaid services | 15,664 | 5,729 |
Other miscellaneous current assets | 863 | 324 |
Total prepaid expenses and other assets | $ 1,768,503 | $ 1,677,365 |
License Agreement (Details)
License Agreement (Details) - Agreement | 12 Months Ended |
Dec. 31, 2012 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Percentage of non-voting membership interest | 10.00% |
License agreement expiration period | 25 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Expenses | ||
Accrued compensation | $ 532,678 | $ 573,479 |
Accrued interest on preferred members' interests | 188,085 | 188,085 |
Accrued clinical research costs | 138,522 | |
Accrued director fees | 31,000 | |
Accrued professional fees | 24,100 | 8,992 |
Other | 7,375 | 13,548 |
Accrued expenses | $ 921,760 | $ 784,104 |
Convertible Promissory Notes,_3
Convertible Promissory Notes, Net (Details) - USD ($) | Dec. 16, 2020 | Nov. 30, 2020 | Aug. 21, 2020 | Jul. 20, 2020 | Jun. 10, 2020 | Jan. 31, 2021 | Nov. 30, 2020 | Jul. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||||||||
Subscription received | $ 1,994,133 | ||||||||||
Aggregate notes | 0 | ||||||||||
Interest expenses | 329,998 | ||||||||||
Conversion Interest rate | 25.00% | ||||||||||
Warrant coverage exercisable period | 30 days | 30 days | |||||||||
Exercise of warrants | $ 197,562 | $ 197,562 | 176,250 | ||||||||
Outstanding warrants | $ 820,033 | ||||||||||
Class of warrants outstanding | 105,044 | 104,083 | |||||||||
Exercise of warrants (in shares) | 961 | 25,315 | |||||||||
Warrants forfeited | 78,768 | ||||||||||
Outstanding principle amount | $ 3,279,133 | ||||||||||
Preferred membership interests converted into convertible interests | 196,769 | 6,108,257 | |||||||||
Unamortized deferred offering cost | 41,445 | $ 41,445 | |||||||||
Gain (loss) on conversion of convertible debt | 0 | ||||||||||
Accrued interest paid in cash | $ 9,551 | ||||||||||
Unexercised warrants expiration date | Jan. 20, 2021 | ||||||||||
Fourth Offering | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest expenses | 231,364 | ||||||||||
Warrant coverage exercisable period | 30 days | ||||||||||
Exercise of warrants | $ 0 | ||||||||||
Outstanding warrants | $ 231,250 | $ 366,250 | $ 231,250 | ||||||||
Class of warrants outstanding | 29,629 | 29,629 | |||||||||
Exercise of warrants (in shares) | 21,620 | ||||||||||
Warrants forfeited | 8,009 | ||||||||||
Outstanding principle amount | $ 925,000 | $ 1,465,000 | |||||||||
Gain (loss) on conversion of convertible debt | 0 | 0 | |||||||||
Accrued interest paid in cash | $ 0 | $ 3,000 | |||||||||
Fifth Offering | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Subscription received | $ 125,000 | $ 706,633 | $ 1,162,500 | ||||||||
Interest rate | 8.00% | ||||||||||
Notes term | 18 months | ||||||||||
Interest expenses | $ 98,634 |
Members' Equity (Details)
Members' Equity (Details) | Dec. 16, 2020USD ($) | Jul. 31, 2021item | Nov. 30, 2020USD ($) | Jul. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Jul. 17, 2020 |
Class of Stock [Line Items] | ||||||
Number of issuances of membership interests | item | 2 | |||||
Compensation expense | $ 2,000,000 | |||||
Outstanding principle amount | $ 3,279,133 | |||||
Accrued interest | 196,769 | |||||
Gain (loss) on conversion of convertible debt | 0 | |||||
Accrued interest paid in cash | 9,551 | |||||
Percentage of membership interests, issuance to founder, capital raise | 5.00% | |||||
Unamortized deferred offering cost | $ 41,445 | $ 41,445 | ||||
Fourth Offering | ||||||
Class of Stock [Line Items] | ||||||
Outstanding principle amount | $ 925,000 | $ 1,465,000 | ||||
Accrued interest | 111,000 | 172,800 | ||||
Gain (loss) on conversion of convertible debt | 0 | 0 | ||||
Accrued interest paid in cash | $ 0 | $ 3,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended | ||
Dec. 31, 2021item$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 16, 2020$ / sharesshares | |
Stockholders' Equity | |||
Common and preferred stock authorized (in shares) | 45,000,000 | ||
Common stock authorized (in shares) | 43,000,000 | 43,000,000 | 43,000,000 |
Preferred stock authorized (in shares) | 2,000,000 | 2,000,000 | 2,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Number of votes per common stock | item | 1 |
Related Parties (Details)
Related Parties (Details) - Gendreau Consulting, LLC - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Amount paid to the firm | $ 326,416 | $ 450 |
Accounts payable | $ 24,840 | $ 7,916 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 20, 2021 | Aug. 26, 2021 | Dec. 16, 2020 | Sep. 10, 2020 | Jul. 31, 2021 | Aug. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies | ||||||||
Severance payment period | 1 year | |||||||
Period of termination due to change of control. | 45 days | |||||||
Accrued salaries | $ 0 | $ 378,833 | ||||||
Payment of accrued salaries through issuance of members interest | 536,880 | |||||||
Other (expense) income | 43,221 | |||||||
CEO | ||||||||
Commitments and Contingencies | ||||||||
Percentage of cash bonus on salary | 50.00% | |||||||
VP of Operations and Finance | ||||||||
Commitments and Contingencies | ||||||||
Percentage of cash bonus on salary | 20.00% | |||||||
Director | ||||||||
Commitments and Contingencies | ||||||||
Ratio of current annual base salary | 0.5 | |||||||
Ratio of cash bonus | 0.5 | |||||||
Dr. William L. Pridgen | ||||||||
Commitments and Contingencies | ||||||||
Accrued salary payable in cash | 212,166 | |||||||
Advance salary paid | 100,000 | |||||||
Accrued salaries | $ 549,046 | |||||||
Payment of accrued salaries through issuance of members interest | $ 336,880 | |||||||
President | ||||||||
Commitments and Contingencies | ||||||||
Percentage of base salary | 50.00% | |||||||
Amount of bonus advance offset the equity bonus at the time the Options are issued | $ 150,000 | |||||||
Accrued salary | $ 466,667 | |||||||
Accrued salary payable in cash | $ 266,667 | |||||||
Payment of accrued salaries through issuance of members interest | $ 200,000 | |||||||
CMO | ||||||||
Commitments and Contingencies | ||||||||
Percentage of then current annual base salary. | 25.00% | |||||||
Threshold termination period | 3 months | |||||||
Employment agreement, health benefit offered period on termination | 12 months | |||||||
Ratio of current annual base salary | 1 | |||||||
Ratio of cash bonus | 1 | |||||||
Minimum | CMO | ||||||||
Commitments and Contingencies | ||||||||
Percentage of cash bonus on salary | 35.00% | |||||||
Torreya Capital LLC | ||||||||
Commitments and Contingencies | ||||||||
Transaction fee | $ 1,035,000 | |||||||
Other (expense) income | $ 325,000 |
Share-based compensation - Equi
Share-based compensation - Equity Incentive Plan (Details) - Plan - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | ||
Outstanding at the beginning of the period | 519,163 | |
Granted | 229,984 | 519,163 |
Outstanding at the end of the period | 749,147 | 519,163 |
Exercisable at December 31, 2021 | 542,971 | |
Weighted Average Exercise Price | ||
Outstanding the beginning of the period | $ 10 | |
Granted | 6.85 | $ 10 |
Outstanding at the end of the period | 9.03 | $ 10 |
Exercisable at December 31, 2021 | $ 9.85 | |
Weighted Average Remaining Contractual Term (years) | ||
Weighted average remaining contractual term (years) | 9 years 1 month 2 days | 9 years 11 months 23 days |
Exercisable at December 31, 2021 | 9 years | |
Intrinsic value of options outstanding | $ 0 | $ 0 |
Intrinsic value of options exercisable | $ 0 | $ 0 |
Share-based compensation - Narr
Share-based compensation - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 16, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Share price | $ 10 | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | |||
Share-based compensation expense | $ 2,000,000 | ||
Warrants exercise price percentage of IPO Price | 125.00% | ||
Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized | 812,500 | ||
Maximum aggregate number of shares | 500,000 | ||
Shares available for future grant | 63,353 | 293,337 | |
Vesting period | 10 years | 10 years | |
Aggregate grant date fair value | $ 1,150,284 | $ 3,441,687 | |
Expiration period | 10 years | ||
Exercise price | $ 6.85 | $ 10 | |
Granted | 229,984 | 519,163 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Discount rates | 0.39% | ||
Expected life | 5 years | ||
Expected volatility | 88.30% | ||
Expected dividends | $ 0 | $ 0 | |
Fair market value | $ 9.80 | ||
Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Discount rates | 0.505% | ||
Expected life | 5 years 3 months 7 days | ||
Expected volatility | 89.04% | ||
Fair market value | $ 6.50 | ||
Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Discount rates | 1.075% | ||
Expected life | 6 years | ||
Expected volatility | 90.16% | ||
Fair market value | $ 7.51 | ||
Plan | Vesting over one year | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 8.33% | 100.00% | |
Plan | Vesting after one year | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.333% | ||
Plan | Vesting in 24 monthly installments thereafter | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 66.667% | ||
Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 100.00% | ||
Unrecognized compensation expense | $ 827,402 | $ 0 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | |||
Share-based compensation expense | $ 322,881 | $ 3,441,687 |
Share-based compensation - Unre
Share-based compensation - Unregistered Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Share price | $ 10 | |
Share-based compensation expense | $ 2,000,000 | |
Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 229,984 | 519,163 |
Exercise price | $ 6.85 | $ 10 |
Remaining contractual term | 9 years 1 month 2 days | 9 years 11 months 23 days |
Intrinsic value of options outstanding | $ 0 | $ 0 |
Intrinsic value of options exercisable | 0 | 0 |
Aggregate grant date fair value | $ 1,150,284 | $ 3,441,687 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Discount rates | 0.39% | |
Expected life | 5 years | |
Expected volatility | 88.30% | |
Expected dividends | $ 0 | $ 0 |
Fair market value | $ 9.80 | |
Plan | Non-qualified stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 292,500 | |
Term | 10 years | |
Exercise price | $ 10 | |
Vesting percentage | 100.00% | |
Remaining contractual term | 8 years 11 months 15 days | |
Unrecognized compensation expense | $ 0 | $ 0 |
Intrinsic value of options outstanding | 0 | |
Aggregate grant date fair value | $ 1,987,831 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Discount rates | 0.37% | |
Expected life | 5 years | |
Expected volatility | 88.30% | |
Expected dividends | $ 0 | |
Share price | $ 10 | |
Share-based compensation expense | $ 1,987,831 |
Share-based compensation - Unde
Share-based compensation - Underwriters Warrants (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)Y$ / sharesshares | Dec. 21, 2021$ / sharesshares | Dec. 16, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Warrants to purchase shares | shares | 172,500 | 172,500 | |
Warrants exercise price | $ / shares | $ 12.50 | $ 12.50 | |
Remaining contractual term | 3 years 11 months 15 days | 5 years | |
Number of Shares | |||
Outstanding at the end of the period | shares | 104,083 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Share price | $ / shares | $ 10 | ||
Remaining contractual term | 3 years 11 months 15 days | 5 years | |
Percentage of warrants exercisable | 100.00% | ||
Intrinsic value of warrants outstanding | $ | $ 0 | ||
Measurement Input, Discount Rate [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Warrants and rights outstanding, measurement input | 0.37 | ||
Measurement Input, Expected Term [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Warrants and rights outstanding, measurement input | Y | 5 | ||
Measurement Input, Price Volatility [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Warrants and rights outstanding, measurement input | 88.3 | ||
Measurement Input, Expected Dividend Rate [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Warrants and rights outstanding, measurement input | 0 | ||
Warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate grant date fair value | $ | $ 1,108,785 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of federal income tax rate to effective tax rate | ||
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Permanent differences | (0.33%) | (1.56%) |
State taxes, net of federal benefit | 4.47% | 4.20% |
Deferred tax true-ups | (1.82%) | |
Other adjustments | 0.15% | 0.27% |
Change in valuation allowance | (23.47%) | (23.91%) |
Effective Income Tax rate | 0.00% | 0.00% |
Income Taxes - Net deferred tax
Income Taxes - Net deferred tax assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 4,586,488 | $ 591,439 |
Stock compensation | 1,338,234 | 1,310,207 |
Accrual to cash adjustments | 314,492 | |
Investment in partnership | 30,593 | 31,136 |
Amortization | 16,299 | 17,467 |
Gross deferred tax assets | 5,971,614 | 2,264,741 |
Valuation allowance | (5,581,599) | (1,836,300) |
Net deferred tax assets | 390,015 | 428,441 |
Deferred tax liabilities: | ||
Prepaid expenses | 390,015 | 428,441 |
Deferred tax liabilities | 390,015 | 428,441 |
Net deferred taxes | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Net operating loss carryforwards | $ 17,956,000 | |
Net change in valuation allowance | $ 3,745,299 | $ 1,387,078 |
Subsequent Events (Details)
Subsequent Events (Details) | Feb. 28, 2022USD ($) |
Subsequent Events. | |
Subsequent Event [Line Items] | |
Grant to fund research study | $ 180,000 |