Cover
Cover | 9 Months Ended |
Sep. 30, 2022 | |
Cover [Abstract] | |
Document Type | S-4/A |
Entity Registrant Name | VALLON PHARMACEUTICALS, INC. |
Entity Incorporation, State or Country Code | DE |
Entity Primary SIC Number | 2834 |
Entity Tax Identification Number | 82-4369909 |
Entity Address, Address Line One | Two Logan Square100 N. 18th Street |
Entity Address, Address Line Two | Suite 300 |
Entity Address, City or Town | Philadelphia |
Entity Address, State or Province | PA |
Entity Address, Postal Zip Code | 19103 |
City Area Code | (267) |
Local Phone Number | 607-8255 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001824293 |
Amendment Flag | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 3,702 | $ 109 |
Marketable securities, available-for-sale | 3,808 | 0 |
Prepaid expenses and other current assets | 619 | 565 |
Total current assets | 8,129 | 674 |
Other assets | 206 | 279 |
Property and equipment, net | 0 | 2 |
Total assets | 8,335 | 955 |
Liabilities, Current [Abstract] | ||
Accounts payable | 918 | 1,226 |
Accrued expenses | 1,430 | 847 |
Note payable, current | 0 | 47 |
Other current liabilities | 97 | 105 |
Total current liabilities | 2,445 | 2,225 |
Note payable, non-current | 0 | 14 |
Other liabilities | 72 | 170 |
Total liabilities | 2,517 | 2,409 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 6,812,836 and 4,506,216 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 0 | 0 |
Additional paid-in-capital | 27,722 | 11,145 |
Accumulated other comprehensive loss | (2) | 0 |
Accumulated deficit | (21,902) | (12,599) |
Total stockholders' equity (deficit) | 5,818 | (1,454) |
Total liabilities and stockholders' equity (deficit) | $ 8,335 | $ 955 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | May 17, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized (in shares) | 250,000,000 | 250,000,000 | 250,000,000 | |
Common stock, shares issued (in shares) | 12,732,836 | 6,812,836 | 4,506,216 | |
Common stock, shares outstanding (in shares) | 12,732,836 | 6,812,836 | 4,506,216 |
Statement of Operations and Com
Statement of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Licensing revenue – related party | $ 0 | $ 100,000 |
Operating expenses: | ||
Research and development | 5,187,000 | 3,707,000 |
General and administrative | 4,072,000 | 1,181,000 |
Total operating expenses | 9,259,000 | 4,888,000 |
Loss from operations | (9,259,000) | (4,788,000) |
Other income | 61,000 | 0 |
Revaluation of derivative liability | (89,000) | 0 |
Interest expense, net | (16,000) | (34,000) |
Net loss | (9,303,000) | (4,822,000) |
Other comprehensive loss: | ||
Unrealized loss on marketable securities, available-for-sale | (2,000) | 0 |
Total comprehensive loss | $ (9,305,000) | $ (4,822,000) |
Net loss per share of common stock, basic (in usd per share) | $ (1.42) | $ (1.07) |
Net loss per share of common stock, diluted (in usd per share) | $ (1.42) | $ (1.07) |
Weighted-average common shares outstanding, basic (in shares) | 6,541,097 | 4,506,216 |
Weighted-average common shares outstanding, diluted (in shares) | 6,541,097 | 4,506,216 |
Statements of Changes in Stockh
Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance, shares (in shares) at Dec. 31, 2019 | 4,506,216 | ||||
Beginning Balance at Dec. 31, 2019 | $ 3,214 | $ 10,991 | $ (7,777) | ||
Stock-based compensation expense | 154 | 154 | |||
Unrealized loss on marketable securities, available-for-sale | 0 | ||||
Net loss | $ (4,822) | (4,822) | |||
Ending Balance, shares (in shares) at Dec. 31, 2020 | 4,506,216 | 4,506,216 | |||
Ending Balance at Dec. 31, 2020 | $ (1,454) | $ 0 | 11,145 | (12,599) | |
Issuance of common stock for convertible notes (in shares) | 54,906 | ||||
Issuance of common stock for convertible notes | 439 | 439 | |||
Issuance of common stock for IPO, net of issuance expenses (in shares) | 2,250,000 | ||||
Issuance of common stock for IPO, net of issuance expenses | 15,104 | 15,104 | |||
Issuance of common stock for services (in shares) | 1,714 | ||||
Issuance of common stock for services | 9 | 9 | |||
Issuance of Underwriters Warrants | 399 | 399 | |||
Stock-based compensation expense | 168 | 168 | |||
Net loss | (2,638) | (2,638) | |||
Ending Balance, shares (in shares) at Mar. 31, 2021 | 6,812,836 | ||||
Ending Balance at Mar. 31, 2021 | $ 12,027 | $ 0 | 27,264 | (15,237) | |
Beginning Balance, shares (in shares) at Dec. 31, 2020 | 4,506,216 | 4,506,216 | |||
Beginning Balance at Dec. 31, 2020 | $ (1,454) | $ 0 | 11,145 | (12,599) | |
Net loss | (6,207) | ||||
Ending Balance, shares (in shares) at Sep. 30, 2021 | 6,812,836 | ||||
Ending Balance at Sep. 30, 2021 | $ 8,729 | $ 0 | 27,536 | $ (1) | (18,806) |
Beginning Balance, shares (in shares) at Dec. 31, 2020 | 4,506,216 | 4,506,216 | |||
Beginning Balance at Dec. 31, 2020 | $ (1,454) | $ 0 | 11,145 | (12,599) | |
Issuance of common stock for convertible notes (in shares) | 54,906 | ||||
Issuance of common stock for convertible notes | 439 | 439 | |||
Issuance of common stock for IPO, net of issuance expenses (in shares) | 2,250,000 | ||||
Issuance of common stock for IPO, net of issuance expenses | 15,104 | 15,104 | |||
Issuance of common stock for services (in shares) | 1,714 | ||||
Issuance of common stock for services | 9 | 9 | |||
Issuance of Underwriters Warrants | 399 | 399 | |||
Stock-based compensation expense | 626 | 626 | |||
Unrealized loss on marketable securities, available-for-sale | (2) | (2) | |||
Net loss | $ (9,303) | (9,303) | |||
Ending Balance, shares (in shares) at Dec. 31, 2021 | 6,812,836 | 6,812,836 | |||
Ending Balance at Dec. 31, 2021 | $ 5,818 | $ 0 | 27,722 | (2) | (21,902) |
Beginning Balance, shares (in shares) at Mar. 31, 2021 | 6,812,836 | ||||
Beginning Balance at Mar. 31, 2021 | 12,027 | $ 0 | 27,264 | (15,237) | |
Stock-based compensation expense | 138 | 138 | |||
Net loss | (2,312) | (2,312) | |||
Ending Balance, shares (in shares) at Jun. 30, 2021 | 6,812,836 | ||||
Ending Balance at Jun. 30, 2021 | 9,853 | $ 0 | 27,402 | (17,549) | |
Stock-based compensation expense | 134 | 134 | |||
Unrealized loss on marketable securities, available-for-sale | (1) | (1) | |||
Net loss | (1,257) | (1,257) | |||
Ending Balance, shares (in shares) at Sep. 30, 2021 | 6,812,836 | ||||
Ending Balance at Sep. 30, 2021 | $ 8,729 | $ 0 | 27,536 | (1) | (18,806) |
Beginning Balance, shares (in shares) at Dec. 31, 2021 | 6,812,836 | 6,812,836 | |||
Beginning Balance at Dec. 31, 2021 | $ 5,818 | $ 0 | 27,722 | (2) | (21,902) |
Stock-based compensation expense | 181 | 181 | |||
Unrealized loss on marketable securities, available-for-sale | (4) | (4) | |||
Net loss | (2,635) | (2,635) | |||
Ending Balance, shares (in shares) at Mar. 31, 2022 | 6,812,836 | ||||
Ending Balance at Mar. 31, 2022 | $ 3,360 | $ 0 | 27,903 | (6) | (24,537) |
Beginning Balance, shares (in shares) at Dec. 31, 2021 | 6,812,836 | 6,812,836 | |||
Beginning Balance at Dec. 31, 2021 | $ 5,818 | $ 0 | 27,722 | (2) | (21,902) |
Net loss | $ (5,441) | ||||
Ending Balance, shares (in shares) at Sep. 30, 2022 | 12,732,836 | 12,732,836 | |||
Ending Balance at Sep. 30, 2022 | $ 3,459 | $ 1 | 30,802 | (1) | (27,343) |
Beginning Balance, shares (in shares) at Mar. 31, 2022 | 6,812,836 | ||||
Beginning Balance at Mar. 31, 2022 | 3,360 | $ 0 | 27,903 | (6) | (24,537) |
Issuance of common stock for IPO, net of issuance expenses (in shares) | 3,700,000 | ||||
Issuance of common stock for IPO, net of issuance expenses | 2,161 | $ 1 | 2,160 | ||
Stock-based compensation expense | (85) | (85) | |||
Unrealized loss on marketable securities, available-for-sale | 3 | 3 | |||
Net loss | (1,773) | (1,773) | |||
Ending Balance, shares (in shares) at Jun. 30, 2022 | 10,512,836 | ||||
Ending Balance at Jun. 30, 2022 | 3,666 | $ 1 | 29,978 | (3) | (26,310) |
Stock-based compensation expense | (136) | (136) | |||
Unrealized loss on marketable securities, available-for-sale | 2 | 2 | |||
Net loss | $ (1,033) | (1,033) | |||
Ending Balance, shares (in shares) at Sep. 30, 2022 | 12,732,836 | 12,732,836 | |||
Ending Balance at Sep. 30, 2022 | $ 3,459 | $ 1 | $ 30,802 | $ (1) | $ (27,343) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net loss | $ (9,303) | $ (4,822) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Operating cash flows from finance lease amortization | 73 | 74 |
Amortization of marketable securities premiums | 32 | 0 |
Revaluation of derivative liability | 89 | 0 |
Stock-based compensation expense | 626 | 154 |
Forgiveness of PPP note | (61) | 0 |
Non-cash interest, depreciation and other expense | 12 | 1 |
Change in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (55) | (464) |
Accounts payable | (308) | 980 |
Accrued expenses | 583 | 371 |
Cash used in operating activities | (8,312) | (3,706) |
Investing activities: | ||
Purchase of marketable securities | (3,842) | 0 |
Purchase of property and equipment | 0 | (2) |
Cash used in investing activities | (3,842) | (2) |
Financing activities: | ||
Proceeds from common stock issuance, net of offering expenses | 15,104 | 0 |
Proceeds from issuance of warrants | 399 | 0 |
Proceeds from PPP loan | 0 | 61 |
Proceeds from convertible notes | 350 | 0 |
Payment of finance lease liability | (106) | (65) |
Cash provided by (used in) financing activities | 15,747 | (4) |
Net increase (decrease) in cash and cash equivalents | 3,593 | (3,712) |
Cash and cash equivalents at beginning of period | 109 | 3,821 |
Cash and cash equivalents at end of period | 3,702 | 109 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 29 | 41 |
Non-cash financing activities: | ||
Conversion of convertible notes to common stock | $ 350 | $ 0 |
Balance Sheets_2
Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | May 17, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets, Current [Abstract] | ||||||||||
Cash and cash equivalents | $ 4,732 | $ 3,702 | $ 109 | |||||||
Marketable securities, available-for-sale | 419 | 3,808 | 0 | |||||||
Prepaid expenses and other current assets | 418 | 619 | 565 | |||||||
Total current assets | 5,569 | 8,129 | 674 | |||||||
Other assets | 0 | 206 | 279 | |||||||
Total assets | 5,569 | 8,335 | 955 | |||||||
Liabilities, Current [Abstract] | ||||||||||
Accounts payable | 1,185 | 918 | 1,226 | |||||||
Accrued expenses | 700 | 1,430 | 847 | |||||||
Warrant liability | 225 | $ 225 | 0 | |||||||
Other current liabilities | 0 | 97 | 105 | |||||||
Total current liabilities | 2,110 | 2,445 | 2,225 | |||||||
Other liabilities | 0 | 72 | 170 | |||||||
Total liabilities | 2,110 | 2,517 | 2,409 | |||||||
Commitments and contingencies (Note 9) | ||||||||||
Stockholders' equity (deficit): | ||||||||||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 6,812,836 and 4,506,216 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 1 | 0 | 0 | |||||||
Additional paid-in-capital | 30,802 | 27,722 | 11,145 | |||||||
Accumulated other comprehensive loss | (1) | (2) | 0 | |||||||
Accumulated deficit | (27,343) | (21,902) | (12,599) | |||||||
Total stockholders' equity (deficit) | 3,459 | $ 3,666 | $ 3,360 | 5,818 | $ 8,729 | $ 9,853 | $ 12,027 | (1,454) | $ 3,214 | |
Total liabilities and stockholders' equity (deficit) | $ 5,569 | $ 8,335 | $ 955 |
Balance Sheets (Parenthetical_2
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | May 17, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized (in shares) | 250,000,000 | 250,000,000 | 250,000,000 | |
Common stock, shares issued (in shares) | 12,732,836 | 6,812,836 | 4,506,216 | |
Common stock, shares outstanding (in shares) | 12,732,836 | 6,812,836 | 4,506,216 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating expenses: | ||||
Research and development | $ (18) | $ 215 | $ 1,529 | $ 3,189 |
General and administrative | 1,422 | 1,038 | 4,014 | 2,976 |
Total operating expenses | 1,404 | 1,253 | 5,543 | 6,165 |
Loss from operations | (1,404) | (1,253) | (5,543) | (6,165) |
Other income | 0 | 0 | 0 | 61 |
Revaluation of derivative liability | 0 | 0 | 0 | (89) |
Change in fair value of warrant liability | 757 | 0 | 490 | 0 |
Loss on warrant conversion | (388) | 0 | (388) | 0 |
Interest income (expense), net | 2 | (4) | 0 | (14) |
Net loss | (1,033) | (1,257) | (5,441) | (6,207) |
Other comprehensive loss: | ||||
Unrealized gain (loss) on investments | 2 | (1) | 1 | (1) |
Total comprehensive loss | $ (1,031) | $ (1,258) | $ (5,440) | $ (6,208) |
Net loss per share of common stock, basic (in usd per share) | $ (0.09) | $ (0.18) | $ (0.59) | $ (0.96) |
Net loss per share of common stock, diluted (in usd per share) | $ (0.09) | $ (0.18) | $ (0.59) | $ (0.96) |
Weighted-average common shares outstanding, basic (in shares) | 12,105,445 | 6,812,836 | 9,219,869 | 6,449,522 |
Weighted-average common shares outstanding, diluted (in shares) | 12,105,445 | 6,812,836 | 9,219,869 | 6,449,522 |
Statements of Changes in Stoc_2
Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance, shares (in shares) at Dec. 31, 2019 | 4,506,216 | ||||
Beginning Balance at Dec. 31, 2019 | $ 3,214 | $ 10,991 | $ (7,777) | ||
Stock-based compensation expense | 154 | 154 | |||
Unrealized gain (loss) on marketable securities, available-for-sale | 0 | ||||
Net loss | $ (4,822) | (4,822) | |||
Ending Balance, shares (in shares) at Dec. 31, 2020 | 4,506,216 | 4,506,216 | |||
Ending Balance at Dec. 31, 2020 | $ (1,454) | $ 0 | 11,145 | (12,599) | |
Issuance of common stock for convertible notes (in shares) | 54,906 | ||||
Issuance of common stock for convertible notes | 439 | 439 | |||
Issuance of common stock for IPO, net of issuance expenses (in shares) | 2,250,000 | ||||
Issuance of common stock for IPO, net of issuance expenses | 15,104 | 15,104 | |||
Issuance of common stock for services (in shares) | 1,714 | ||||
Issuance of common stock for services | 9 | 9 | |||
Issuance of Underwriters Warrants | 399 | 399 | |||
Stock-based compensation expense | 168 | 168 | |||
Net loss | (2,638) | (2,638) | |||
Ending Balance, shares (in shares) at Mar. 31, 2021 | 6,812,836 | ||||
Ending Balance at Mar. 31, 2021 | $ 12,027 | $ 0 | 27,264 | (15,237) | |
Beginning Balance, shares (in shares) at Dec. 31, 2020 | 4,506,216 | 4,506,216 | |||
Beginning Balance at Dec. 31, 2020 | $ (1,454) | $ 0 | 11,145 | (12,599) | |
Net loss | (6,207) | ||||
Ending Balance, shares (in shares) at Sep. 30, 2021 | 6,812,836 | ||||
Ending Balance at Sep. 30, 2021 | $ 8,729 | $ 0 | 27,536 | $ (1) | (18,806) |
Beginning Balance, shares (in shares) at Dec. 31, 2020 | 4,506,216 | 4,506,216 | |||
Beginning Balance at Dec. 31, 2020 | $ (1,454) | $ 0 | 11,145 | (12,599) | |
Issuance of common stock for convertible notes (in shares) | 54,906 | ||||
Issuance of common stock for convertible notes | 439 | 439 | |||
Issuance of common stock for IPO, net of issuance expenses (in shares) | 2,250,000 | ||||
Issuance of common stock for IPO, net of issuance expenses | 15,104 | 15,104 | |||
Issuance of common stock for services (in shares) | 1,714 | ||||
Issuance of common stock for services | 9 | 9 | |||
Issuance of Underwriters Warrants | 399 | 399 | |||
Stock-based compensation expense | 626 | 626 | |||
Unrealized gain (loss) on marketable securities, available-for-sale | (2) | (2) | |||
Net loss | $ (9,303) | (9,303) | |||
Ending Balance, shares (in shares) at Dec. 31, 2021 | 6,812,836 | 6,812,836 | |||
Ending Balance at Dec. 31, 2021 | $ 5,818 | $ 0 | 27,722 | (2) | (21,902) |
Beginning Balance, shares (in shares) at Mar. 31, 2021 | 6,812,836 | ||||
Beginning Balance at Mar. 31, 2021 | 12,027 | $ 0 | 27,264 | (15,237) | |
Stock-based compensation expense | 138 | 138 | |||
Net loss | (2,312) | (2,312) | |||
Ending Balance, shares (in shares) at Jun. 30, 2021 | 6,812,836 | ||||
Ending Balance at Jun. 30, 2021 | 9,853 | $ 0 | 27,402 | (17,549) | |
Stock-based compensation expense | 134 | 134 | |||
Unrealized gain (loss) on marketable securities, available-for-sale | (1) | (1) | |||
Net loss | (1,257) | (1,257) | |||
Ending Balance, shares (in shares) at Sep. 30, 2021 | 6,812,836 | ||||
Ending Balance at Sep. 30, 2021 | $ 8,729 | $ 0 | 27,536 | (1) | (18,806) |
Beginning Balance, shares (in shares) at Dec. 31, 2021 | 6,812,836 | 6,812,836 | |||
Beginning Balance at Dec. 31, 2021 | $ 5,818 | $ 0 | 27,722 | (2) | (21,902) |
Stock-based compensation expense | 181 | 181 | |||
Unrealized gain (loss) on marketable securities, available-for-sale | (4) | (4) | |||
Net loss | (2,635) | (2,635) | |||
Ending Balance, shares (in shares) at Mar. 31, 2022 | 6,812,836 | ||||
Ending Balance at Mar. 31, 2022 | $ 3,360 | $ 0 | 27,903 | (6) | (24,537) |
Beginning Balance, shares (in shares) at Dec. 31, 2021 | 6,812,836 | 6,812,836 | |||
Beginning Balance at Dec. 31, 2021 | $ 5,818 | $ 0 | 27,722 | (2) | (21,902) |
Net loss | $ (5,441) | ||||
Ending Balance, shares (in shares) at Sep. 30, 2022 | 12,732,836 | 12,732,836 | |||
Ending Balance at Sep. 30, 2022 | $ 3,459 | $ 1 | 30,802 | (1) | (27,343) |
Beginning Balance, shares (in shares) at Mar. 31, 2022 | 6,812,836 | ||||
Beginning Balance at Mar. 31, 2022 | 3,360 | $ 0 | 27,903 | (6) | (24,537) |
Issuance of common stock for IPO, net of issuance expenses (in shares) | 3,700,000 | ||||
Issuance of common stock for IPO, net of issuance expenses | 2,161 | $ 1 | 2,160 | ||
Stock-based compensation expense | (85) | (85) | |||
Unrealized gain (loss) on marketable securities, available-for-sale | 3 | 3 | |||
Net loss | (1,773) | (1,773) | |||
Ending Balance, shares (in shares) at Jun. 30, 2022 | 10,512,836 | ||||
Ending Balance at Jun. 30, 2022 | 3,666 | $ 1 | 29,978 | (3) | (26,310) |
Issuance of common stock upon warrant exercise (in shares) | 2,220,000 | ||||
Issuance of common stock upon warrant exercise | 960 | 960 | |||
Stock-based compensation expense | (136) | (136) | |||
Unrealized gain (loss) on marketable securities, available-for-sale | 2 | 2 | |||
Net loss | $ (1,033) | (1,033) | |||
Ending Balance, shares (in shares) at Sep. 30, 2022 | 12,732,836 | 12,732,836 | |||
Ending Balance at Sep. 30, 2022 | $ 3,459 | $ 1 | $ 30,802 | $ (1) | $ (27,343) |
Statements of Cash Flows_2
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net loss | $ (5,441) | $ (6,207) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Operating cash flows from finance lease amortization | 206 | 55 |
Amortization of marketable securities premiums | 29 | 11 |
Stock-based compensation expense | (40) | 440 |
Revaluation of derivative liability | 0 | 89 |
Change in fair value of warrant liability | (490) | 0 |
Loss on warrant conversion | 388 | 0 |
Forgiveness of PPP note | 0 | (61) |
Non-cash interest, depreciation and other expense | 0 | 2 |
Change in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 200 | (213) |
Accounts payable | 114 | (729) |
Accrued expenses | (730) | (116) |
Cash used in operating activities | (5,764) | (6,729) |
Investing activities: | ||
Purchase of marketable securities | (640) | (3,266) |
Sale of marketable securities | 4,002 | 0 |
Cash used in investing activities | 3,362 | (3,266) |
Financing activities: | ||
Proceeds from common stock issuance, net of offering expenses | 3,447 | 15,503 |
Proceeds from convertible notes | 0 | 350 |
Payment of finance lease liability | (15) | (83) |
Cash provided by (used in) financing activities | 3,432 | 15,770 |
Net increase (decrease) in cash and cash equivalents | 1,030 | 5,775 |
Cash and cash equivalents at beginning of period | 3,702 | 109 |
Cash and cash equivalents at end of period | 4,732 | 5,884 |
Non-cash financing activities: | ||
Conversion of convertible notes to common stock | 0 | 350 |
Finance lease liability costs included in accounts payable | 154 | 0 |
Non-cash exercise of warrants | $ 960 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS Vallon Pharmaceuticals, Inc. (Vallon or the Company), based in Philadelphia, PA was incorporated in Delaware on January 11, 2018, which is the date of inception. The Company is a biopharmaceutical company focused on the development and commercialization of novel abuse-deterrent medications for CNS disorders. The Company’s lead investigational product candidate, ADAIR, is a proprietary, abuse-deterrent oral formulation of immediate-release dextroamphetamine (the main active ingredient in Adderall®) for the treatment of attention-deficit/hyperactivity disorder (ADHD) and narcolepsy. In March 2022, the Company announced that its SEAL study for ADAIR did not reach its primary endpoint, and there is no assurance that ADAIR will receive approval by the U.S. Food and Drug Administration (the FDA). In addition to ADAIR, the Company completed formulation development work and selected the final formulation of its second product candidate, ADMIR, an abuse deterrent formulation of methylphenidate (Ritalin®), for the treatment of ADHD. Recent Developments The SEAL study ( S tudy to E valuate the A buse L iability, Pharmacokinetics, Safety and Tolerability of an Abuse-Deterrent d-Amphetamine Sulfate Immediate Release Formulation), was the Company’s pivotal intranasal human abuse liability study assessing the pharmacodynamics (PD), pharmacokinetics (PK), safety and tolerability of snorting professional laboratory-manipulated ADAIR 30 mg when compared to crushed d-amphetamine sulfate and placebo in recreational drug users. ADAIR was prepared for snorting by a pharmacist using a multi-step technique that had been developed by a professional laboratory and agreed upon by the FDA. The SEAL study enrolled 55 subjects, of whom 53 completed the study and 52 were included in the final analysis. The study involved a four-way crossover design to evaluate professionally manipulated, intranasal ADAIR 30 mg, crushed intranasal dextroamphetamine, ADAIR 30 mg taken orally, and placebo. All subjects were non-dependent recreational stimulant users with an additional history of recreational intranasal drug use. The SEAL study did not meet its primary endpoint, which was E max Drug Liking. ADAIR scored similarly to what was observed in an earlier proof-of-concept study, however, reference dextroamphetamine did not score as high as expected and as seen in the previous study, thus driving the lack of statistical significance. The SEAL study did meet all pharmacodynamic secondary endpoints including Overall Drug Liking and willingness to Take Drug Again at 12 and 24 hours post-dosing, demonstrating statistical significance. The Company is continuing to assess the best path forward for the ADAIR and ADMIR development programs. In addition, the Company has engaged Ladenburg Thalmann & Co. Inc. (Ladenburg) to evaluate its strategic alternatives with the goal of maximizing stockholder value. Ladenburg has been engaged to advise the Company on the strategic review process, which could include, without limitation, exploring the potential for a possible merger, business combination, investment into the Company, or a purchase, license or other acquisition of assets. In the meantime, and in conjunction with the exploration of strategic alternatives, the Company is streamlining its operations in order to preserve its capital and cash resources. | ORGANIZATION AND DESCRIPTION OF BUSINESS Vallon Pharmaceuticals, Inc. (Vallon or the Company) was incorporated in Delaware in January 2018 (inception) and is based in Philadelphia, PA. The Company is a biopharmaceutical company focused on the development and commercialization of novel abuse-deterrent medications for central nervous system (CNS) disorders. The Company’s lead investigational product candidate, ADAIR, is a proprietary, abuse-deterrent oral formulation of immediate-release dextroamphetamine (the main active ingredient in Adderall®) for the treatment of attention-deficit/hyperactivity disorder (ADHD) and narcolepsy. The Company plans to develop other abuse-deterrent products, which have potential for abuse in their current forms, beginning with the development of ADMIR, an abuse deterrent formulation of Ritalin, for which the Company has completed formulation development work. |
LIQUIDITY
LIQUIDITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
LIQUIDITY | LIQUIDITY These financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any significant revenues from operations since inception and does not expect to do so in the foreseeable future. The Company has incurred operating losses since its inception and has incurred and accumulated deficit of $27,343 through September 30, 2022. The Company has financed its working capital requirements to date through the issuance of common stock, warrants, convertible notes, short-term promissory notes, and a Paycheck Protection Program (PPP) promissory note. In January 2021, the Company completed a $350 convertible note financing and in February 2021, the Company completed the initial public offering (IPO), raising net proceeds of $15,500. On May 17, 2022, the Company entered into a Securities Purchase Agreement with certain investors (the Securities Purchase Agreement) for the sale of up to 3,700,000 shares of the Company’s common stock, par value $0.0001 per share (the Shares), at a purchase price of $1.0632 per Share in a registered direct offering (the Offering). In a concurrent private placement also pursuant to the Securities Purchase Agreement (the Private Placement), for each Share of common stock purchased by an investor, such investor was entitled receive from the Company an unregistered warrant (the Warrant and, together with the Shares, the Securities) to purchase one Share of common stock. The gross proceeds from the Offering and Private Placement were approximately $3,900, before deducting fees payable to the placement agent and other estimated offering expenses payable by the Company of approximately $572, of which $85 related to the warrants was expensed. As of September 30, 2022, the Company had cash, cash equivalents and marketable securities of approximately $5,151. The Company expects to incur ongoing expenses as it evaluates its plans for the ADAIR and ADMIR programs and strategic alternatives after it announced in March 2022 that the SEAL study of ADAIR for the treatment of ADHD failed to meet statistical significance for its primary endpoint. The Company is currently assessing the best path forward for the ADAIR and ADMIR programs and has no other product candidates undergoing clinical trials. The Company’s future capital requirements are difficult to forecast and will depend on many factors, including but not limited to the terms and timing of any strategic alternatives including a merger or business combination, asset acquisitions or sales, collaborations or licensing arrangements. If the Company raises additional funds by issuing equity securities, its stockholders may experience dilution. Any future debt financing may impose upon it covenants that restrict our operations, including limitations on its ability to incur liens or additional debt, pay dividends, repurchase its common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any equity or debt financing may contain terms that are not favorable to the Company or its stockholders. If the Company is unable to raise additional funds when needed, it may be required to delay, reduce or terminate some or all of its development programs and clinical trials. The Company may also be required to sell or license to other parties’ rights to develop or commercialize its drug candidates that it would prefer to retain. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The Company expects to continue to incur expenses and operating losses at least for the foreseeable future as it evaluates future plans for the ADAIR and ADMIR programs as well as its strategic alternatives. | LIQUIDITY These financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any significant revenues from operations since inception, and does not expect to do so in the foreseeable future. The Company has incurred operating losses since inception and has incurred $21,902 in accumulated deficit through December 31, 2021. The Company has financed its working capital requirements to date through the issuance of common stock, convertible notes, short-term promissory notes, and a Paycheck Protection Program (PPP) note. In January 2021, the Company completed a $350 convertible note financing and in February 2021, the Company closed on its initial public offering (IPO) raising net proceeds of approximately $15,500. As of December 31, 2021, the Company had cash, cash equivalents and marketable securities of approximately $7,510, which management expects will provide funding for its ongoing business activities into the third quarter of 2022. The Company’s ability to continue as a going concern is dependent on its ability to raise substantial additional capital to fund its business activities, including its research and development program. The Company intends to raise capital through additional issuances of common stock and /or short-term notes, but there can be no assurances any such financing will be available when needed or that the Company’s research and development efforts will be successful. If the Company is not able to obtain additional financing on acceptable terms and in the amounts necessary to fully fund its future operating requirements, it may be forced to reduce or discontinue its operations entirely. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial periods and pursuant to the rules of the Securities and Exchange Commission. References in this Quarterly Report on Form 10-Q to “authoritative guidance” is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The December 31, 2021 balance sheet was derived from audited financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of September 30, 2022, and the results of operations and stockholders’ equity (deficit) for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. Results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2022. The unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 14, 2022. Recapitalization Immediately prior to the closing of the IPO (Note 7), the Company effected a one-for-40 reverse stock split of its common stock. All share and per share amounts, excluding the number of authorized shares and par value, contained in these financial statements and accompanying notes, and this Quarterly Report on Form 10-Q give retroactive effect to the reverse split. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, the embedded derivative of convertible notes, warrant issuance and subsequent warrant revaluations, valuation allowances relating to deferred tax assets, revenue recognition, accrued expenses and estimation of the incremental borrowing rate for the finance lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Warrant Liabilities, Change in Fair Value and Warrant Conversion The Company evaluated the warrants issued in connection with the May 2022 registered direct financing (Note 7) in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the warrants related to the reduction of the exercise price in certain circumstances precludes the warrants from being accounted for as components of equity. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the accompanying Balance Sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement , with changes in fair value recognized in the accompanying Statements of Operations and Comprehensive Loss in the period of change. The derivative liabilities will ultimately be converted into the Company’s common stock when the warrants are exercised, or will be extinguished upon expiry of the warrant term. Upon exercise, the intrinsic value of the shares issued is transferred to stockholders’ equity. The difference between the intrinsic value of the stock issued and the fair value of the warrant is recorded as gain or loss on the exchange in the accompanying Statements of Operations and Comprehensive Loss in the period of exercise. Stock-based Compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and depends upon a number of factors including the Company's market value and the financial objectives of the option holders. These estimates can have a material impact on the stock compensation expense but will have no impact on the cash flows. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period the estimates are revised. The Company uses the expected term, rather than the contractual term, for both employee and consultant options issued. Recent Accounting Pronouncements The Company considered the applicability and impact of all ASUs issued during the quarter ended September 30, 2022 and each was determined to be either not applicable or expected to have minimal impact on these financial statements. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES References in this Annual Report on Form 10-K to “authoritative guidance” is meant to refer to accounting principles generally accepted in the United States of America (GAAP) as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). Recapitalization Immediately prior to the closing of the IPO (Note 10), the Company effected a one-for-40 reverse stock split of its common stock. All share and per share amounts, excluding the number of authorized shares and par value, contained in these financial statements and accompanying notes, and this Annual Report on Form 10-K give retroactive effect to the reverse split. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, the embedded derivative of convertible notes, warrant issuance, valuation allowances relating to deferred tax assets, revenue recognition, accrued expenses and estimation of the incremental borrowing rate for the finance lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. Concentration of credit risk The Company from time to time during the period covered by these financial statements may have had bank account balances in excess of federally insured limits. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Cash equivalents Cash equivalents are highly-liquid investments that are readily convertible into cash with original maturities of three months or less when purchased and as of December 31, 2021 and 2020 included investment in money market funds. Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Amortization of premiums and discounts on marketable securities are included in interest expense, net on the statements of operations and comprehensive loss. Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Fair value of financial instruments The Company follows ASC 820, Fair Value Measurements and Disclosures (ASC 820), to measure the fair value of its financial statements and disclosures about fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lower priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The Company uses this framework for measuring fair value and disclosures about fair value measurement. The Company uses fair value measurements in areas that include derivative instruments. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. The carrying amounts reported in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, and note payable approximate their fair value based on the short-term maturity of these instruments. Property and equipment Property and equipment are stated at cost. The Company commences depreciation when the asset is placed in service. Computers and peripheral equipment are depreciated on a straight-line method over useful lives of three years. Leases The Company determines whether an arrangement is a lease at contract inception by establishing if the contract conveys the right to use, or control the use of, identified property, plant, or equipment for a period of time in exchange for consideration. Leases may be classified as finance leases or operating leases. Lease right-of-use (ROU) assets and lease liabilities recognized in the accompanying balance sheet represent the right to use an underlying asset for the lease term and an obligation to make lease payments arising from the lease respectively. At each reporting date, the finance lease liabilities are increased by interest and reduced by repayments made under the lease agreements. The ROU asset is subsequently measured at the amount of the remeasured lease liability (i.e. the present value of the remaining lease payments), any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, and any unamortized initial direct costs. Licensing revenues The Company has a license agreement (the Medice License Agreement) with MEDICE Arzneimittel Pütter GmbH & Co. KG (Medice), a related party (Note 13). The license agreement provides for an exclusive license to develop, use, manufacture, market and sell ADAIR throughout Europe, a non-refundable up-front payment, potential regulatory and sales milestones and potential royalty payments. The Company analyzed the performance obligations under the license agreements, the consideration received to date and the consideration the Company could receive in the future as part of its analysis in accordance with ASC 606– Revenue from Contracts with Customers (ASC 606). The Company recognized $100 as licensing revenue during the year ended December 31, 2020. No licensing revenue was recognized during the year ended December 31, 2021. Research and development Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. Stock-based compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and depends upon a number of factors including the Company's market value and the financial objectives of the option holders. These estimates can have a material impact on the stock compensation expense but will have no impact on the cash flows. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period the estimates are revised. The Company uses the expected term, rather than the contractual term, for both employee and consultant options issued. Derivative instruments The Company evaluated its convertible notes to determine if those contracts or embedded components of those contracts qualified as derivatives to be separately accounted for in accordance with ASC 815, Derivatives and Hedging . The result of this accounting treatment is that the fair value of the embedded derivative is marked to market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheets as current or non-current to correspond with its host instrument. Income taxes Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company's financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on the weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2021 and 2020, the Company concluded that a full valuation allowance was necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. Net loss per common share Basic net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share . Recent accounting pronouncements The Company considers the applicability and impact of all ASUs. ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the financial statements. On January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending the existing guidance. The adoption of this standard did not have a material impact on the Company’s financial statements. |
MARKETABLE SECURITIES AND FAIR
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS Marketable Securities The following is a summary of the Company’s available for sale securities as of the dates indicated: As of September 30, 2022 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 150 $ — $ — $ 150 Municipal bonds 270 — (1) 269 Total $ 420 $ — $ (1) $ 419 As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820, Fair Value Measurement , establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). As of September 30, 2022, the Company’s financial instruments included cash and cash equivalents, marketable securities, prepaid expenses and other current assets, accounts payable, accrued expenses, and the warrant liability. The carrying amounts reported in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2022: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets: Marketable securities, available-for-sale $ — $ 419 $ — Liabilities: Warrant liability $ — $ — $ 225 On May 17, 2022, the Company issued 3,700,000 shares of common stock pursuant to a securities purchase agreement at a purchase price of $1.0632 per share in a registered direct offering (Note 7). In connection with the registered direct offering, the Company issued warrants to purchase an aggregate of 3,700,000 shares of common stock at an exercise price of $0.9382 per share. The warrants were classified as a liability in accordance with ASC 815-40 and the fair value of $225 is reflected in warrant liability on the accompanying Balance Sheets. The warrant liability was measured at fair value at inception and is revalued at each financial statement date, with changes in fair value presented within change in fair value of warrant liability in the accompanying Statements of Operations and Comprehensive Loss. On July 25, 2022, the Company amended the terms of the warrants issued in May 2022 to obligate each warrant holder who signed the warrant amendment (Applicable Holder) to effect a cashless exercise, in whole, by August 10, 2022 (the Expiration Date). The warrant amendment entitled the Applicable Holder to receive one share of common stock for each warrant in lieu of the aggregate number of shares of common stock that would have been received using the cashless exercise formula set forth in the warrant agreement (Alternate Cashless Exercise). If the warrants held by the Applicable Holders were not exercised by the Expiration Date, they were automatically exercised pursuant to the Alternate Cashless Exercise. A total of 2,220,000 warrants were exercised pursuant to the Alternate Cashless Exercise. As a result of the warrant conversion, the Company recognized a $573 reversal of the warrant liability. The following table presents the changes is the fair value of the Level 3 liability: Warrant Fair value as of December 31, 2021 $ — Initial measurement on May 17, 2022 1,288 Warrant conversion (573) Change in valuation (490) Balance as of September 30, 2022 $ 225 The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: (Initial Measurement) May 17, September 30, 2022 Volatility 130.8 % 133.3 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 2.67 % 4.24 % The fair value of the embedded derivative liability identified in the 2021 Convertible Notes (Note 6) was a Level 3 fair value measurement. As of February 12, 2021, the embedded derivative was remeasured based upon the conversion price of $8.00 per share upon closing of the IPO. As such, an expense of $89 was recorded during the nine months ended September 30, 2021. The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities: As of September 30, 2022 Due in 1 year $ 419 Due in 1-5 years — Due in 5-10 years — Due after 10 years — Total $ 419 | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS Marketable Securities The following is a summary of the Company’s available-for-sale securities as of the dates indicated: As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 All of the Company’s investments in marketable debt securities are accounted for as available-for-sale securities and have contractual maturity dates of one year or less. Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. As of December 31, 2021, all of the Company’s marketable securities were classified as Level 2 assets. The fair value of the embedded derivative liability identified in the 2021 Convertible Notes was a Level 3 fair value measurement. As of February 12, 2021, the embedded derivative was remeasured based upon the conversion price of $8.00 per share upon closing of the IPO. As such, an expense of $89 was recorded in the first quarter of 2021. The following table presents the activity for the liability measured at estimated fair value using unobservable inputs for the year ended December 31, 2021: Beginning balance, January 1, 2021 $ — Additions during the year ended December 31, 2021 89 Transfer out of Level 3 89 Balance at December 31, 2021 $ — |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The Company has a financing lease in relation to equipment utilized in the commercial scale manufacturing of ADAIR. The Company evaluates renewal options at lease inception on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. Financing lease ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. The Company utilized the interest rate implicit in the lease. The lease term is based on the non-cancellable period in the lease contract. Any termination fees are included in the calculation of the ROU asset and lease liability when it is assumed that the lease will be terminated. The table below presents the finance lease assets and liabilities recognized on the Company's balance sheets: December 31, Balance Sheet Line Item 2021 2020 Non-current finance lease assets Other assets $ 206 $ 279 Finance lease liabilities: Current finance lease liabilities Other current liabilities 97 105 Non-current finance lease liabilities Other liabilities 72 170 Total finance lease liabilities $ 169 $ 275 The Company’s weighted average remaining lease term and weighted average discount rate for its financing lease as of December 31, 2021 are: December 31, 2021 Weighted-average remaining lease term - finance lease 1.75 years Weighted-average discount rate - finance lease 13.50 % Cash flows related to the measurement of financing lease assets and liabilities were as follows: Year Ended December 31, 2021 2020 Operating cash flows from finance lease amortization $ 73 $ 74 Financing cash flows from finance lease payments $ 106 $ 65 The maturities of the finance lease liability as of December 31, 2021 are as follows: December 31, 2021 2022 $ 114 2023 76 Total lease payments 190 Less: Imputed interest 21 Present value of lease liability $ 169 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following: September 30, 2022 December 31, 2021 Research and development $ 297 $ 894 General and administrative 106 183 Payroll and related 297 291 Licensing related — 62 Total accrued expenses $ 700 $ 1,430 | ACCRUED EXPENSES Accrued expenses consisted of: December 31, 2021 2020 Accrued expenses: Research and development $ 894 $ 259 General and administrative 183 156 Payroll and related 291 342 Licensing related 62 81 Other — 9 Total accrued expenses $ 1,430 $ 847 |
PPP NOTE AND CONVERTIBLE NOTES
PPP NOTE AND CONVERTIBLE NOTES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
PPP NOTE AND CONVERTIBLE NOTES | PPP NOTE AND CONVERTIBLE NOTES In May 2020, the Company issued a promissory note under the PPP (the PPP Note) totaling $61. The PPP Note had a stated interest rate of 1% and had a two-year maturity. Payments were required to be made over a 1.5-year period beginning November 1, 2020 unless forgiven. In January 2021, the Company was notified that the loan along with accumulated interest had been forgiven. As a result, the Company recorded income from the extinguishment of its obligation in accordance with ASC 405-20-40-1, disclosed in the amount of $61 included in other income on the accompanying statements of operations and comprehensive loss. The Small Business Administration (SBA) reserves the right to audit any PPP loan, regardless of size. These audits may occur after forgiveness has been granted. In accordance with the CARES Act, all borrowers are required to maintain the PPP loan documentation for six years after the PPP loan was forgiven or repaid in full and to provide that documentation to the SBA upon request. In January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes, for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. The Company identified the mandatory conversion into shares of the Company’s common stock as a redemption feature, which requires bifurcation from the 2021 Convertible Notes and treated it as a derivative liability under ASC 815 as the redemption feature was not clearly and closely related to the debt. The Company evaluated the fair value of the derivative liability. Upon the conversion of the 2021 Convertible Notes to common stock at the closing of the IPO, the embedded derivative liability was remeasured and removed from the balance sheet. | PPP NOTE AND CONVERTIBLE NOTESIn May 2020, the Company issued a promissory note under the PPP (the PPP Note) totaling $61. The note had a stated interest rate of 1% and had a two-year maturity. Payments were required to be made over a 1.5 years period beginning in November 2020 unless forgiven. In January 2021, the Company was notified that the loan along with accumulated interest had been forgiven. As a result, the Company recorded income from the extinguishment of its obligation in the amount of $61 as other income on the accompanying statements of operations and comprehensive loss.In January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes, for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. The Company identified the mandatory conversion into shares of the Company’s common stock as a redemption feature, which requires bifurcation from the 2021 Convertible Notes and treated it as a derivative liability under ASC 815 as the redemption feature was not clearly and closely related to the debt. The Company evaluated the fair value of the derivative liability. Upon the conversion of the 2021 Convertible Notes to common stock at the closing of the IPO, the embedded derivative liability was remeasured and removed from the balance sheet. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANSThe Company maintains a tax-qualified SIMPLE IRA retirement plan which covers all employees. Pursuant to the SIMPLE IRA program, employees are eligible to contribute to an individual SIMPLE IRA account on a tax-deferred basis. The Company makes matching contributions to the employee’s SIMPLE IRA account in an amount up to 3% of the employee’s base salary (subject to applicable IRS compensation limits). Expenses related to Company contributions were $24 and $17 for the years ended December 31, 2021 and 2020, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Employment Agreements The Company has entered into employment contracts with its officers that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. COVID-19 Impact The global COVID-19 pandemic continues to present uncertainty and unforeseeable new risks to the Company’s operations and business plan. The Company has closely monitored recent COVID-19 developments, including the lifting of COVID-19 safety measures, the drop in vaccination rates, the implementation of, and reaction to, vaccine mandates, the spread of new strains or variants of coronavirus (such as the Delta and Omicron variants), and supply chain and labor shortages. In light of these developments, the full impact of the COVID-19 pandemic on the Company’s business, operations and clinical development plans remains uncertain and will vary depending on the pandemic’s future impact on the Company’s clinical trial enrollment (including the Company’s ability to recruit and retain patients), clinical trial sites, CROs, third-party manufacturers, and other third parties with whom we do business, as well as any legal or regulatory consequences resulting therefrom. To the extent possible, the Company is conducting business as usual, with necessary or advisable modifications to employee travel and with most of its employees and consultants working remotely. The Company will continue to actively monitor the COVID-19 pandemic and may take further actions that alter its operations, including those that may be required by federal, state or local authorities, or that the Company determines are in the best interests of its employees and other third parties with whom the Company does business. | COMMITMENTS AND CONTINGENCIES Employment agreements The Company has entered into employment contracts with its officers that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. Litigation In November 2021, the Company was named as a defendant in a putative class action lawsuit filed in the California Superior Court, County of Los Angeles, styled Rendon v. Vallon, Inc., et al . The complaint brought one claim for violation of California’s Unruh Civil Rights Act (Unruh Act), alleging that the Company’s website is not compatible with software used by vision-impaired individuals. The Company settled the lawsuit for an immaterial amount . COVID-19 Impact The global COVID-19 pandemic continues to present uncertainty and unforeseeable new risks to the Company’s operations and business plan. The Company has closely monitored recent COVID-19 developments, including states’ lifting COVID-19 safety measures, drops in vaccination rates, and the spread of various coronavirus strains such as the Delta and Omicron variants. In light of these developments, the full impact of the COVID-19 pandemic on the Company’s business, operations and clinical development plans remains uncertain and will vary depending on the pandemic’s future impact on its clinical trial enrollment, clinical trial sites, clinical research organizations (CROs), third-party manufacturers, and other third parties with whom the Company does business, as well as any legal or regulatory consequences resulting therefrom. To the extent possible, the Company |
STOCKHOLDERS EQUITY (DEFICIT)
STOCKHOLDERS EQUITY (DEFICIT) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
STOCKHOLDERS EQUITY (DEFICIT) | STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock In February 2021, the Company completed the IPO of 2,250,000 shares of common stock at a public offering price of $8.00 per share. The gross proceeds from the IPO, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, were $18,000. Underwriting discounts and expenses totaled $1,600 and the Company incurred approximately $905 of additional expenses related to completing the IPO for aggregate net proceeds were approximately $15,500. On May 17, 2022, the Company sold 3,700,000 shares of common stock pursuant to a securities purchase agreement at a purchase price of $1.0632 per share in a registered direct offering (the Offering). The gross proceeds from the Offering were approximately $3,900, before deducting fees payable to the placement agent and other estimated offering expenses payable by the Company of approximately $572 of which $85 related to the warrants was expensed. Common Stock Warrants In connection with the IPO, the Company granted the underwriters warrants (the Underwriters' Warrants) to purchase an aggregate of 112,500 shares of common stock at an exercise price of $10.00 per share. The Underwriters’ Warrants have a five-year term and are not exercisable prior to August 12, 2021. The warrants were classified as equity and the fair value of $399 is reflected as additional paid-in capital. The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.16 % In connection with the Offering, the Company issued warrants to purchase an aggregate of 3,700,000 shares of common stock at an exercise price of $0.9382 per share. The warrants have a five-year term. The warrants were classified as a liability and are revalued at each balance sheet date. On July 25, 2022, the Company amended the terms of the warrants issued in May 2022 to obligate each warrant holder who signed the warrant amendment (Applicable Holder) to effect a cashless exercise, in whole, by August 10, 2022 (the Expiration Date). The warrant amendment entitled the Applicable Holder to receive one share of common stock for each warrant in lieu of the aggregate number of shares of common stock that would have been received using the cashless exercise formula set forth in the warrant agreement (Alternate Cashless Exercise). If the warrants held by the Applicable Holders were not exercised by the Expiration Date, they were automatically exercised pursuant to the Alternate Cashless Exercise. A total of 2,220,000 warrants were exercised pursuant to the Alternate Cashless Exercise. As a result of the warrant conversion, the Company recognized a $573 reversal of the warrant liability and a loss of $388. The fair value of $225 as of September 30, 2022 is reflected in warrant liability on the accompanying Balance Sheets (Note 4). As of September 30, 2022, the Company had the following warrants outstanding to purchase common stock. Number of Shares Exercise Price per Share Expiration Date 112,500 $10.00 February 12, 2026 1,480,000 $0.9382 May 17, 2027 | STOCKHOLDERS EQUITY (DEFICIT) Common Stock In February 2021, the Company completed its IPO of 2,250,000 shares of common stock at a public offering price of $8.00 per share. As a result of the IPO, the Company received approximately $15,500 in net proceeds, after deducting discounts and commissions of $1,600 and offering expenses of approximately $905. Common Stock Warrants In connection with the IPO, the Company granted the underwriters warrants (the Underwriters' Warrants) to purchase an aggregate of 112,500 shares of common stock at an exercise price of $10.00 per share. The Underwriters’ Warrants have a five-year term and became exercisable after August 12, 2021. The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.155 % As of December 31, 2021, all of the Underwriters’ Warrants were outstanding. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company recorded stock-based compensation related to stock options and restricted stock units (RSUs) issued under the Company’s 2018 Equity Incentive Plan (2018 Plan) in the following expense categories of its accompanying statements of operations for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Research and development $ (97) $ 22 $ (208) $ 61 General and administrative (39) 112 168 379 Total $ (136) $ 134 $ (40) $ 440 Stock Options The Company has granted stock options to purchase its common stock to employees and consultants under the 2018 Plan, under which the Company may issue stock options, restricted stock and other equity-based awards. The Company has also granted certain stock options outside of the 2018 Plan. Stock options granted by the Company generally have a contractual life of up to 10 years. The Company measures equity-based awards granted to employees, and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period or performance-based period, which is generally the vesting period of the respective award. The measurement date for service-based equity awards is the date of grant, and equity-based compensation costs are recognized as expense over the requisite service period, which is the vesting period for certain performance-based awards. The Company records expense for performance-based awards if it concludes that it is probable that the performance condition will be achieved. During the three and nine month periods ended September 30, 2022, the Company reversed stock based compensation related to performance awards with performance conditions deemed not probable of achievement. The table below represents the activity of stock options granted to employees and non-employees for the nine months ended September 30, 2022: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Granted 204,500 $ 5.22 Exercised — — Forfeited 216,406 4.06 Outstanding at September 30, 2022 696,584 $ 3.93 8.30 Exercisable at September 30, 2022 315,991 $ 3.37 7.77 The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Nine Months Ended September 30, 2022 2021 Volatility 90.39 % 83.50 % Expected term in years 5.98 5.90 Dividend rate 0.00 % 0.00 % Risk-free interest rate 2.00 % 0.99 % Fair value of option on grant date $ 3.86 $ 3.87 At September 30, 2022, the unrecognized compensation cost related to unvested stock options expected to vest was $839. This unrecognized compensation is expected to be recognized over a weighted-average amortization period of 2.85 years. Restricted Stock Units The Company has issued performance-based and time-based RSUs. Vesting of the performance-based RSUs is subject to the achievement of certain milestones. The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2022: Shares Outstanding at December 31, 2021 — Granted 188,023 Vested and settled — Expired/forfeited/canceled — Outstanding at September 30, 2022 188,023 During the nine months ended September 30, 2022, the Company granted 188,023 RSUs at a weighted average grant date fair value of $0.5683, of which 150,000 were performance-based RSUs and 38,023 were time-based RSUs. As of September 30, 2022, the milestones associated with the performance-based RSUs were not probable of achievement, and accordingly, no stock-based compensation expense has been recognized for these awards. Compensation expense related to time-based RSUs was $6 for the nine months ended September 30, 2022. The unrecognized compensation cost related to unvested performance-based RSUs was $83, which will be recognized commencing in the period in which the performance condition is deemed probable of achievement. The | STOCK-BASED COMPENSATION The Company issues stock-based awards pursuant to its 2018 Equity Incentive Plan (the 2018 Plan). The 2018 Plan provides for the granting of stock options, restricted stock, or restricted stock units. The Company's employees, officers, directors and other persons are eligible to receive awards under the Plan. The number of shares of the Company's common stock authorized under the 2018 Plan will automatically increase on January 1st of each year until the expiration of the 2018 Plan, in an amount equal to four percent of the total number of shares of the Company's common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year. The total number of shares authorized for issuance under the 2018 Plan was 621,022 as of December 31, 2021. The amount, terms of grants, and exercisability provisions are determined and set by the Company's board of directors or compensation committee. The Company measures employee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award. Stock-based awards issued to non-employees are revalued until the award vests. The Company recorded stock-based compensation related to stock options issued under the 2018 Plan in the following expense categories of its accompanying statements of operations for the years ended December 31, 2021 and 2020: For the Year Ended December 31, 2021 2020 Research and development $ 83 $ 103 General and administrative 543 51 Total $ 626 $ 154 The Company has granted stock options to purchase its common stock to employees and consultants under the 2018 Plan that generally have a contractual life of up to 10 years. The Company has also granted certain stock options outside of the 2018 Plan. As of December 31, 2021, all equity awards granted from the 2018 Plan were in the form of stock options. The Company measures equity-based awards granted to employees, and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period or performance-based period, which is generally the vesting period of the respective award. The measurement date for equity awards is the date of grant, and equity-based compensation costs are recognized as expense over the requisite service period, which is the vesting period or for certain performance-based awards. The Company records the expense for these awards if it concludes that it is probable that the performance condition will be achieved. The table below represents the activity of stock options granted to employees and non-employees for the year ended December 31, 2021: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2020 266,250 $ 2.94 8.22 Granted 442,240 $ 4.00 Exercised — — Forfeited — — Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Exercisable at December 31, 2021 205,888 $ 2.94 7.80 Vested and expected to vest at December 31, 2021 708,490 $ 3.60 8.64 The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Year Ended December 31, 2021 2020 Volatility 83.78 % 85.00 % Expected term in years 5.85 5.80 Dividend rate 0.00 % 0.00 % Risk-free interest rate 1.01 % 0.64 % Fair value of common stock on grant date $ 4.00 $ 4.72 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX A reconciliation of income tax expense (benefit) at the US federal statutory income tax rate and the income tax provision in the financial statements is as follows: December 31, 2021 2020 Expected income tax benefit at the federal statutory rate 21.0 % 21.0 % State and local taxes, net of federal benefit 10.6 12.8 Non-deductible items and other (0.5) — Prior year provision to return adjustments — 6.4 Change in valuation allowance (31.1) (40.2) Total — % — % Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The principal components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2021 2020 Deferred tax assets: Federal and state net operating loss carryforwards $ 6,617 $ 3,939 Share based compensation 308 97 Lease liabilities 57 96 Accruals and other 98 108 Gross deferred tax assets 7,080 4,240 Less: deferred tax liabilities (70) (94) Less: valuation allowance (7,010) (4,146) Net deferred tax assets $ — $ — Based on the Company’s history of losses, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2021 and 2020. The Company increased its valuation allowance by approximately $2,864 for the year ended December 31, 2021. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support a reversal of the allowance. As of December 31, 2021, the Company had federal, state and local net operating loss carryforwards of $20,125, $20,362, and $15,866, respectively. The federal net operating loss carryforwards do not expire. The state and local losses begin to expire in the year ending December 31, 2038. Under the provisions of Sections 382 and 383 of the Internal Revenue Code (IRC), certain substantial changes in the Company’s ownership may have limited, or may limit in the future, the amount of net operating loss and credit carryforwards that can be used to reduce future income taxes if there has been a significant change in ownership of the Company, as defined by the IRC. Future owner or equity shifts could result in limitations on net operating loss and credit carryforwards. The Company evaluates tax positions for recognition using a more-likely-than-not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. As of December 31, 2021 and 2020, the Company had no unrecognized income tax benefits that would affect the Company’s effective tax rate if recognized. The Company would recognize both accrued interest and penalties related to unrecognized benefits in income tax expense. The Company’s uncertain tax positions yet to be |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. | RELATED PARTY TRANSACTIONS On January 2020, the Company entered into a license agreement with Medice which grants Medice an exclusive license, with the right to grant sublicenses, to develop, use, manufacture, market and sell ADAIR throughout Europe. Medice is responsible for obtaining regulatory approval of ADAIR in the licensed territory. Under the license agreement, Medice paid Vallon a $100 upfront payment and is required to pay milestone payments upon first obtaining regulatory approval to market and sell ADAIR in any country, territory or region in the licensed territory and upon achieving certain annual net sales thresholds. Medice will also pay tiered royalties on annual net sales of ADAIR at rates in the low double-digits. The initial term of the license agreement will expire five years after the date on which Medice first obtains regulatory approval in any country, territory or region in the licensed territory. In January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS Vallon Pharmaceuticals, Inc. (Vallon or the Company), based in Philadelphia, PA was incorporated in Delaware on January 11, 2018, which is the date of inception. The Company is a biopharmaceutical company focused on the development and commercialization of novel abuse-deterrent medications for CNS disorders. The Company’s lead investigational product candidate, ADAIR, is a proprietary, abuse-deterrent oral formulation of immediate-release dextroamphetamine (the main active ingredient in Adderall®) for the treatment of attention-deficit/hyperactivity disorder (ADHD) and narcolepsy. In March 2022, the Company announced that its SEAL study for ADAIR did not reach its primary endpoint, and there is no assurance that ADAIR will receive approval by the U.S. Food and Drug Administration (the FDA). In addition to ADAIR, the Company completed formulation development work and selected the final formulation of its second product candidate, ADMIR, an abuse deterrent formulation of methylphenidate (Ritalin®), for the treatment of ADHD. Recent Developments The SEAL study ( S tudy to E valuate the A buse L iability, Pharmacokinetics, Safety and Tolerability of an Abuse-Deterrent d-Amphetamine Sulfate Immediate Release Formulation), was the Company’s pivotal intranasal human abuse liability study assessing the pharmacodynamics (PD), pharmacokinetics (PK), safety and tolerability of snorting professional laboratory-manipulated ADAIR 30 mg when compared to crushed d-amphetamine sulfate and placebo in recreational drug users. ADAIR was prepared for snorting by a pharmacist using a multi-step technique that had been developed by a professional laboratory and agreed upon by the FDA. The SEAL study enrolled 55 subjects, of whom 53 completed the study and 52 were included in the final analysis. The study involved a four-way crossover design to evaluate professionally manipulated, intranasal ADAIR 30 mg, crushed intranasal dextroamphetamine, ADAIR 30 mg taken orally, and placebo. All subjects were non-dependent recreational stimulant users with an additional history of recreational intranasal drug use. The SEAL study did not meet its primary endpoint, which was E max Drug Liking. ADAIR scored similarly to what was observed in an earlier proof-of-concept study, however, reference dextroamphetamine did not score as high as expected and as seen in the previous study, thus driving the lack of statistical significance. The SEAL study did meet all pharmacodynamic secondary endpoints including Overall Drug Liking and willingness to Take Drug Again at 12 and 24 hours post-dosing, demonstrating statistical significance. The Company is continuing to assess the best path forward for the ADAIR and ADMIR development programs. In addition, the Company has engaged Ladenburg Thalmann & Co. Inc. (Ladenburg) to evaluate its strategic alternatives with the goal of maximizing stockholder value. Ladenburg has been engaged to advise the Company on the strategic review process, which could include, without limitation, exploring the potential for a possible merger, business combination, investment into the Company, or a purchase, license or other acquisition of assets. In the meantime, and in conjunction with the exploration of strategic alternatives, the Company is streamlining its operations in order to preserve its capital and cash resources. | ORGANIZATION AND DESCRIPTION OF BUSINESS Vallon Pharmaceuticals, Inc. (Vallon or the Company) was incorporated in Delaware in January 2018 (inception) and is based in Philadelphia, PA. The Company is a biopharmaceutical company focused on the development and commercialization of novel abuse-deterrent medications for central nervous system (CNS) disorders. The Company’s lead investigational product candidate, ADAIR, is a proprietary, abuse-deterrent oral formulation of immediate-release dextroamphetamine (the main active ingredient in Adderall®) for the treatment of attention-deficit/hyperactivity disorder (ADHD) and narcolepsy. The Company plans to develop other abuse-deterrent products, which have potential for abuse in their current forms, beginning with the development of ADMIR, an abuse deterrent formulation of Ritalin, for which the Company has completed formulation development work. |
LIQUIDITY_2
LIQUIDITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
LIQUIDITY | LIQUIDITY These financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any significant revenues from operations since inception and does not expect to do so in the foreseeable future. The Company has incurred operating losses since its inception and has incurred and accumulated deficit of $27,343 through September 30, 2022. The Company has financed its working capital requirements to date through the issuance of common stock, warrants, convertible notes, short-term promissory notes, and a Paycheck Protection Program (PPP) promissory note. In January 2021, the Company completed a $350 convertible note financing and in February 2021, the Company completed the initial public offering (IPO), raising net proceeds of $15,500. On May 17, 2022, the Company entered into a Securities Purchase Agreement with certain investors (the Securities Purchase Agreement) for the sale of up to 3,700,000 shares of the Company’s common stock, par value $0.0001 per share (the Shares), at a purchase price of $1.0632 per Share in a registered direct offering (the Offering). In a concurrent private placement also pursuant to the Securities Purchase Agreement (the Private Placement), for each Share of common stock purchased by an investor, such investor was entitled receive from the Company an unregistered warrant (the Warrant and, together with the Shares, the Securities) to purchase one Share of common stock. The gross proceeds from the Offering and Private Placement were approximately $3,900, before deducting fees payable to the placement agent and other estimated offering expenses payable by the Company of approximately $572, of which $85 related to the warrants was expensed. As of September 30, 2022, the Company had cash, cash equivalents and marketable securities of approximately $5,151. The Company expects to incur ongoing expenses as it evaluates its plans for the ADAIR and ADMIR programs and strategic alternatives after it announced in March 2022 that the SEAL study of ADAIR for the treatment of ADHD failed to meet statistical significance for its primary endpoint. The Company is currently assessing the best path forward for the ADAIR and ADMIR programs and has no other product candidates undergoing clinical trials. The Company’s future capital requirements are difficult to forecast and will depend on many factors, including but not limited to the terms and timing of any strategic alternatives including a merger or business combination, asset acquisitions or sales, collaborations or licensing arrangements. If the Company raises additional funds by issuing equity securities, its stockholders may experience dilution. Any future debt financing may impose upon it covenants that restrict our operations, including limitations on its ability to incur liens or additional debt, pay dividends, repurchase its common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any equity or debt financing may contain terms that are not favorable to the Company or its stockholders. If the Company is unable to raise additional funds when needed, it may be required to delay, reduce or terminate some or all of its development programs and clinical trials. The Company may also be required to sell or license to other parties’ rights to develop or commercialize its drug candidates that it would prefer to retain. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The Company expects to continue to incur expenses and operating losses at least for the foreseeable future as it evaluates future plans for the ADAIR and ADMIR programs as well as its strategic alternatives. | LIQUIDITY These financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any significant revenues from operations since inception, and does not expect to do so in the foreseeable future. The Company has incurred operating losses since inception and has incurred $21,902 in accumulated deficit through December 31, 2021. The Company has financed its working capital requirements to date through the issuance of common stock, convertible notes, short-term promissory notes, and a Paycheck Protection Program (PPP) note. In January 2021, the Company completed a $350 convertible note financing and in February 2021, the Company closed on its initial public offering (IPO) raising net proceeds of approximately $15,500. As of December 31, 2021, the Company had cash, cash equivalents and marketable securities of approximately $7,510, which management expects will provide funding for its ongoing business activities into the third quarter of 2022. The Company’s ability to continue as a going concern is dependent on its ability to raise substantial additional capital to fund its business activities, including its research and development program. The Company intends to raise capital through additional issuances of common stock and /or short-term notes, but there can be no assurances any such financing will be available when needed or that the Company’s research and development efforts will be successful. If the Company is not able to obtain additional financing on acceptable terms and in the amounts necessary to fully fund its future operating requirements, it may be forced to reduce or discontinue its operations entirely. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial periods and pursuant to the rules of the Securities and Exchange Commission. References in this Quarterly Report on Form 10-Q to “authoritative guidance” is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The December 31, 2021 balance sheet was derived from audited financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of September 30, 2022, and the results of operations and stockholders’ equity (deficit) for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. Results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2022. The unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 14, 2022. Recapitalization Immediately prior to the closing of the IPO (Note 7), the Company effected a one-for-40 reverse stock split of its common stock. All share and per share amounts, excluding the number of authorized shares and par value, contained in these financial statements and accompanying notes, and this Quarterly Report on Form 10-Q give retroactive effect to the reverse split. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, the embedded derivative of convertible notes, warrant issuance and subsequent warrant revaluations, valuation allowances relating to deferred tax assets, revenue recognition, accrued expenses and estimation of the incremental borrowing rate for the finance lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Warrant Liabilities, Change in Fair Value and Warrant Conversion The Company evaluated the warrants issued in connection with the May 2022 registered direct financing (Note 7) in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the warrants related to the reduction of the exercise price in certain circumstances precludes the warrants from being accounted for as components of equity. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the accompanying Balance Sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement , with changes in fair value recognized in the accompanying Statements of Operations and Comprehensive Loss in the period of change. The derivative liabilities will ultimately be converted into the Company’s common stock when the warrants are exercised, or will be extinguished upon expiry of the warrant term. Upon exercise, the intrinsic value of the shares issued is transferred to stockholders’ equity. The difference between the intrinsic value of the stock issued and the fair value of the warrant is recorded as gain or loss on the exchange in the accompanying Statements of Operations and Comprehensive Loss in the period of exercise. Stock-based Compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and depends upon a number of factors including the Company's market value and the financial objectives of the option holders. These estimates can have a material impact on the stock compensation expense but will have no impact on the cash flows. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period the estimates are revised. The Company uses the expected term, rather than the contractual term, for both employee and consultant options issued. Recent Accounting Pronouncements The Company considered the applicability and impact of all ASUs issued during the quarter ended September 30, 2022 and each was determined to be either not applicable or expected to have minimal impact on these financial statements. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES References in this Annual Report on Form 10-K to “authoritative guidance” is meant to refer to accounting principles generally accepted in the United States of America (GAAP) as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). Recapitalization Immediately prior to the closing of the IPO (Note 10), the Company effected a one-for-40 reverse stock split of its common stock. All share and per share amounts, excluding the number of authorized shares and par value, contained in these financial statements and accompanying notes, and this Annual Report on Form 10-K give retroactive effect to the reverse split. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, the embedded derivative of convertible notes, warrant issuance, valuation allowances relating to deferred tax assets, revenue recognition, accrued expenses and estimation of the incremental borrowing rate for the finance lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. Concentration of credit risk The Company from time to time during the period covered by these financial statements may have had bank account balances in excess of federally insured limits. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Cash equivalents Cash equivalents are highly-liquid investments that are readily convertible into cash with original maturities of three months or less when purchased and as of December 31, 2021 and 2020 included investment in money market funds. Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Amortization of premiums and discounts on marketable securities are included in interest expense, net on the statements of operations and comprehensive loss. Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Fair value of financial instruments The Company follows ASC 820, Fair Value Measurements and Disclosures (ASC 820), to measure the fair value of its financial statements and disclosures about fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lower priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The Company uses this framework for measuring fair value and disclosures about fair value measurement. The Company uses fair value measurements in areas that include derivative instruments. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. The carrying amounts reported in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, and note payable approximate their fair value based on the short-term maturity of these instruments. Property and equipment Property and equipment are stated at cost. The Company commences depreciation when the asset is placed in service. Computers and peripheral equipment are depreciated on a straight-line method over useful lives of three years. Leases The Company determines whether an arrangement is a lease at contract inception by establishing if the contract conveys the right to use, or control the use of, identified property, plant, or equipment for a period of time in exchange for consideration. Leases may be classified as finance leases or operating leases. Lease right-of-use (ROU) assets and lease liabilities recognized in the accompanying balance sheet represent the right to use an underlying asset for the lease term and an obligation to make lease payments arising from the lease respectively. At each reporting date, the finance lease liabilities are increased by interest and reduced by repayments made under the lease agreements. The ROU asset is subsequently measured at the amount of the remeasured lease liability (i.e. the present value of the remaining lease payments), any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, and any unamortized initial direct costs. Licensing revenues The Company has a license agreement (the Medice License Agreement) with MEDICE Arzneimittel Pütter GmbH & Co. KG (Medice), a related party (Note 13). The license agreement provides for an exclusive license to develop, use, manufacture, market and sell ADAIR throughout Europe, a non-refundable up-front payment, potential regulatory and sales milestones and potential royalty payments. The Company analyzed the performance obligations under the license agreements, the consideration received to date and the consideration the Company could receive in the future as part of its analysis in accordance with ASC 606– Revenue from Contracts with Customers (ASC 606). The Company recognized $100 as licensing revenue during the year ended December 31, 2020. No licensing revenue was recognized during the year ended December 31, 2021. Research and development Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. Stock-based compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and depends upon a number of factors including the Company's market value and the financial objectives of the option holders. These estimates can have a material impact on the stock compensation expense but will have no impact on the cash flows. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period the estimates are revised. The Company uses the expected term, rather than the contractual term, for both employee and consultant options issued. Derivative instruments The Company evaluated its convertible notes to determine if those contracts or embedded components of those contracts qualified as derivatives to be separately accounted for in accordance with ASC 815, Derivatives and Hedging . The result of this accounting treatment is that the fair value of the embedded derivative is marked to market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheets as current or non-current to correspond with its host instrument. Income taxes Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company's financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on the weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2021 and 2020, the Company concluded that a full valuation allowance was necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. Net loss per common share Basic net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share . Recent accounting pronouncements The Company considers the applicability and impact of all ASUs. ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the financial statements. On January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending the existing guidance. The adoption of this standard did not have a material impact on the Company’s financial statements. |
MARKETABLE SECURITIES AND FAI_2
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS Marketable Securities The following is a summary of the Company’s available for sale securities as of the dates indicated: As of September 30, 2022 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 150 $ — $ — $ 150 Municipal bonds 270 — (1) 269 Total $ 420 $ — $ (1) $ 419 As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820, Fair Value Measurement , establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). As of September 30, 2022, the Company’s financial instruments included cash and cash equivalents, marketable securities, prepaid expenses and other current assets, accounts payable, accrued expenses, and the warrant liability. The carrying amounts reported in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2022: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets: Marketable securities, available-for-sale $ — $ 419 $ — Liabilities: Warrant liability $ — $ — $ 225 On May 17, 2022, the Company issued 3,700,000 shares of common stock pursuant to a securities purchase agreement at a purchase price of $1.0632 per share in a registered direct offering (Note 7). In connection with the registered direct offering, the Company issued warrants to purchase an aggregate of 3,700,000 shares of common stock at an exercise price of $0.9382 per share. The warrants were classified as a liability in accordance with ASC 815-40 and the fair value of $225 is reflected in warrant liability on the accompanying Balance Sheets. The warrant liability was measured at fair value at inception and is revalued at each financial statement date, with changes in fair value presented within change in fair value of warrant liability in the accompanying Statements of Operations and Comprehensive Loss. On July 25, 2022, the Company amended the terms of the warrants issued in May 2022 to obligate each warrant holder who signed the warrant amendment (Applicable Holder) to effect a cashless exercise, in whole, by August 10, 2022 (the Expiration Date). The warrant amendment entitled the Applicable Holder to receive one share of common stock for each warrant in lieu of the aggregate number of shares of common stock that would have been received using the cashless exercise formula set forth in the warrant agreement (Alternate Cashless Exercise). If the warrants held by the Applicable Holders were not exercised by the Expiration Date, they were automatically exercised pursuant to the Alternate Cashless Exercise. A total of 2,220,000 warrants were exercised pursuant to the Alternate Cashless Exercise. As a result of the warrant conversion, the Company recognized a $573 reversal of the warrant liability. The following table presents the changes is the fair value of the Level 3 liability: Warrant Fair value as of December 31, 2021 $ — Initial measurement on May 17, 2022 1,288 Warrant conversion (573) Change in valuation (490) Balance as of September 30, 2022 $ 225 The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: (Initial Measurement) May 17, September 30, 2022 Volatility 130.8 % 133.3 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 2.67 % 4.24 % The fair value of the embedded derivative liability identified in the 2021 Convertible Notes (Note 6) was a Level 3 fair value measurement. As of February 12, 2021, the embedded derivative was remeasured based upon the conversion price of $8.00 per share upon closing of the IPO. As such, an expense of $89 was recorded during the nine months ended September 30, 2021. The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities: As of September 30, 2022 Due in 1 year $ 419 Due in 1-5 years — Due in 5-10 years — Due after 10 years — Total $ 419 | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS Marketable Securities The following is a summary of the Company’s available-for-sale securities as of the dates indicated: As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 All of the Company’s investments in marketable debt securities are accounted for as available-for-sale securities and have contractual maturity dates of one year or less. Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. As of December 31, 2021, all of the Company’s marketable securities were classified as Level 2 assets. The fair value of the embedded derivative liability identified in the 2021 Convertible Notes was a Level 3 fair value measurement. As of February 12, 2021, the embedded derivative was remeasured based upon the conversion price of $8.00 per share upon closing of the IPO. As such, an expense of $89 was recorded in the first quarter of 2021. The following table presents the activity for the liability measured at estimated fair value using unobservable inputs for the year ended December 31, 2021: Beginning balance, January 1, 2021 $ — Additions during the year ended December 31, 2021 89 Transfer out of Level 3 89 Balance at December 31, 2021 $ — |
ACCRUED EXPENSES_2
ACCRUED EXPENSES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following: September 30, 2022 December 31, 2021 Research and development $ 297 $ 894 General and administrative 106 183 Payroll and related 297 291 Licensing related — 62 Total accrued expenses $ 700 $ 1,430 | ACCRUED EXPENSES Accrued expenses consisted of: December 31, 2021 2020 Accrued expenses: Research and development $ 894 $ 259 General and administrative 183 156 Payroll and related 291 342 Licensing related 62 81 Other — 9 Total accrued expenses $ 1,430 $ 847 |
PPP NOTE AND CONVERTIBLE NOTE_2
PPP NOTE AND CONVERTIBLE NOTES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
PPP NOTE AND CONVERTIBLE NOTES | PPP NOTE AND CONVERTIBLE NOTES In May 2020, the Company issued a promissory note under the PPP (the PPP Note) totaling $61. The PPP Note had a stated interest rate of 1% and had a two-year maturity. Payments were required to be made over a 1.5-year period beginning November 1, 2020 unless forgiven. In January 2021, the Company was notified that the loan along with accumulated interest had been forgiven. As a result, the Company recorded income from the extinguishment of its obligation in accordance with ASC 405-20-40-1, disclosed in the amount of $61 included in other income on the accompanying statements of operations and comprehensive loss. The Small Business Administration (SBA) reserves the right to audit any PPP loan, regardless of size. These audits may occur after forgiveness has been granted. In accordance with the CARES Act, all borrowers are required to maintain the PPP loan documentation for six years after the PPP loan was forgiven or repaid in full and to provide that documentation to the SBA upon request. In January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes, for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. The Company identified the mandatory conversion into shares of the Company’s common stock as a redemption feature, which requires bifurcation from the 2021 Convertible Notes and treated it as a derivative liability under ASC 815 as the redemption feature was not clearly and closely related to the debt. The Company evaluated the fair value of the derivative liability. Upon the conversion of the 2021 Convertible Notes to common stock at the closing of the IPO, the embedded derivative liability was remeasured and removed from the balance sheet. | PPP NOTE AND CONVERTIBLE NOTESIn May 2020, the Company issued a promissory note under the PPP (the PPP Note) totaling $61. The note had a stated interest rate of 1% and had a two-year maturity. Payments were required to be made over a 1.5 years period beginning in November 2020 unless forgiven. In January 2021, the Company was notified that the loan along with accumulated interest had been forgiven. As a result, the Company recorded income from the extinguishment of its obligation in the amount of $61 as other income on the accompanying statements of operations and comprehensive loss.In January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes, for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. The Company identified the mandatory conversion into shares of the Company’s common stock as a redemption feature, which requires bifurcation from the 2021 Convertible Notes and treated it as a derivative liability under ASC 815 as the redemption feature was not clearly and closely related to the debt. The Company evaluated the fair value of the derivative liability. Upon the conversion of the 2021 Convertible Notes to common stock at the closing of the IPO, the embedded derivative liability was remeasured and removed from the balance sheet. |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
STOCKHOLDERS EQUITY (DEFICIT) | STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock In February 2021, the Company completed the IPO of 2,250,000 shares of common stock at a public offering price of $8.00 per share. The gross proceeds from the IPO, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, were $18,000. Underwriting discounts and expenses totaled $1,600 and the Company incurred approximately $905 of additional expenses related to completing the IPO for aggregate net proceeds were approximately $15,500. On May 17, 2022, the Company sold 3,700,000 shares of common stock pursuant to a securities purchase agreement at a purchase price of $1.0632 per share in a registered direct offering (the Offering). The gross proceeds from the Offering were approximately $3,900, before deducting fees payable to the placement agent and other estimated offering expenses payable by the Company of approximately $572 of which $85 related to the warrants was expensed. Common Stock Warrants In connection with the IPO, the Company granted the underwriters warrants (the Underwriters' Warrants) to purchase an aggregate of 112,500 shares of common stock at an exercise price of $10.00 per share. The Underwriters’ Warrants have a five-year term and are not exercisable prior to August 12, 2021. The warrants were classified as equity and the fair value of $399 is reflected as additional paid-in capital. The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.16 % In connection with the Offering, the Company issued warrants to purchase an aggregate of 3,700,000 shares of common stock at an exercise price of $0.9382 per share. The warrants have a five-year term. The warrants were classified as a liability and are revalued at each balance sheet date. On July 25, 2022, the Company amended the terms of the warrants issued in May 2022 to obligate each warrant holder who signed the warrant amendment (Applicable Holder) to effect a cashless exercise, in whole, by August 10, 2022 (the Expiration Date). The warrant amendment entitled the Applicable Holder to receive one share of common stock for each warrant in lieu of the aggregate number of shares of common stock that would have been received using the cashless exercise formula set forth in the warrant agreement (Alternate Cashless Exercise). If the warrants held by the Applicable Holders were not exercised by the Expiration Date, they were automatically exercised pursuant to the Alternate Cashless Exercise. A total of 2,220,000 warrants were exercised pursuant to the Alternate Cashless Exercise. As a result of the warrant conversion, the Company recognized a $573 reversal of the warrant liability and a loss of $388. The fair value of $225 as of September 30, 2022 is reflected in warrant liability on the accompanying Balance Sheets (Note 4). As of September 30, 2022, the Company had the following warrants outstanding to purchase common stock. Number of Shares Exercise Price per Share Expiration Date 112,500 $10.00 February 12, 2026 1,480,000 $0.9382 May 17, 2027 | STOCKHOLDERS EQUITY (DEFICIT) Common Stock In February 2021, the Company completed its IPO of 2,250,000 shares of common stock at a public offering price of $8.00 per share. As a result of the IPO, the Company received approximately $15,500 in net proceeds, after deducting discounts and commissions of $1,600 and offering expenses of approximately $905. Common Stock Warrants In connection with the IPO, the Company granted the underwriters warrants (the Underwriters' Warrants) to purchase an aggregate of 112,500 shares of common stock at an exercise price of $10.00 per share. The Underwriters’ Warrants have a five-year term and became exercisable after August 12, 2021. The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.155 % As of December 31, 2021, all of the Underwriters’ Warrants were outstanding. |
STOCK-BASED COMPENSATION_2
STOCK-BASED COMPENSATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company recorded stock-based compensation related to stock options and restricted stock units (RSUs) issued under the Company’s 2018 Equity Incentive Plan (2018 Plan) in the following expense categories of its accompanying statements of operations for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Research and development $ (97) $ 22 $ (208) $ 61 General and administrative (39) 112 168 379 Total $ (136) $ 134 $ (40) $ 440 Stock Options The Company has granted stock options to purchase its common stock to employees and consultants under the 2018 Plan, under which the Company may issue stock options, restricted stock and other equity-based awards. The Company has also granted certain stock options outside of the 2018 Plan. Stock options granted by the Company generally have a contractual life of up to 10 years. The Company measures equity-based awards granted to employees, and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period or performance-based period, which is generally the vesting period of the respective award. The measurement date for service-based equity awards is the date of grant, and equity-based compensation costs are recognized as expense over the requisite service period, which is the vesting period for certain performance-based awards. The Company records expense for performance-based awards if it concludes that it is probable that the performance condition will be achieved. During the three and nine month periods ended September 30, 2022, the Company reversed stock based compensation related to performance awards with performance conditions deemed not probable of achievement. The table below represents the activity of stock options granted to employees and non-employees for the nine months ended September 30, 2022: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Granted 204,500 $ 5.22 Exercised — — Forfeited 216,406 4.06 Outstanding at September 30, 2022 696,584 $ 3.93 8.30 Exercisable at September 30, 2022 315,991 $ 3.37 7.77 The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Nine Months Ended September 30, 2022 2021 Volatility 90.39 % 83.50 % Expected term in years 5.98 5.90 Dividend rate 0.00 % 0.00 % Risk-free interest rate 2.00 % 0.99 % Fair value of option on grant date $ 3.86 $ 3.87 At September 30, 2022, the unrecognized compensation cost related to unvested stock options expected to vest was $839. This unrecognized compensation is expected to be recognized over a weighted-average amortization period of 2.85 years. Restricted Stock Units The Company has issued performance-based and time-based RSUs. Vesting of the performance-based RSUs is subject to the achievement of certain milestones. The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2022: Shares Outstanding at December 31, 2021 — Granted 188,023 Vested and settled — Expired/forfeited/canceled — Outstanding at September 30, 2022 188,023 During the nine months ended September 30, 2022, the Company granted 188,023 RSUs at a weighted average grant date fair value of $0.5683, of which 150,000 were performance-based RSUs and 38,023 were time-based RSUs. As of September 30, 2022, the milestones associated with the performance-based RSUs were not probable of achievement, and accordingly, no stock-based compensation expense has been recognized for these awards. Compensation expense related to time-based RSUs was $6 for the nine months ended September 30, 2022. The unrecognized compensation cost related to unvested performance-based RSUs was $83, which will be recognized commencing in the period in which the performance condition is deemed probable of achievement. The | STOCK-BASED COMPENSATION The Company issues stock-based awards pursuant to its 2018 Equity Incentive Plan (the 2018 Plan). The 2018 Plan provides for the granting of stock options, restricted stock, or restricted stock units. The Company's employees, officers, directors and other persons are eligible to receive awards under the Plan. The number of shares of the Company's common stock authorized under the 2018 Plan will automatically increase on January 1st of each year until the expiration of the 2018 Plan, in an amount equal to four percent of the total number of shares of the Company's common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year. The total number of shares authorized for issuance under the 2018 Plan was 621,022 as of December 31, 2021. The amount, terms of grants, and exercisability provisions are determined and set by the Company's board of directors or compensation committee. The Company measures employee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award. Stock-based awards issued to non-employees are revalued until the award vests. The Company recorded stock-based compensation related to stock options issued under the 2018 Plan in the following expense categories of its accompanying statements of operations for the years ended December 31, 2021 and 2020: For the Year Ended December 31, 2021 2020 Research and development $ 83 $ 103 General and administrative 543 51 Total $ 626 $ 154 The Company has granted stock options to purchase its common stock to employees and consultants under the 2018 Plan that generally have a contractual life of up to 10 years. The Company has also granted certain stock options outside of the 2018 Plan. As of December 31, 2021, all equity awards granted from the 2018 Plan were in the form of stock options. The Company measures equity-based awards granted to employees, and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period or performance-based period, which is generally the vesting period of the respective award. The measurement date for equity awards is the date of grant, and equity-based compensation costs are recognized as expense over the requisite service period, which is the vesting period or for certain performance-based awards. The Company records the expense for these awards if it concludes that it is probable that the performance condition will be achieved. The table below represents the activity of stock options granted to employees and non-employees for the year ended December 31, 2021: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2020 266,250 $ 2.94 8.22 Granted 442,240 $ 4.00 Exercised — — Forfeited — — Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Exercisable at December 31, 2021 205,888 $ 2.94 7.80 Vested and expected to vest at December 31, 2021 708,490 $ 3.60 8.64 The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Year Ended December 31, 2021 2020 Volatility 83.78 % 85.00 % Expected term in years 5.85 5.80 Dividend rate 0.00 % 0.00 % Risk-free interest rate 1.01 % 0.64 % Fair value of common stock on grant date $ 4.00 $ 4.72 |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. | RELATED PARTY TRANSACTIONS On January 2020, the Company entered into a license agreement with Medice which grants Medice an exclusive license, with the right to grant sublicenses, to develop, use, manufacture, market and sell ADAIR throughout Europe. Medice is responsible for obtaining regulatory approval of ADAIR in the licensed territory. Under the license agreement, Medice paid Vallon a $100 upfront payment and is required to pay milestone payments upon first obtaining regulatory approval to market and sell ADAIR in any country, territory or region in the licensed territory and upon achieving certain annual net sales thresholds. Medice will also pay tiered royalties on annual net sales of ADAIR at rates in the low double-digits. The initial term of the license agreement will expire five years after the date on which Medice first obtains regulatory approval in any country, territory or region in the licensed territory. In January 2021, the Company entered into a Convertible Promissory Note Purchase Agreement with certain existing stockholders, including Salmon Pharma, an affiliate of Medice, and David Baker, the Company’s Chief Executive Officer, pursuant to which the Company issued the 2021 Convertible Notes for cash proceeds of $350. The 2021 Convertible Notes bore an interest rate of 7.0% per annum, non-compounding, and had a maturity date of September 30, 2021. The 2021 Convertible Notes converted into 54,906 shares of the Company’s common stock upon completion of the IPO. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Employment Agreements The Company has entered into employment contracts with its officers that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. COVID-19 Impact The global COVID-19 pandemic continues to present uncertainty and unforeseeable new risks to the Company’s operations and business plan. The Company has closely monitored recent COVID-19 developments, including the lifting of COVID-19 safety measures, the drop in vaccination rates, the implementation of, and reaction to, vaccine mandates, the spread of new strains or variants of coronavirus (such as the Delta and Omicron variants), and supply chain and labor shortages. In light of these developments, the full impact of the COVID-19 pandemic on the Company’s business, operations and clinical development plans remains uncertain and will vary depending on the pandemic’s future impact on the Company’s clinical trial enrollment (including the Company’s ability to recruit and retain patients), clinical trial sites, CROs, third-party manufacturers, and other third parties with whom we do business, as well as any legal or regulatory consequences resulting therefrom. To the extent possible, the Company is conducting business as usual, with necessary or advisable modifications to employee travel and with most of its employees and consultants working remotely. The Company will continue to actively monitor the COVID-19 pandemic and may take further actions that alter its operations, including those that may be required by federal, state or local authorities, or that the Company determines are in the best interests of its employees and other third parties with whom the Company does business. | COMMITMENTS AND CONTINGENCIES Employment agreements The Company has entered into employment contracts with its officers that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. Litigation In November 2021, the Company was named as a defendant in a putative class action lawsuit filed in the California Superior Court, County of Los Angeles, styled Rendon v. Vallon, Inc., et al . The complaint brought one claim for violation of California’s Unruh Civil Rights Act (Unruh Act), alleging that the Company’s website is not compatible with software used by vision-impaired individuals. The Company settled the lawsuit for an immaterial amount . COVID-19 Impact The global COVID-19 pandemic continues to present uncertainty and unforeseeable new risks to the Company’s operations and business plan. The Company has closely monitored recent COVID-19 developments, including states’ lifting COVID-19 safety measures, drops in vaccination rates, and the spread of various coronavirus strains such as the Delta and Omicron variants. In light of these developments, the full impact of the COVID-19 pandemic on the Company’s business, operations and clinical development plans remains uncertain and will vary depending on the pandemic’s future impact on its clinical trial enrollment, clinical trial sites, clinical research organizations (CROs), third-party manufacturers, and other third parties with whom the Company does business, as well as any legal or regulatory consequences resulting therefrom. To the extent possible, the Company |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, the embedded derivative of convertible notes, warrant issuance and subsequent warrant revaluations, valuation allowances relating to deferred tax assets, revenue recognition, accrued expenses and estimation of the incremental borrowing rate for the finance lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and |
Concentration Credit Risk | Concentration of credit risk The Company from time to time during the period covered by these financial statements may have had bank account balances in excess of federally insured limits. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. | |
Cash Equivalents | Cash equivalentsCash equivalents are highly-liquid investments that are readily convertible into cash with original maturities of three months or less when purchased and as of December 31, 2021 and 2020 included investment in money market funds. | |
Marketable Securities | Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. | Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Amortization of premiums and discounts on marketable securities are included in interest expense, net on the statements of operations and comprehensive loss. Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company follows ASC 820, Fair Value Measurements and Disclosures (ASC 820), to measure the fair value of its financial statements and disclosures about fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lower priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input | |
Property and Equipment | Property and equipmentProperty and equipment are stated at cost. The Company commences depreciation when the asset is placed in service. Computers and peripheral equipment are depreciated on a straight-line method over useful lives of three years. | |
Leases | Leases The Company determines whether an arrangement is a lease at contract inception by establishing if the contract conveys the right to use, or control the use of, identified property, plant, or equipment for a period of time in exchange for consideration. Leases may be classified as finance leases or operating leases. Lease right-of-use (ROU) assets and lease liabilities recognized in the accompanying balance sheet represent the right to use an underlying asset for the lease term and an obligation to make lease payments arising from the lease respectively. At each reporting date, the finance lease liabilities are increased by interest and reduced by repayments made under the lease agreements. The ROU asset is subsequently measured at the amount of the remeasured lease liability (i.e. the present value of the remaining lease payments), any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, and any unamortized initial direct costs. | |
Licensing Revenue | Licensing revenues The Company has a license agreement (the Medice License Agreement) with MEDICE Arzneimittel Pütter GmbH & Co. KG (Medice), a related party (Note 13). The license agreement provides for an exclusive license to develop, use, manufacture, market and sell ADAIR throughout Europe, a non-refundable up-front payment, potential regulatory and sales milestones and potential royalty payments. The Company analyzed the performance obligations under the license agreements, the consideration received to date and the consideration the Company could receive in the future as part of its analysis in accordance with ASC 606– Revenue from Contracts with Customers | |
Research and Development | Research and development Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. | |
Stock-based Compensation | Stock-based Compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and depends upon a number of factors including the Company's market value and the financial objectives of the option holders. These estimates can have a material impact on the stock compensation expense but will have no impact on the cash flows. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period the estimates are revised. The Company uses the expected term, rather than the contractual term, for both employee and consultant options issued. | Stock-based compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and |
Derivatives Instruments | Warrant Liabilities, Change in Fair Value and Warrant Conversion The Company evaluated the warrants issued in connection with the May 2022 registered direct financing (Note 7) in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the warrants related to the reduction of the exercise price in certain circumstances precludes the warrants from being accounted for as components of equity. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the accompanying Balance Sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement , with changes in fair value recognized in the accompanying Statements of Operations and Comprehensive Loss in the period of change. The derivative liabilities will ultimately be converted into the Company’s common stock when the warrants are exercised, or will be extinguished upon expiry of the warrant term. Upon exercise, the intrinsic value of the shares issued is transferred to stockholders’ equity. The difference between | Derivative instruments The Company evaluated its convertible notes to determine if those contracts or embedded components of those contracts qualified as derivatives to be separately accounted for in accordance with ASC 815, Derivatives and Hedging . The result of this accounting treatment is that the fair value of the embedded derivative is marked to market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheets as current or non-current to correspond with its host instrument. |
Income Taxes | Income taxesIncome taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company's financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on the weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2021 and 2020, the Company concluded that a full valuation allowance was necessary for all of its net deferred tax assets. | |
Loss Per Share | Net loss per common share Basic net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considered the applicability and impact of all ASUs issued during the quarter ended September 30, 2022 and each was determined to be either not applicable or expected to have minimal impact on these financial statements. | Recent accounting pronouncements The Company considers the applicability and impact of all ASUs. ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the financial statements. On January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending the existing guidance. The adoption of this standard did not have a material impact on the Company’s financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Basis of Accounting | The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial periods and pursuant to the rules of the Securities and Exchange Commission. References in this Quarterly Report on Form 10-Q to “authoritative guidance” is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The December 31, 2021 balance sheet was derived from audited financial statements. | |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, the embedded derivative of convertible notes, warrant issuance and subsequent warrant revaluations, valuation allowances relating to deferred tax assets, revenue recognition, accrued expenses and estimation of the incremental borrowing rate for the finance lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and |
Marketable Securities | Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. | Marketable Securities Marketable securities consist of debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income (loss). Amortization of premiums and discounts on marketable securities are included in interest expense, net on the statements of operations and comprehensive loss. Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below the amortized cost basis, any adverse changes in the financial condition of the issuers and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. |
Warrant Liabilities, Change in Fair Value and Warrant Conversion | Warrant Liabilities, Change in Fair Value and Warrant Conversion The Company evaluated the warrants issued in connection with the May 2022 registered direct financing (Note 7) in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the warrants related to the reduction of the exercise price in certain circumstances precludes the warrants from being accounted for as components of equity. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the accompanying Balance Sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement , with changes in fair value recognized in the accompanying Statements of Operations and Comprehensive Loss in the period of change. The derivative liabilities will ultimately be converted into the Company’s common stock when the warrants are exercised, or will be extinguished upon expiry of the warrant term. Upon exercise, the intrinsic value of the shares issued is transferred to stockholders’ equity. The difference between | Derivative instruments The Company evaluated its convertible notes to determine if those contracts or embedded components of those contracts qualified as derivatives to be separately accounted for in accordance with ASC 815, Derivatives and Hedging . The result of this accounting treatment is that the fair value of the embedded derivative is marked to market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheets as current or non-current to correspond with its host instrument. |
Stock-based Compensation | Stock-based Compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and depends upon a number of factors including the Company's market value and the financial objectives of the option holders. These estimates can have a material impact on the stock compensation expense but will have no impact on the cash flows. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period the estimates are revised. The Company uses the expected term, rather than the contractual term, for both employee and consultant options issued. | Stock-based compensation The Company recognizes expense for employee and non-employee stock-based compensation in accordance with ASC Topic 718, Stock-Based Compensation (ASC 718). ASC 718 requires that such transactions be accounted for using a fair value-based method. The estimated fair value of the options is amortized over the vesting period, based on the fair value of the options on the date granted, and is calculated using the Black-Scholes option-pricing model. The Company accounts for forfeitures as incurred. In considering the fair value of the underlying stock when the Company granted options, the Company considered several factors including the fair values established by market transactions. Stock option-based compensation includes estimates and judgments of when stock options might be exercised and stock price volatility. The timing of option exercises is out of the Company's control and |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considered the applicability and impact of all ASUs issued during the quarter ended September 30, 2022 and each was determined to be either not applicable or expected to have minimal impact on these financial statements. | Recent accounting pronouncements The Company considers the applicability and impact of all ASUs. ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the financial statements. On January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending the existing guidance. The adoption of this standard did not have a material impact on the Company’s financial statements. |
MARKETABLE SECURITIES AND FAI_3
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Debt Securities, Available-for-sale | The following is a summary of the Company’s available for sale securities as of the dates indicated: As of September 30, 2022 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 150 $ — $ — $ 150 Municipal bonds 270 — (1) 269 Total $ 420 $ — $ (1) $ 419 As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 | The following is a summary of the Company’s available-for-sale securities as of the dates indicated: As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 All of the Company’s investments in marketable debt securities are accounted for as available-for-sale securities and have contractual maturity dates of one year or less. |
Schedule of Activity for the Liability Measured at Estimated Fair Value Using Unobservable Inputs | The following table presents the changes is the fair value of the Level 3 liability: Warrant Fair value as of December 31, 2021 $ — Initial measurement on May 17, 2022 1,288 Warrant conversion (573) Change in valuation (490) Balance as of September 30, 2022 $ 225 | The following table presents the activity for the liability measured at estimated fair value using unobservable inputs for the year ended December 31, 2021: Beginning balance, January 1, 2021 $ — Additions during the year ended December 31, 2021 89 Transfer out of Level 3 89 Balance at December 31, 2021 $ — |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Finance Lease Cost | The table below presents the finance lease assets and liabilities recognized on the Company's balance sheets: December 31, Balance Sheet Line Item 2021 2020 Non-current finance lease assets Other assets $ 206 $ 279 Finance lease liabilities: Current finance lease liabilities Other current liabilities 97 105 Non-current finance lease liabilities Other liabilities 72 170 Total finance lease liabilities $ 169 $ 275 The Company’s weighted average remaining lease term and weighted average discount rate for its financing lease as of December 31, 2021 are: December 31, 2021 Weighted-average remaining lease term - finance lease 1.75 years Weighted-average discount rate - finance lease 13.50 % Cash flows related to the measurement of financing lease assets and liabilities were as follows: Year Ended December 31, 2021 2020 Operating cash flows from finance lease amortization $ 73 $ 74 Financing cash flows from finance lease payments $ 106 $ 65 |
Schedule of Maturity of Finance Lease Liability | The maturities of the finance lease liability as of December 31, 2021 are as follows: December 31, 2021 2022 $ 114 2023 76 Total lease payments 190 Less: Imputed interest 21 Present value of lease liability $ 169 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Schedule of Accrued Expenses | Accrued expenses consist of the following: September 30, 2022 December 31, 2021 Research and development $ 297 $ 894 General and administrative 106 183 Payroll and related 297 291 Licensing related — 62 Total accrued expenses $ 700 $ 1,430 | Accrued expenses consisted of: December 31, 2021 2020 Accrued expenses: Research and development $ 894 $ 259 General and administrative 183 156 Payroll and related 291 342 Licensing related 62 81 Other — 9 Total accrued expenses $ 1,430 $ 847 |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Fair Value Measurement Inputs and Valuation Techniques | The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: (Initial Measurement) May 17, September 30, 2022 Volatility 130.8 % 133.3 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 2.67 % 4.24 % Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.16 % | The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.155 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Schedule of Stock-based Compensation Expense | The Company recorded stock-based compensation related to stock options and restricted stock units (RSUs) issued under the Company’s 2018 Equity Incentive Plan (2018 Plan) in the following expense categories of its accompanying statements of operations for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Research and development $ (97) $ 22 $ (208) $ 61 General and administrative (39) 112 168 379 Total $ (136) $ 134 $ (40) $ 440 | The Company recorded stock-based compensation related to stock options issued under the 2018 Plan in the following expense categories of its accompanying statements of operations for the years ended December 31, 2021 and 2020: For the Year Ended December 31, 2021 2020 Research and development $ 83 $ 103 General and administrative 543 51 Total $ 626 $ 154 |
Activity of Stock Options Granted | The table below represents the activity of stock options granted to employees and non-employees for the nine months ended September 30, 2022: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Granted 204,500 $ 5.22 Exercised — — Forfeited 216,406 4.06 Outstanding at September 30, 2022 696,584 $ 3.93 8.30 Exercisable at September 30, 2022 315,991 $ 3.37 7.77 | The table below represents the activity of stock options granted to employees and non-employees for the year ended December 31, 2021: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2020 266,250 $ 2.94 8.22 Granted 442,240 $ 4.00 Exercised — — Forfeited — — Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Exercisable at December 31, 2021 205,888 $ 2.94 7.80 Vested and expected to vest at December 31, 2021 708,490 $ 3.60 8.64 |
Schedule of Valuation Assumptions | The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Nine Months Ended September 30, 2022 2021 Volatility 90.39 % 83.50 % Expected term in years 5.98 5.90 Dividend rate 0.00 % 0.00 % Risk-free interest rate 2.00 % 0.99 % Fair value of option on grant date $ 3.86 $ 3.87 | The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Year Ended December 31, 2021 2020 Volatility 83.78 % 85.00 % Expected term in years 5.85 5.80 Dividend rate 0.00 % 0.00 % Risk-free interest rate 1.01 % 0.64 % Fair value of common stock on grant date $ 4.00 $ 4.72 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Federal Statutory Income Tax Rate to the Effective Income tax Rate | A reconciliation of income tax expense (benefit) at the US federal statutory income tax rate and the income tax provision in the financial statements is as follows: December 31, 2021 2020 Expected income tax benefit at the federal statutory rate 21.0 % 21.0 % State and local taxes, net of federal benefit 10.6 12.8 Non-deductible items and other (0.5) — Prior year provision to return adjustments — 6.4 Change in valuation allowance (31.1) (40.2) Total — % — % |
Schedule of Deferred Tax Assets | The principal components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2021 2020 Deferred tax assets: Federal and state net operating loss carryforwards $ 6,617 $ 3,939 Share based compensation 308 97 Lease liabilities 57 96 Accruals and other 98 108 Gross deferred tax assets 7,080 4,240 Less: deferred tax liabilities (70) (94) Less: valuation allowance (7,010) (4,146) Net deferred tax assets $ — $ — |
MARKETABLE SECURITIES AND FAI_4
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Summary of Available for Sale Securities | The following is a summary of the Company’s available for sale securities as of the dates indicated: As of September 30, 2022 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 150 $ — $ — $ 150 Municipal bonds 270 — (1) 269 Total $ 420 $ — $ (1) $ 419 As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 | The following is a summary of the Company’s available-for-sale securities as of the dates indicated: As of December 31, 2021 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate bonds $ 1,153 $ — $ (1) $ 1,152 Municipal bonds 2,657 — (1) 2,656 Total $ 3,810 $ — $ (2) $ 3,808 All of the Company’s investments in marketable debt securities are accounted for as available-for-sale securities and have contractual maturity dates of one year or less. |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2022: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets: Marketable securities, available-for-sale $ — $ 419 $ — Liabilities: Warrant liability $ — $ — $ 225 | |
Schedule of Activity for the Liability Measured at Estimated Fair Value Using Unobservable Inputs | The following table presents the changes is the fair value of the Level 3 liability: Warrant Fair value as of December 31, 2021 $ — Initial measurement on May 17, 2022 1,288 Warrant conversion (573) Change in valuation (490) Balance as of September 30, 2022 $ 225 | The following table presents the activity for the liability measured at estimated fair value using unobservable inputs for the year ended December 31, 2021: Beginning balance, January 1, 2021 $ — Additions during the year ended December 31, 2021 89 Transfer out of Level 3 89 Balance at December 31, 2021 $ — |
Fair Value Measurement Inputs and Valuation Techniques | The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: (Initial Measurement) May 17, September 30, 2022 Volatility 130.8 % 133.3 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 2.67 % 4.24 % Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.16 % | The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.155 % |
Summary of Estimated Fair Value of Investments Classified by Contractual Maturity Date | The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities: As of September 30, 2022 Due in 1 year $ 419 Due in 1-5 years — Due in 5-10 years — Due after 10 years — Total $ 419 |
ACCRUED EXPENSES (Tables)_2
ACCRUED EXPENSES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Schedule of Accrued Expenses | Accrued expenses consist of the following: September 30, 2022 December 31, 2021 Research and development $ 297 $ 894 General and administrative 106 183 Payroll and related 297 291 Licensing related — 62 Total accrued expenses $ 700 $ 1,430 | Accrued expenses consisted of: December 31, 2021 2020 Accrued expenses: Research and development $ 894 $ 259 General and administrative 183 156 Payroll and related 291 342 Licensing related 62 81 Other — 9 Total accrued expenses $ 1,430 $ 847 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Fair Value Measurement Inputs and Valuation Techniques | The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: (Initial Measurement) May 17, September 30, 2022 Volatility 130.8 % 133.3 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 2.67 % 4.24 % Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.16 % | The Black-Scholes option-pricing model was used to estimate the fair value of the warrants with the following weighted-average assumptions: Volatility 85.0 % Expected term in years 2.5 Dividend rate 0.0 % Risk-free interest rate 0.155 % |
Schedule of Warrants Outstanding To Purchase Common Stock | As of September 30, 2022, the Company had the following warrants outstanding to purchase common stock. Number of Shares Exercise Price per Share Expiration Date 112,500 $10.00 February 12, 2026 1,480,000 $0.9382 May 17, 2027 |
STOCK-BASED COMPENSATION (Tab_2
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Schedule of Stock-based Compensation Expense | The Company recorded stock-based compensation related to stock options and restricted stock units (RSUs) issued under the Company’s 2018 Equity Incentive Plan (2018 Plan) in the following expense categories of its accompanying statements of operations for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Research and development $ (97) $ 22 $ (208) $ 61 General and administrative (39) 112 168 379 Total $ (136) $ 134 $ (40) $ 440 | The Company recorded stock-based compensation related to stock options issued under the 2018 Plan in the following expense categories of its accompanying statements of operations for the years ended December 31, 2021 and 2020: For the Year Ended December 31, 2021 2020 Research and development $ 83 $ 103 General and administrative 543 51 Total $ 626 $ 154 |
Activity of Stock Options Granted | The table below represents the activity of stock options granted to employees and non-employees for the nine months ended September 30, 2022: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Granted 204,500 $ 5.22 Exercised — — Forfeited 216,406 4.06 Outstanding at September 30, 2022 696,584 $ 3.93 8.30 Exercisable at September 30, 2022 315,991 $ 3.37 7.77 | The table below represents the activity of stock options granted to employees and non-employees for the year ended December 31, 2021: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2020 266,250 $ 2.94 8.22 Granted 442,240 $ 4.00 Exercised — — Forfeited — — Outstanding at December 31, 2021 708,490 $ 3.60 8.64 Exercisable at December 31, 2021 205,888 $ 2.94 7.80 Vested and expected to vest at December 31, 2021 708,490 $ 3.60 8.64 |
Schedule of Valuation Assumptions | The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Nine Months Ended September 30, 2022 2021 Volatility 90.39 % 83.50 % Expected term in years 5.98 5.90 Dividend rate 0.00 % 0.00 % Risk-free interest rate 2.00 % 0.99 % Fair value of option on grant date $ 3.86 $ 3.87 | The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: For the Year Ended December 31, 2021 2020 Volatility 83.78 % 85.00 % Expected term in years 5.85 5.80 Dividend rate 0.00 % 0.00 % Risk-free interest rate 1.01 % 0.64 % Fair value of common stock on grant date $ 4.00 $ 4.72 |
Summary of Restricted Stock Unit Activity | The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2022: Shares Outstanding at December 31, 2021 — Granted 188,023 Vested and settled — Expired/forfeited/canceled — Outstanding at September 30, 2022 188,023 |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
May 17, 2022 | Feb. 12, 2021 | Jan. 11, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||||||||
Accumulated deficit | $ 27,343 | $ 21,902 | $ 12,599 | ||||||
Proceeds from convertible notes | $ 350 | $ 350 | 0 | $ 350 | 350 | $ 0 | |||
Net proceeds from sale of stock | $ 3,900 | ||||||||
Cash, cash equivalents, and marketable securities | $ 5,151 | $ 7,510 | |||||||
IPO | |||||||||
Class of Stock [Line Items] | |||||||||
Net proceeds from sale of stock | $ 15,500 | $ 15,500 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recapitalization and License Revenue (Details) | 12 Months Ended | ||
Feb. 12, 2021 | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Accounting Policies [Abstract] | |||
Reverse stock split | 0.025 | ||
Revenue recognized | $ 0 | $ 100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computers | |
Property, Plant and Equipment [Line Items] | |
Useful lives | three years |
Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | three years |
MARKETABLE SECURITIES AND FAI_5
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Summary of the Company’s Available for Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Investments [Line Items] | ||
Adjusted Cost | $ 420 | $ 3,810 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (2) |
Fair Value | 419 | 3,808 |
Corporate bonds | ||
Schedule of Investments [Line Items] | ||
Adjusted Cost | 150 | 1,153 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 150 | 1,152 |
Municipal bonds | ||
Schedule of Investments [Line Items] | ||
Adjusted Cost | 270 | 2,657 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (1) |
Fair Value | $ 269 | $ 2,656 |
MARKETABLE SECURITIES AND FAI_6
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Narrative (Details) - $ / shares | Mar. 31, 2021 | Feb. 12, 2021 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Conversion price (in usd per share) | $ 89,000 | $ 8 |
MARKETABLE SECURITIES AND FAI_7
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Liability Measured at Estimated Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance, beginning | $ 0 | |
Additions during the year ended December 31, 2021 | 1,288 | |
Balance, ending | 225 | $ 0 |
Embedded Derivative Liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance, beginning | $ 0 | 0 |
Additions during the year ended December 31, 2021 | 89 | |
Transfer out of Level 3 | 89 | |
Balance, ending | $ 0 |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||||
Non-current finance lease assets | $ 206 | $ 279 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets | ||
Finance Lease Liability [Abstract] | ||||
Current finance lease liabilities | $ 97 | $ 105 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities | ||
Non-current finance lease liabilities | $ 72 | $ 170 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities | ||
Total finance lease liabilities | $ 169 | $ 275 | ||
Weighted-average remaining lease term - finance lease | 1 year 9 months | |||
Weighted-average discount rate - finance lease | 13.50% | |||
Other Information | ||||
Operating cash flows from finance lease amortization | $ 206 | $ 55 | $ 73 | 74 |
Financing cash flows from finance lease payments | $ 15 | $ 83 | $ 106 | $ 65 |
LEASES - Maturity Schedule (Det
LEASES - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 114 | |
2023 | 76 | |
Total lease payments | 190 | |
Less: Imputed interest | 21 | |
Present value of lease liability | $ 169 | $ 275 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued expenses: | |||
Research and development | $ 297 | $ 894 | $ 259 |
General and administrative | 106 | 183 | 156 |
Payroll and related | 297 | 291 | 342 |
Licensing related | 0 | 62 | 81 |
Other | 0 | 9 | |
Accrued Liabilities, Current, Total | $ 700 | $ 1,430 | $ 847 |
PPP NOTE AND CONVERTIBLE NOTES
PPP NOTE AND CONVERTIBLE NOTES (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 11, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | May 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||||||
Forgiveness of PPP note | $ 61 | $ 0 | $ 61 | |||||
Proceeds from convertible notes | $ 350 | $ 350 | $ 0 | $ 350 | $ 350 | $ 0 | ||
Salmon Pharma, Affiliate of Medice and David Baker, CEO | Convertible Promissory Note Purchase Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note interest rate | 7% | 7% | ||||||
Proceeds from convertible notes | $ 350 | $ 350 | ||||||
Convertible notes, converted, shares issued (in shares) | 54,906 | 54,906 | ||||||
Paycheck Protection Program, CARES Act | ||||||||
Related Party Transaction [Line Items] | ||||||||
Debt instrument, face amount | $ 61 | |||||||
Note interest rate | 1% | |||||||
Note maturity | 2 years | |||||||
Note, payment period | 1 year 6 months |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Company contributions | $ 24 | $ 17 |
Maximum | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer matching contribution, percent of employees' gross pay (up to) | 3% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Litigation (Details) | Nov. 06, 2021 claim |
Rendon v. Vallon, Inc., et al | Settled Litigation | |
Loss Contingencies [Line Items] | |
Pending claim | 1 |
STOCKHOLDERS EQUITY (DEFICIT) -
STOCKHOLDERS EQUITY (DEFICIT) - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||
May 17, 2022 | Feb. 12, 2021 | Feb. 28, 2021 | |
Class of Stock [Line Items] | |||
Sale of stock (in shares) | 3,700,000 | ||
Sale of stock, price per share (in usd per share) | $ 1.0632 | ||
Net proceeds from sale of stock | $ 3,900 | ||
Additional offering expense | $ 905 | $ 905 | |
Warrants granted (in shares) | 3,700,000 | ||
Warrant exercise price (in usd per share) | $ 0.9382 | ||
IPO | |||
Class of Stock [Line Items] | |||
Sale of stock (in shares) | 2,250,000 | 2,250,000 | |
Sale of stock, price per share (in usd per share) | $ 8 | $ 8 | |
Net proceeds from sale of stock | $ 15,500 | $ 15,500 | |
Stock issuance costs, discounts and commissions | $ 1,600 | $ 1,600 | |
Underwriters' Allotment | |||
Class of Stock [Line Items] | |||
Warrants granted (in shares) | 112,500 | 112,500 | |
Warrant exercise price (in usd per share) | $ 10 | $ 10 | |
Warrants outstanding, term | 5 years |
STOCKHOLDERS EQUITY (DEFICIT)_2
STOCKHOLDERS EQUITY (DEFICIT) - Estimate of the Fair Value of the Warrants and Assumptions (Details) | Sep. 30, 2022 | May 17, 2022 | Dec. 31, 2021 |
Volatility | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 1.333 | 1.308 | 0.850 |
Expected term in years | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 2.5 | 2.5 | 2.5 |
Dividend rate | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0 | 0 | 0 |
Risk-free interest rate | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0.0424 | 0.0267 | 0.00155 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 01, 2018 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Automatic increase in shares authorized based on percent of total shares outstanding on December 31st of the preceding calendar year. | 4% | |
Outstanding, intrinsic value | $ 1,716 | |
Exercisable intrinsic value | 640 | |
Unrecognized compensation cost | $ 885 | |
Unrecognized compensation, weighted average amortization period | 2 years 5 months 26 days | |
2018 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized (in shares) | 621,022 | |
Stock awards, contractual life (up to) | 10 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Stock-based compensation | $ (136) | $ 134 | $ (40) | $ 440 | $ 626 | $ 154 |
Research and development | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Stock-based compensation | (97) | 22 | (208) | 61 | 83 | 103 |
General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Stock-based compensation | $ (39) | $ 112 | $ 168 | $ 379 | $ 543 | $ 51 |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity of Stock Options (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options | |||
Outstanding, Beginning Balance (in shares) | 708,490 | 266,250 | |
Granted (in shares) | 204,500 | 442,240 | |
Outstanding, Ending Balance (in shares) | 696,584 | 708,490 | 266,250 |
Exercisable, Ending Balance (in shares) | 315,991 | 205,888 | |
Vested and expected to vest (in shares) | 708,490 | ||
Weighted average exercise price | |||
Outstanding, Beginning Balance (in usd per share) | $ 3.60 | $ 2.94 | |
Granted (in usd per share) | 5.22 | 4 | |
Outstanding, Ending Balance (in usd per share) | 3.93 | 3.60 | $ 2.94 |
Exercisable, Ending Balance (in usd per share) | $ 3.37 | 2.94 | |
Vested and expected to vest (in usd per share) | $ 3.60 | ||
Weighted average remaining contractual term (years) | |||
Outstanding, Beginning Balance (years) | 8 years 3 months 18 days | 8 years 7 months 20 days | 8 years 2 months 19 days |
Outstanding, Ending Balance (years) | 8 years 3 months 18 days | 8 years 7 months 20 days | 8 years 2 months 19 days |
Exercisable, Balance Ending (years) | 7 years 9 months 7 days | 7 years 9 months 18 days | |
Vested and expected to vest (years) | 8 years 7 months 20 days |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions Used to Estimate Fair Value of Options (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | ||||
Volatility | 90.39% | 83.50% | 83.78% | 85% |
Expected term in years | 5 years 11 months 23 days | 5 years 10 months 24 days | 5 years 10 months 6 days | 5 years 9 months 18 days |
Dividend rate | 0% | 0% | 0% | 0% |
Risk-free interest rate | 2% | 0.99% | 1.01% | 0.64% |
Fair value of option on grant date (in dollars per share) | $ 3.86 | $ 3.87 | $ 4 | $ 4.72 |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of Federal Statutory Income Tax Rate to the Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Expected income tax benefit at the federal statutory rate | 21% | 21% |
State and local taxes, net of federal benefit | 10.60% | 12.80% |
Non-deductible items and other | (0.50%) | 0% |
Prior year provision to return adjustments | 0% | 6.40% |
Change in valuation allowance | (31.10%) | (40.20%) |
Total | 0% | 0% |
INCOME TAX- Components of Defer
INCOME TAX- Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Federal and state net operating loss carryforwards | $ 6,617 | $ 3,939 |
Share based compensation | 308 | 97 |
Lease liabilities | 57 | 96 |
Accruals and other | 98 | 108 |
Gross deferred tax assets | 7,080 | 4,240 |
Less: deferred tax liabilities | (70) | (94) |
Less: valuation allowance | (7,010) | (4,146) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAX - Narrative (Details
INCOME TAX - Narrative (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Income Tax Disclosure [Abstract] | |
Valuation allowance, increase | $ (2,864) |
Federal | |
Income Tax Contingency [Line Items] | |
Operating loss carryforwards | 20,125 |
State | |
Income Tax Contingency [Line Items] | |
Operating loss carryforwards | 20,362 |
Local | |
Income Tax Contingency [Line Items] | |
Operating loss carryforwards | $ 15,866 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 11, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Jan. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | $ 0 | $ 100,000 | ||||||
Proceeds from convertible notes | $ 350,000 | $ 350,000 | $ 0 | $ 350,000 | $ 350,000 | $ 0 | ||
Medice | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue recognized | $ 100,000 | |||||||
License agreement, term | 5 years | |||||||
Salmon Pharma, Affiliate of Medice and David Baker, CEO | Convertible Promissory Note Purchase Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Proceeds from convertible notes | $ 350,000 | $ 350,000 | ||||||
Note interest rate | 7% | 7% | ||||||
Convertible notes, converted, shares issued (in shares) | 54,906 | 54,906 |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) | Sep. 30, 2022 participant |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of subjects enrolled in the SEAL study | 55 |
Number of subjects that completed the SEAL study | 53 |
Number of subjects included in the final SEAL study analysis | 52 |
LIQUIDITY (Details)_2
LIQUIDITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
May 17, 2022 | Feb. 12, 2021 | Jan. 11, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||||||||
Retained earnings (accumulated deficit) | $ (27,343) | $ (21,902) | $ (12,599) | ||||||
Proceeds from convertible notes | $ 350 | $ 350 | $ 0 | $ 350 | $ 350 | $ 0 | |||
Net proceeds from sale of stock | $ 3,900 | ||||||||
Sale of stock (in shares) | 3,700,000 | ||||||||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Sale of stock, price per share (in usd per share) | $ 1.0632 | ||||||||
Stock issuance costs | $ 572 | ||||||||
Warrants issuance expense | $ 85 | ||||||||
Cash, cash equivalents, and marketable securities | $ 5,151 | $ 7,510 | |||||||
IPO | |||||||||
Class of Stock [Line Items] | |||||||||
Net proceeds from sale of stock | $ 15,500 | $ 15,500 | |||||||
Sale of stock (in shares) | 2,250,000 | 2,250,000 | |||||||
Sale of stock, price per share (in usd per share) | $ 8 | $ 8 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Feb. 12, 2021 |
Accounting Policies [Abstract] | |
Reverse stock split | 0.025 |
MARKETABLE SECURITIES AND FAI_8
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Summary of the Company’s Available for Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Investments [Line Items] | ||
Adjusted Cost | $ 420 | $ 3,810 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (2) |
Fair Value | 419 | 3,808 |
Corporate bonds | ||
Schedule of Investments [Line Items] | ||
Adjusted Cost | 150 | 1,153 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 150 | 1,152 |
Municipal bonds | ||
Schedule of Investments [Line Items] | ||
Adjusted Cost | 270 | 2,657 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (1) |
Fair Value | $ 269 | $ 2,656 |
MARKETABLE SECURITIES AND FAI_9
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | May 17, 2022 | Dec. 31, 2021 |
Assets: | |||
Marketable securities, available-for-sale | $ 419 | $ 3,808 | |
Liabilities: | |||
Warrant liability | 225 | $ 225 | $ 0 |
Quoted Prices in Active Markets (Level 1) | |||
Assets: | |||
Marketable securities, available-for-sale | 0 | ||
Liabilities: | |||
Warrant liability | 0 | ||
Significant Other Observable Inputs (Level 2) | |||
Assets: | |||
Marketable securities, available-for-sale | 419 | ||
Liabilities: | |||
Warrant liability | 0 | ||
Significant Other Unobservable Inputs (Level 3) | |||
Assets: | |||
Marketable securities, available-for-sale | 0 | ||
Liabilities: | |||
Warrant liability | $ 225 |
MARKETABLE SECURITIES AND FA_10
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||||
May 17, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 25, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Feb. 12, 2021 | |
Fair Value Disclosures [Abstract] | |||||||
Sale of stock (in shares) | 3,700,000 | ||||||
Sale of stock, price per share (in usd per share) | $ 1.0632 | ||||||
Warrants granted (in shares) | 3,700,000 | ||||||
Warrant exercise price (in usd per share) | $ 0.9382 | ||||||
Warrant liability | $ 225 | $ 225 | $ 0 | ||||
Number of warrants exercised to alternate cashless exercise | 2,220,000 | ||||||
Warrant conversion reversal | $ 573 | ||||||
Conversion price (in usd per share) | $ 89,000 | $ 8 | |||||
Expense recognized on embedded derivative | $ 89 |
MARKETABLE SECURITIES AND FA_11
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Liability Measured at Estimated Fair Value (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, beginning | $ 0 |
Additions during the year ended December 31, 2021 | 1,288 |
Warrant conversion | (573) |
Change in valuation | (490) |
Balance, ending | $ 225 |
MARKETABLE SECURITIES AND FA_12
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Derivative Liability Measurement Inputs (Details) | Sep. 30, 2022 | May 17, 2022 | Dec. 31, 2021 |
Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants outstanding, measurement input | 1.333 | 1.308 | 0.850 |
Expected term in years | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants outstanding, measurement input | 2.5 | 2.5 | 2.5 |
Dividend rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants outstanding, measurement input | 0 | 0 | 0 |
Risk-free interest rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants outstanding, measurement input | 0.0424 | 0.0267 | 0.00155 |
MARKETABLE SECURITIES AND FA_13
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Summary of Estimated Fair Value of Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year | $ 419 | |
Due in 1-5 years | 0 | |
Due in 5-10 years | 0 | |
Due after 10 years | 0 | |
Total | $ 419 | $ 3,808 |
ACCRUED EXPENSES (Details)_2
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | |||
Research and development | $ 297 | $ 894 | $ 259 |
General and administrative | 106 | 183 | 156 |
Payroll and related | 297 | 291 | 342 |
Licensing related | 0 | 62 | 81 |
Accrued Liabilities, Current, Total | $ 700 | $ 1,430 | $ 847 |
PPP NOTE AND CONVERTIBLE NOTE_3
PPP NOTE AND CONVERTIBLE NOTES (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 11, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | May 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||||||
Forgiveness of PPP note | $ 61 | $ 0 | $ 61 | |||||
Proceeds from convertible notes | $ 350 | $ 350 | $ 0 | $ 350 | $ 350 | $ 0 | ||
Salmon Pharma, Affiliate of Medice and David Baker, CEO | Convertible Promissory Note Purchase Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note interest rate | 7% | 7% | ||||||
Proceeds from convertible notes | $ 350 | $ 350 | ||||||
Convertible notes, converted, shares issued (in shares) | 54,906 | 54,906 | ||||||
Paycheck Protection Program, CARES Act | ||||||||
Related Party Transaction [Line Items] | ||||||||
Debt instrument, face amount | $ 61 | |||||||
Note interest rate | 1% | |||||||
Note maturity | 2 years | |||||||
Note, payment period | 1 year 6 months |
STOCKHOLDERS_ EQUITY (DEFICIT_2
STOCKHOLDERS’ EQUITY (DEFICIT) - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
May 17, 2022 | Feb. 12, 2021 | Feb. 28, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jul. 25, 2022 | |
Class of Stock [Line Items] | ||||||||||
Sale of stock (in shares) | 3,700,000 | |||||||||
Sale of stock, price per share (in usd per share) | $ 1.0632 | |||||||||
Additional offering expense | $ 905 | $ 905 | ||||||||
Net proceeds from sale of stock | $ 3,900 | |||||||||
Stock issuance costs | 572 | |||||||||
Warrants issuance expense | $ 85 | |||||||||
Warrants granted (in shares) | 3,700,000 | |||||||||
Warrant exercise price (in usd per share) | $ 0.9382 | |||||||||
Warrant issued reflected in additional paid-in capital | $ 399 | $ 399 | ||||||||
Number of warrants exercised to alternate cashless exercise | 2,220,000 | |||||||||
Warrant conversion | $ (573) | |||||||||
Loss on warrant conversion | $ 388 | $ 0 | 388 | $ 0 | ||||||
Warrant liability | $ 225 | $ 225 | $ 225 | $ 0 | ||||||
IPO | ||||||||||
Class of Stock [Line Items] | ||||||||||
Sale of stock (in shares) | 2,250,000 | 2,250,000 | ||||||||
Sale of stock, price per share (in usd per share) | $ 8 | $ 8 | ||||||||
Gross proceeds from stock offering | $ 18,000 | |||||||||
Stock issuance costs, discounts and commissions | $ 1,600 | 1,600 | ||||||||
Net proceeds from sale of stock | $ 15,500 | $ 15,500 | ||||||||
Underwriters' Allotment | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants granted (in shares) | 112,500 | 112,500 | ||||||||
Warrant exercise price (in usd per share) | $ 10 | $ 10 | ||||||||
Warrants outstanding, term | 5 years | |||||||||
Warrant issued reflected in additional paid-in capital | $ 399 |
STOCKHOLDERS_ EQUITY (DEFICIT_3
STOCKHOLDERS’ EQUITY (DEFICIT) - Estimate of the Fair Value of the Warrants and Assumptions (Details) | Sep. 30, 2022 | May 17, 2022 | Dec. 31, 2021 |
Volatility | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 1.333 | 1.308 | 0.850 |
Volatility | Warrants-IPO | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0.850 | ||
Expected term in years | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 2.5 | 2.5 | 2.5 |
Expected term in years | Warrants-IPO | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 2.5 | ||
Dividend rate | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0 | 0 | 0 |
Dividend rate | Warrants-IPO | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0 | ||
Risk-free interest rate | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0.0424 | 0.0267 | 0.00155 |
Risk-free interest rate | Warrants-IPO | |||
Class of Stock [Line Items] | |||
Warrants outstanding, measurement input | 0.0016 |
STOCKHOLDERS_ EQUITY (DEFICIT_4
STOCKHOLDERS’ EQUITY (DEFICIT) - Schedule of Warrants Outstanding to Purchase Common Stock (Details) - $ / shares | Sep. 30, 2022 | May 17, 2022 |
Class of Stock [Line Items] | ||
Exercise Price per Share (in dollars per share) | $ 0.9382 | |
Warrants Expiring In 2026 | ||
Class of Stock [Line Items] | ||
Number of Shares | 112,500 | |
Exercise Price per Share (in dollars per share) | $ 10 | |
Warrants Expiring In 2027 | ||
Class of Stock [Line Items] | ||
Number of Shares | 1,480,000 | |
Exercise Price per Share (in dollars per share) | $ 0.9382 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Stock-based compensation | $ (136) | $ 134 | $ (40) | $ 440 | $ 626 | $ 154 |
Research and development | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Stock-based compensation | (97) | 22 | (208) | 61 | 83 | 103 |
General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Stock-based compensation | $ (39) | $ 112 | $ 168 | $ 379 | $ 543 | $ 51 |
STOCK-BASED COMPENSATION - Na_2
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost | $ 885 | |||||
Unrecognized compensation, weighted average amortization period | 2 years 5 months 26 days | |||||
Stock-based compensation | $ (136) | $ 134 | $ (40) | $ 440 | $ 626 | $ 154 |
Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock awards, contractual life (up to) | 10 years | |||||
Unrecognized compensation cost | 839 | $ 839 | ||||
Unrecognized compensation, weighted average amortization period | 2 years 10 months 6 days | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 188,023 | |||||
Grant date fair value (in usd per share) | $ 0.5683 | |||||
Performance Based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost | 83 | $ 83 | ||||
Granted (in shares) | 150,000 | |||||
Time Based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost | $ 18 | $ 18 | ||||
Granted (in shares) | 38,023 | |||||
Stock-based compensation | $ 6 |
STOCK-BASED COMPENSATION - Ac_2
STOCK-BASED COMPENSATION - Activity of Stock Options (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options | |||
Outstanding, Beginning Balance (in shares) | 708,490 | 266,250 | |
Granted (in shares) | 204,500 | 442,240 | |
Forfeited (in shares) | 216,406 | ||
Outstanding, Ending Balance (in shares) | 696,584 | 708,490 | 266,250 |
Exercisable, Ending Balance (in shares) | 315,991 | 205,888 | |
Weighted average exercise price | |||
Outstanding, Beginning Balance (in usd per share) | $ 3.60 | $ 2.94 | |
Granted (in usd per share) | 5.22 | 4 | |
Forfeited (in usd per share) | 4.06 | ||
Outstanding, Ending Balance (in usd per share) | 3.93 | 3.60 | $ 2.94 |
Exercisable, Ending Balance (in usd per share) | $ 3.37 | $ 2.94 | |
Weighted average remaining contractual term (years) | |||
Outstanding, Beginning Balance (years) | 8 years 3 months 18 days | 8 years 7 months 20 days | 8 years 2 months 19 days |
Outstanding, Ending Balance (years) | 8 years 3 months 18 days | 8 years 7 months 20 days | 8 years 2 months 19 days |
Exercisable, Balance Ending (years) | 7 years 9 months 7 days | 7 years 9 months 18 days |
STOCK-BASED COMPENSATION - As_2
STOCK-BASED COMPENSATION - Assumptions Used to Estimate Fair Value of Options (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | ||||
Volatility | 90.39% | 83.50% | 83.78% | 85% |
Expected term in years | 5 years 11 months 23 days | 5 years 10 months 24 days | 5 years 10 months 6 days | 5 years 9 months 18 days |
Dividend rate | 0% | 0% | 0% | 0% |
Risk-free interest rate | 2% | 0.99% | 1.01% | 0.64% |
Fair value of option on grant date (in dollars per share) | $ 3.86 | $ 3.87 | $ 4 | $ 4.72 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2022 shares | |
Shares | |
Beginning balance, outstanding (in shares) | 0 |
Granted (in shares) | 188,023 |
Vested and settled (in shares) | 0 |
Expired/forfeited/canceled (in shares) | 0 |
Ending balance, outstanding (in shares) | 188,023 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jan. 11, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||||
Proceeds from convertible notes | $ 350 | $ 350 | $ 0 | $ 350 | $ 350 | $ 0 | |
Convertible Promissory Note Purchase Agreement | Salmon Pharma, Affiliate of Medice and David Baker, CEO | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from convertible notes | $ 350 | $ 350 | |||||
Note interest rate | 7% | 7% | |||||
Convertible notes, converted, shares issued (in shares) | 54,906 | 54,906 |