Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2023 | |
Document Information Line Items | |
Entity Registrant Name | PEAK BIO, INC. |
Document Type | POS AM |
Amendment Flag | false |
Entity Central Index Key | 0001834645 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 85-2448157 |
Entity Address, Address Line One | 4900 Hopyard Road |
Entity Address, City or Town | Pleasanton |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94588 |
City Area Code | 925 |
Local Phone Number | 463-4800 |
Business Contact [Member] | |
Document Information Line Items | |
Entity Address, Address Line One | 4900 Hopyard Road, Suite 100 |
Entity Address, City or Town | Pleasanton |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94588 |
City Area Code | 925 |
Local Phone Number | 463-4800 |
Contact Personnel Name | Stephen LaMond |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | |||
Cash and cash equivalents | $ 564,177 | $ 654,892 | $ 205,477 |
Derivative asset | 0 | 13,000 | 0 |
Prepaid expenses and other current assets | 1,797,719 | 2,562,901 | 253,669 |
Total current assets | 2,361,896 | 3,230,793 | 459,146 |
Property and equipment, net | 255,744 | 376,648 | 380,610 |
Restricted cash | 60,000 | 239,699 | 237,000 |
Operating lease right-of-use asset | 0 | 3,681,072 | 0 |
Noncurrent assets | 1,500 | 1,500 | 1,500 |
Total assets | 2,679,140 | 7,529,712 | 1,078,256 |
Current liabilities | |||
Accounts payable | 4,861,250 | 3,618,026 | 301,469 |
Accrued expenses | 2,198,568 | 2,038,291 | 990,485 |
Advance payable | 1,240,020 | 0 | |
Operating lease liability, current | 4,154,947 | 720,577 | 0 |
Insurance Financing Payable | 575,985 | 921,576 | 0 |
Derivative liability | 165,000 | 166,000 | 0 |
Convertible notes payable | 1,415,495 | 1,374,698 | 0 |
Related party loan | 2,211,953 | 1,961,953 | 1,500,000 |
Total current liabilities | 16,823,218 | 10,801,121 | 2,791,954 |
Operating lease liability, net of current portion | 0 | 3,507,268 | 0 |
Warrant liabilities | 0 | 525,000 | 0 |
Deferred tax liability | 0 | 35,000 | |
Other noncurrent liabilities | 230,650 | 790,800 | 186,570 |
Total liabilities | 17,053,868 | 15,624,189 | 3,013,524 |
Commitments and Contingencies | |||
Stockholders' deficit | |||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding | 0 | 0 | 0 |
Common stock | 2,019 | 1,978 | 1,716 |
Additional paid-in capital | 17,634,559 | 17,219,593 | 6,428,837 |
Accumulated deficit | (32,112,400) | (25,345,566) | (8,454,264) |
Accumulated other comprehensive income | 101,094 | 29,518 | 88,443 |
Total stockholders' deficit | (14,374,728) | (8,094,477) | (1,935,268) |
Total liabilities and stockholders' deficit | $ 2,679,140 | $ 7,529,712 | $ 1,078,256 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 23, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | May 31, 2022 | Mar. 01, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | |||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | ||||
Preferred Stock, Shares Outstanding | 0 | 0 | 0 | ||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.6 | $ 0.6 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 | 60,000,000 | ||||
Common Stock, Shares, Issued | 22,126,011 | 21,713,248 | 63,856 | 17,162,742 | |||
Common Stock, Shares, Outstanding | 20,195,510 | 19,782,747 | 8,283,613 | 17,162,742 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | ||||
Revenue | $ 13,854 | $ 52,950 | $ 607,681 | $ 528,309 |
Operating expenses | ||||
Research and development | 713,106 | 1,406,173 | 3,924,253 | 7,124,077 |
General and administrative | 3,004,823 | 972,826 | 8,531,276 | 2,469,762 |
Impairment loss on operating lease right of use asset | 3,513,999 | 0 | ||
Total operating expenses | 7,231,928 | 2,378,999 | 12,455,529 | 9,593,839 |
Loss from operations | (7,218,074) | (2,326,049) | (11,847,848) | (9,065,530) |
Other income | ||||
Interest income | 6 | 1,538 | 2,114 | 160 |
Interest expense | (61,386) | (4,005) | (47,958) | (11,471) |
Fair value adjustment to convertible notes payable | (1,186,800) | 0 | ||
Fair value adjustment to warrant liability | 525,000 | 0 | (75,000) | 0 |
Fair value adjustment to derivative | (12,000) | 0 | 92,110 | 0 |
Other (expense) income | (380) | 224,581 | 367,738 | 0 |
Gain (loss) on extinguishment of debt | (467,073) | 866,332 | ||
Total other income, net | 451,240 | 222,114 | (1,314,869) | 855,021 |
Total | (6,766,834) | (2,103,935) | (13,162,717) | (8,210,509) |
Income tax benefit (expense) | 0 | 3,500 | 74,000 | (82,067) |
Net (loss) income | (6,766,834) | (2,100,435) | (13,088,717) | (8,292,576) |
Other comprehensive loss: | ||||
Foreign currency translation | 71,576 | (25,540) | (58,925) | 521,713 |
Total comprehensive loss | $ (6,695,258) | $ (2,125,975) | $ (13,147,642) | $ (7,770,863) |
Weighted average number of shares outstanding, basic (in Shares) | 19,837,782 | 17,162,742 | 17,711,842 | 17,162,742 |
Basic and diluted net income (loss) per share (in Dollars per share) | $ (0.34) | $ (0.12) | $ (0.74) | $ (0.48) |
Weighted average number of shares outstanding, Diluted (in Shares) | 19,837,782 | 17,162,742 | 17,711,842 | 17,162,742 |
Basic and diluted net income (loss) per share (in Dollars per share) | $ (0.34) | $ (0.12) | $ (0.74) | $ (0.48) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Total | Previously Reported [Member] | Common Stock | Common Stock Revision of Prior Period, Adjustment [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] Revision of Prior Period, Adjustment [Member] | Accumulated Net Parent Investment In Peak Bio Previously Reported [Member] | Accumulated Net Parent Investment In Peak Bio Revision of Prior Period, Adjustment [Member] | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Previously Reported [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member] Revision of Prior Period, Adjustment [Member] |
Balance at Dec. 31, 2020 | $ (593,242) | $ (593,242) | $ 1,716 | $ 1,716 | $ 0 | $ 0 | $ (159,972) | $ 159,972 | $ (433,270) | $ (433,270) | $ (161,688) | $ (161,688) |
Balance (in Shares) at Dec. 31, 2020 | 17,162,742 | 17,162,742 | ||||||||||
Capital contribution from parent | 6,428,837 | 6,428,837 | ||||||||||
Issuance of Shares for Financing Fee | 0 | |||||||||||
Settlement of forward purchase agreement | 0 | |||||||||||
Foreign currency translation | 521,713 | 521,713 | ||||||||||
Net loss | (8,292,576) | (8,292,576) | ||||||||||
Balance at Dec. 31, 2021 | (1,935,268) | $ 1,716 | 6,428,837 | 88,443 | (8,454,264) | |||||||
Balance (in Shares) at Dec. 31, 2021 | 17,162,742 | |||||||||||
Capital contribution from parent | 1,363,974 | 1,363,974 | ||||||||||
Foreign currency translation | (25,540) | (25,540) | ||||||||||
Net loss | (2,100,435) | (2,100,435) | ||||||||||
Balance at Mar. 31, 2022 | (2,697,269) | $ 1,716 | 7,792,811 | 62,903 | (10,554,699) | |||||||
Balance (in Shares) at Mar. 31, 2022 | 17,162,742 | |||||||||||
Balance at Dec. 31, 2021 | (1,935,268) | $ 1,716 | 6,428,837 | 88,443 | (8,454,264) | |||||||
Balance (in Shares) at Dec. 31, 2021 | 17,162,742 | |||||||||||
Capital contribution from parent | 1,363,974 | 1,363,974 | ||||||||||
Issuance of common stock, shares | 132,302 | |||||||||||
Issuance of common stock | 1,152,163 | $ 13 | 1,152,150 | |||||||||
Shares acquired in reverse recapitalization net of transaction fees, shares | 2,234,363 | |||||||||||
Shares acquired in reverse recapitalization net of transaction fees | 128,161 | $ 224 | 127,937 | |||||||||
Issuance of shares to PIPE Subscribers | 4,025,000 | $ 40 | 4,024,960 | |||||||||
Issuance of shares to PIPE Subscribers, shares | 402,500 | |||||||||||
Issuance of Shares for Debt Settlement | 3,419,712 | $ 18 | 3,419,694 | |||||||||
Issuance of Shares for Debt Settlement, shares | 176,579 | |||||||||||
Issuance of Shares for Financing Fee | 250,000 | $ 5 | 249,995 | |||||||||
Issuance Of Shares For Financing Fee, shares | 50,200 | |||||||||||
Settlement of Forward Purchase Agreement, shares | (375,939) | |||||||||||
Settlement of forward purchase agreement | (3,802,623) | $ (38) | (3,802,585) | |||||||||
Share-based compensation | 452,046 | 452,046 | ||||||||||
Foreign currency translation | (58,925) | (58,925) | ||||||||||
Net loss | (13,088,717) | (13,088,717) | ||||||||||
Balance at Dec. 31, 2022 | (8,094,477) | $ 1,978 | 17,219,593 | 29,518 | (25,345,566) | |||||||
Balance (in Shares) at Dec. 31, 2022 | 19,782,747 | |||||||||||
Issuance of common stock, shares | 412,763 | |||||||||||
Issuance of common stock | 250,000 | $ 41 | 249,959 | |||||||||
Issuance of Shares for Financing Fee | 250,000 | |||||||||||
Share-based compensation | 165,007 | 165,007 | ||||||||||
Foreign currency translation | 71,576 | 71,576 | ||||||||||
Net loss | (6,766,834) | (6,766,834) | ||||||||||
Balance at Mar. 31, 2023 | $ (14,374,728) | $ 2,019 | $ 17,634,559 | $ 101,094 | $ (32,112,400) | |||||||
Balance (in Shares) at Mar. 31, 2023 | 20,195,510 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from Operating Activities: | ||||
Net loss | $ (6,766,834) | $ (2,100,435) | $ (13,088,717) | $ (8,292,576) |
Adjustment to reconcile net loss to net cash used in operating activities | ||||
Share-based compensation | 165,007 | 108,014 | 560,060 | 4,890 |
Depreciation | 41,409 | 41,109 | 151,873 | 176,649 |
Loss on disposal of equipment | 79,495 | |||
Impairment loss on operating lease right-of-use asset | 3,513,999 | 0 | ||
Change in fair value of warrant liability | (525,000) | 0 | 75,000 | 0 |
Change in fair value of derivative liability | (92,110) | 0 | ||
Issuance of shares for financing fee | 250,000 | 250,000 | 0 | |
Amortization of right-of-use lease asset | 167,073 | 153,028 | 634,611 | 0 |
Accretion of Convertible Notes Payable | 40,797 | 0 | ||
Loss (gain) on extinguishment of debt | 467,073 | (866,332) | ||
Change in fair value of convertible note payable | 1,186,800 | 0 | ||
Loss on disposal of fixed assets | 0 | 20,061 | ||
Change in fair value of derivative liability | 12,000 | 0 | ||
Changes in operating assets and liabilities | ||||
Prepaid expenses and other current assets | 764,112 | (96,553) | (698,741) | 30,506 |
Accounts payable | 1,237,995 | 182,875 | 816,037 | (427,327) |
Accrued expenses and other current liabilities | 212,920 | 580,369 | 1,771,097 | 210,028 |
Operating lease liability | (72,898) | 144,737 | (87,838) | 0 |
Other noncurrent liabilities | (560,150) | (178,876) | ||
Other noncurrent assets | 0 | 94,307 | ||
Other noncurrent liabilities and deferred tax liability | 569,230 | 185,570 | ||
Net cash used in operating activities | (1,440,075) | (1,165,732) | (7,485,625) | (8,864,224) |
Cash flows from investing activities | ||||
Purchase of property and equipment | (142,249) | (9,880) | ||
Net cash used in investing activities | (142,249) | (9,880) | ||
Cash flows from financing activities | ||||
Proceeds from advances payable | 1,240,020 | 0 | ||
Proceeds from net shareholder contributions | 0 | 1,250,578 | 1,250,298 | 6,392,626 |
Repayment of insurance financing payable | (345,591) | 0 | ||
Proceeds from related party loan | 250,000 | 0 | 523,640 | 1,500,000 |
Proceeds from issuance of common shares | 5,177,163 | 0 | ||
Proceeds from completion of business combination | 3,910,375 | 0 | ||
Settlement of forward purchase agreement | (3,802,623) | 0 | ||
Proceeds from long term convertible notes payable | 1,250,000 | 492,375 | ||
Repayment of related party loan | (173,640) | 0 | ||
Net cash provided by financing activities | 1,144,429 | 1,250,578 | 8,135,213 | 8,385,001 |
Net (decrease) increase in cash and cash equivalents | (295,646) | 84,846 | 507,339 | (489,103) |
Effect of exchange rate changes on cash and cash equivalents | 25,232 | (25,540) | (55,225) | 521,713 |
Cash, cash equivalents and restricted cash, beginning of year | 894,591 | 442,477 | 442,477 | 409,867 |
Cash, cash equivalents and restricted cash, end of year | 624,177 | 501,783 | 894,591 | 442,477 |
Components of cash, cash equivalents and restricted cash | ||||
Cash and cash equivalents | 564,177 | 264,783 | 654,892 | 205,477 |
Restricted cash | 60,000 | 237,000 | 239,699 | 237,000 |
Total cash, cash equivalents and restricted cash | 624,177 | 501,783 | 894,591 | 442,477 |
Supplemental disclosures of non-cash financing activities: | ||||
Cash paid for interest | 0 | 0 | ||
Cash paid for taxes | 8,844 | 8,566 | ||
Non-cash investing and financing activities: | ||||
Operating lease liabilities arising from obtaining right-of-use assets | $ 0 | $ 4,189,492 | 4,189,492 | 0 |
Purchase of property and equipment included in accounts payable | 33,060 | 0 | ||
Warrant liability assumed in Business Combination | 450,000 | 0 | ||
Related party loan assumed in Business Combination | 211,953 | 0 | ||
Convertible notes payable and derivative liability assumed in Business Combination | 1,512,500 | 0 | ||
Related party loan entered into for settlement of accrued expenses | 400,000 | 0 | ||
Shares issued for settlement of related party loan and accrued interest | 502,740 | 0 | ||
Shares issued for settlement of convertible notes payable and accrued interest | 1,263,099 | 0 | ||
Financing received for annual insurance policy | $ 921,576 | $ 0 |
Description of the Business
Description of the Business | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Description of the Business | 1. Description of the Business Peak Bio, Inc., together with its consolidated subsidiaries (the “Company”), is a clinical-stage biotechnology company focused on discovering, developing and delivering innovative therapies for multiple therapeutic areas. The Company has established a portfolio of potential therapies for the aging population. The Company’s pipeline includes the PHP-303 Alpha-1 COVID-19. PH-1 The accompanying condensed consolidated financial statements and notes have been prepared to include certain assets and liabilities of pH Pharma Co., Ltd (now Peak Bio Co., Ltd. or “Peak Bio”) (sometimes referred to as “pH Pharma Ltd” prior to the Spin-Off Spin-Off PHP- PH-1 The Spin-Off PHP-303 PH-1 PHP-303 PH-1 As of March 31, 2023, the Company’s wholly owned subsidiary was Peak Bio Co., Ltd., organized under the laws of the Republic of Korea, and its subsidiary Peak Bio CA, Inc., organized under the laws of California. Business Combination On November 1, 2022 (the “Closing Date”), the Company completed the transactions contemplated by that certain business combination agreement, dated as of April 28, 2022 (the “Business Combination Agreement”), by and among Ignyte Acquisition Corp. (“Ignyte”), Ignyte Korea Co., Ltd., a corporation organized under the laws of the Republic of Korea (“Korean Sub”), and Peak Bio Co., Ltd. At the closing of the transactions, (i) the stockholders of Peak Bio Co., Ltd. transferred their respective shares of common stock to Korean Sub in exchange for shares of Ignyte common stock held by Korean Sub, and (ii) in the course of such share swap, Korean Sub distributed the shares of Peak Bio Co., Ltd. common stock to Ignyte in consideration of Ignyte common stock (which was in-turn Risks and Uncertainties The Company relies, and expects to continue to rely, on a small number of vendors to provide services, supplies and materials related to its research and development programs. These research and development programs could be adversely affected by a significant interruption in these services or the availability of materials. Going Concern Since inception, the Company has incurred significant net losses. The Company incurred net losses of $6.8 million and $2.1 million for the three months ended March 31, 2023 and 2022, respectively, and $ million and $ million for the years ended December 31, 2022 and 2021, respectively. The Company had not initially been capitalized with sufficient funding to conduct its operations. Since the Company had no available cash or credit facilities, the Company was dependent upon Peak Bio Co., Ltd. (formerly pH Pharma Ltd) and its affiliates to provide services and funding to support the operations of the Company through the closing of the Business Combination. The Company expects to incur significant expenses and operating losses for the foreseeable future as it continues its efforts to identify product candidates and seek regulatory approvals within its portfolio. The Company will need additional financing to fund its ongoing activities. The Company may raise this additional funding through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions and funding under government contracts. The Company may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, the Company could be forced to delay, reduce or eliminate certain of the Company’s research and development programs. There can be no assurances that other sources of financing would be available. Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or classification of liabilities that might result from the outcome of the uncertainties discussed above. The Company’s future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing as discussed above; (ii) the success of its research and development programs; (iii) the development of competitive therapies by other biotechnology and pharmaceutical companies; (iv) the Company’s ability to manage growth of the organization; (v) the Company’s ability to protect its proprietary technology; and ultimately (vi) regulatory approval and market acceptance of the Company’s product candidates. | 1. Description of the Business The accompanying consolidated financial statements and notes have been prepared to include certain assets and liabilities of pH Pharma Co., Ltd (now Peak Bio Co., Ltd. or “Peak Bio”) (sometimes referred to as “ pH Pharma Ltd Spin-Off Summary of Significant Accounting Policies Spin-Off PHP- PH-1 The Spin-Off PHP-303 PH-1 PHP-303 PH-1 Peak Bio is a clinical-stage biotechnology company focused on discovering, developing and delivering innovative therapies for multiple therapeutic areas. The Company has established a portfolio of potential therapies for the aging population. The Company’s pipeline includes the PHP-303 Alpha-1 COVID-19. PH-1 Ignyte Acquisition Corp (Ignyte) On November 1, 2022 (the “Closing Date”), the Company completed the transactions contemplated by the certain business combination agreement, dated as of April 28, 2022 (the “Business Combination Agreement”), by and among Ignyte, Ignyte Korea Co., Ltd., a corporation organized under the laws of the Republic of Korea (“Korean Sub”), and Peak Bio Co., Ltd. At the closing of the transactions, (i) the stockholders of Peak Bio transferred their respective shares of Peak Bio Common Stock to Korean Sub in exchange for shares of Ignyte Common Stock held by Korean Sub, and (ii) in the course of such share swap, Korean Sub distributed the shares of Peak Bio Common Stock to Ignyte in consideration of Ignyte Common Stock (which was in-turn Pursuant to the Business Combination, the aggregate consideration payable to stockholders of Peak Bio at the closing date consisted of 17,295,044 shares of new Peak Bio common stock, par value $0.0001 per share. Each option of Peak Bio that was outstanding and unexercised immediately prior to the Business Combination (whether vested or unvested) was assumed by Ignyte and converted into an option to acquire an adjusted number of shares of common stock at an adjusted exercise price per share, in each case, pursuant to the terms of the Business Combination. Pursuant to the treatment of the Business Combination as a reverse recapitalization, Peak Bio assumed the liability position as it existed as of the closing date of the Business Combination. The net assets of the acquired entity were adjusted to include a derivative liability for the embedded put option (see Note 6). In connection with the Business Combination, an amount of $4,551,750 was transferred into escrow, pending final settlement of the forward share purchase agreement in December 2022. In December 2022, the Company purchased 375,939 shares of its Common Stock at a price of $10.115 per share following the exercise of the investor’s right to sell up to 450,000 shares of Common Stock under the forward purchase agreement. Those 375,939 shares of common stock have been retired. As a result of that exercise, funds in the amount of $ being held in escrow in connection with the forward purchase agreement were distributed as follows: $ to the Company and $ to the investor. The shares and net loss per share prior to the reverse recapitalization have been retroactively restated to reflect the exchange ratio of 2.0719. The consolidated financial statements reflect the historical operations of Peak Bio. The following table details the number of shares of common stock issued immediately following the consummation of the Business Combination: Shares Common stock redeemable and outstanding prior to business combination 5,750,000 Less: redemption of Ignyte shares (5,159,287 ) Common stock of Ignyte 590,713 Ignyte founder shares 1,537,500 Shares issued for services and debt settlement 106,150 Total Ignyte shares 2,234,363 Peak Bio shareholders 17,295,044 Total shares of common stock immediately after business combination 19,529,407 The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows for the year ended December 31, 2022: Recapitalization Cash — Ignyte trust and cash, net of redemptions and PIPE proceeds $ 13,766 Plus: restricted cash — Forward Share Purchase Agreement 4,551,750 Less: cash transaction costs allocated to the Company’s equity (655,141 ) Total $ 3,910,375 The following table reconciles the elements of the Business Combination to the consolidated statement of changes in stockholders’ equity (deficit) for the year ended December 31, 2022: Recapitalization Cash — Ignyte trust and cash, net of redemptions and PIPE proceeds $ 13,766 Plus: restricted cash — Forward Share Purchase Agreement 4,551,750 Less: fair value of private warrants (450,000 ) Less: derivative liability on Forward Share Purchase Agreement (80,110 ) Less: transaction costs allocated to the Company’s equity (3,907,245 ) Total $ 128,161 The following table details the allocated assets acquired and liabilities assumed as follows: Assets Acquired Cash — Ignyte trust and cash, net of redemptions $ 3,538,766 Plus: restricted cash — Forward Share Purchase Agreement 4,551,750 Other assets 692,487 Assets acquired 8,783,003 Liabilities Assumed Fair value of private warrants 450,000 Derivative liability on Forward Share Purchase Agreement 80,110 Other liabilities and accrued expenses 3,944,592 Liabilities assumed 4,474,702 Net assets acquired $ 4,308,301 On the Closing Date, a purchaser (the “Original Subscriber”) purchased from the Company an aggregate of 50,000 shares of Ignyte Common Stock (the “Original PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $500,000, pursuant to a subscription agreement entered into effective as of April 28, 2020 (the “Original Subscription Agreement”). On the Closing Date, a number of additional purchasers (each, a “New Subscriber”) purchased from the Company an aggregate of (i) 302,500 shares of Ignyte Common Stock (the “New PIPE Shares”) and (ii) 281,325 warrants (the “PIPE Financing Warrants”) to purchase shares of Ignyte Common Stock, at an exercise price of $0.01 per share, for a purchase price of $10.00 per share and an aggregate purchase price of $3,025,000, pursuant to separate subscription agreements entered into effective as of October 31, 2022 (each a “New Subscription Agreement”). The PIPE Financing Warrants are on terms substantially the same as the outstanding warrants that were included in the units issued in Ignyte’s initial public offering, except that the new warrants are not redeemable, and the warrants shall be exercisable for one year. On the Closing Date, a number of Peak Bio’s lenders (each, a “Bridge Loan PIPE Subscriber” and together with the Original Subscriber and the New Subscribers, the “Subscribers”) purchased from the Company an aggregate of (i) 176,579 shares of Ignyte Common Stock (the “Bridge Loan PIPE Shares” and together with the Original PIPE Shares and the New PIPE Shares, the “PIPE Shares”) and (ii) 164,218 warrants (the “Bridge Loan PIPE Financing Warrants” and together with the PIPE Financing Warrants, the “PIPE Warrants”) to purchase shares of Ignyte Common Stock, at an exercise price of $0.01 per share, in consideration for their agreement to cancel an aggregate principal amount of $1,750,000 and the interest accrued thereon in promissory notes evidencing the loans such lenders had extended to Peak Bio between July and September 2022, pursuant to separate subscription agreements entered into effective as of October 31, 2022 (each a “Bridge Loan PIPE Subscription Agreement” and together with the Original Subscription Agreement and the New Subscription Agreements, the “Subscription Agreements”). The Bridge Loan PIPE Financing Warrants are on terms substantially the same as the outstanding warrants that were included in the units issued in Ignyte’s initial public offering, except that the new warrants are not redeemable, and the warrants shall be exercisable for one year. Pursuant to the Subscription Agreements, the Company gave certain registration rights to the Subscribers with respect to the PIPE Shares and the PIPE Financing Warrants. The sale of the PIPE Shares and PIPE Financing Warrants was consummated concurrently with the Closing. Upon the Closing, Ignyte as the registrant changed its name to “Peak Bio, Inc.” Risks and Uncertainties The Company relies, and expects to continue to rely, on a small number of vendors to provide services, supplies and materials related to its research and development programs. These research and development programs could be adversely affected by a significant interruption in these services or the availability of materials. Going Concern Since inception, the Company has incurred significant net losses. The Company incurred net losses of $13.1 million and $8.3 million for the years ended December 31, 2022 and 2021, respectively. The Company has not been capitalized with sufficient funding to conduct its operations. Since the Company had no available cash or credit facilities, the Company was dependent upon pH Pharma Ltd and its affiliates to provide services and funding to support the operations of the Company through the closing of the Business Combination. The Company expects to incur significant expenses and operating losses for the foreseeable future as it continues its efforts to identify product candidates and seek regulatory approvals within its portfolio. The Company will need additional financing to fund its ongoing activities. The Company may raise this additional funding through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions and funding under government contracts. The Company may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, the Company could be forced to delay, reduce or eliminate certain of the Company’s research and development programs. There can be no assurances that other sources of financing would be available. Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or classification of liabilities that might result from the outcome of the uncertainties discussed above. The Company’s future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing as discussed above; (ii) the success of its research and development programs; (iii) the development of competitive therapies by other biotechnology and pharmaceutical companies; (iv) the Company’s ability to manage growth of the organization; (v) the Company’s ability to protect its proprietary technology; and ultimately (vi) regulatory approval and market acceptance of the Company’s product candidates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies For the three months ended March 31, 2023, there have been no changes to the significant accounting policies as disclosed in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K Unaudited Financial Information The Company’s unaudited condensed consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. In the Company’s opinion, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2022. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“ U.S. GAAP Basis of Presentation Prior to April 1, 2022 These consolidated financial statements were extracted from the accounting records of pH Pharma Ltd. on a carve-out carve-out PHP-303 PH-1 Basis of Presentation After April 1, 2022 The Spin-Off PHP-303 PH-1 PHP-303 PH-1 PHP-303 PH-1 Spin-Off As of April 1, 2022, as a result of the Spin-Off, carve-out Basis of Presentation After Consummation of Business Combination Agreement The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, Ignyte is treated as the “acquired” company and Peak Bio Co., Ltd. is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Peak Bio issuing stock for the net assets of Ignyte, accompanied by a recapitalization. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Peak Bio. At the closing date, and subject to the terms and conditions of the Business Combination Agreement, each share of Peak Bio’s common stock, par value $0.0001 per share, was converted into Common Stock equal to 2.0719 (the “Exchange Ratio”). The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the Exchange Ratio established in the Business Combination. Use of Estimates The preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. Itis at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Actual results could differ from those estimates. Net Loss Per Share The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per common share after giving consideration to all potentially dilutive common shares, including options to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential common shares have been anti-dilutive and basic and diluted loss per share have been the same. The following table sets forth the potentially dilutive securities that have been excluded from the March 31, December 31 Stock options to purchase common stock 1,750,967 1,750,967 Warrants to purchase common stock 5,867,045 5,867,045 Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, 2016-13”). 2016-13 2016-13 2019-04, 2016-13. No. 2016-13 In August 2020, the FASB issued ASU 2020-06, 470-20) 815-40): 2020-06”), 2020-06 2020-06 2020-06 Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“ U.S. GAAP Basis of Presentation Prior to April 1, 2022 These consolidated financial statements were extracted from the accounting records of pH Pharma Ltd. on a carve-out The accompanying carve-out PHP-303 PH-1 carve-out • Cash provided by pH Pharma Ltd to fund operations. pH Pharma Ltd uses a centralized approach to cash management and financing of its operations. Accordingly, only the cash, cash equivalents and restricted cash residing in pH Pharma, Inc., a 100% owned U.S. subsidiary of pH Pharma Ltd, has been reflected in these carve-out • Other assets and liabilities at pH Pharma Ltd which are not directly related to, or are not specifically owned by, or are not commitments, of the Company, including fixed assets and leases shared by the Company with other businesses of pH Pharma Ltd. • Most of the pH Pharma Ltd’ third-party debt and the related interest expense have not been allocated to these carve-out carve-out PPP Debt The majority of the Company’s operating expenses related to research and development (“R&D”). R&D expenses directly related to the Company were entirely attributed to the Company in the accompanying carve-out PHP-303 PH-1 PHP-303 PH-1 non-R&D The Company believes the assumptions and allocations underlying the carve-out Basis of Presentation After April 1, 2022 The Spin-Off PHP-303 PH-1 PHP-303 PH-1 PHP-303 PH-1 Spin-Off As of April , , as a result of the Spin-Off, the Company concluded that all the assets and liabilities of the newly created Peak Bio legal entity were contributed by the parent company pH Pharma Ltd. No other assets or liabilities were considered to be attributable to Peak Bio or that would be transferred to Peak Bio upon the completion of the Business Combination, eliminating the necessity to allocate a portion of pH Pharma Ltd.’s assets and liabilities to Peak Bio on a carve-out basis. Therefore, there was no longer a need to allocate assets and liabilities, as well as expenses, from the parent company for the consolidated financial statements. The accompanying financial statements have been prepared in conformity with U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP, as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. The Company’s consolidated financial statements for the year ended December 31, 2022 include the accounts of Peak Bio Co., Ltd. and its subsidiary, Peak Bio CA., Inc. All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation After Consummation of Business Combination Agreement The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, Ignyte is treated as the “acquired” company and Peak Bio is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Peak Bio issuing stock for the net assets of Ignyte, accompanied by a recapitalization. The net assets of Ignyte are stated at historical cost, with no goodwill or other intangible assets recorded. Peak Bio was determined to be the accounting acquirer based on the following predominant factors: • Peak Bio’s shareholders have the largest portion of voting rights in the Company; • the Board and Management are primarily composed of individuals associated with Peak Bio; • the operations of Peak Bio comprise the ongoing operations of the Company. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Peak Bio. At the closing date, and subject to the terms and conditions of the Business Combination Agreement, each share of Peak Bio’s common stock, par value $0.0001 per share, was converted into Common Stock equal to 2.0719 (the “Exchange Ratio”). The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the Exchange Ratio established in the Business Combination. Segment Information The Company currently operates in one business segment focused on the discovery and development of innovative therapies for multiple therapeutic areas. The Company is not organized by market and is managed and operated as one business. The Company does not operate any separate lines of business or separate business entities with respect to its programs. Accordingly, the Company does not accumulate discrete financial information with respect to separate service lines, and thus there is one reporting unit. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions, are used for, but not limited to, include stock-based compensation, derivative instruments, hybrid instruments, warrants, the valuation of pH Pharma Ltd common stock and the allocation of certain pH Pharma Ltd expenses in the consolidated financial statements. Additionally, the Company assessed the impact the COVID-19 COVID-19 COVID-19. COVID-19. COVID-19. Fair Value Measurements The Company records certain liability balances under the fair value measurements as defined by the Financial Accounting Standards Board (“ FASB Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at measurement date. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Cash and cash equivalents Cash equivalents include short-term, highly liquid instruments, consisting of money market accounts in the U.S. Restricted Cash The Company has a lease agreement for the premises it occupies in Palo Alto, California. A secured letter of credit in lieu of a lease deposit totaling $177,000 is secured by restricted cash in the same amount at December 31, 2022 and 2021. The secured letter of credit will remain in place for the life of the related lease, expiring in March 2027 (see Note 8, Commitments and Contingencies Currency and currency translation The consolidated financial statements are presented in U.S. dollars, the Company’s reporting currency. The functional currency of Peak Bio CA, Inc. is the U.S. dollar. The functional currency of Peak Bio Co., Ltd is the Korean Won. Adjustments that arise from exchange rate changes on transactions of each group entity denominated in a currency other than the functional currency are included in other income and expense in the consolidated statements of operations. Assets and liabilities of Peak Bio Co., Ltd are recorded in their Korean Won functional currency and translated into the U.S. dollar reporting currency of the Company at the exchange rate on the balance sheet date. Revenue, when recorded, and expenses of Peak Bio Co., Ltd are recorded in their Korean Won functional currency and translated into the U.S. dollar reporting currency of the Company at the average exchange rate prevailing during the reporting period. Resulting translation adjustments are recorded to other comprehensive income (loss). Concentration of credit risk The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts in the U.S., the balances of which, at times, may exceed federally insured limits. The Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. Exposure to credit risk is reduced by placing such deposits in high credit quality federally insured financial institutions. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the years ended December 31, 2022 and 2021. The Company received all of its total revenue through a grant from a government organization during the years ended December 31, 2022 and 2021. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated over the estimated useful lives of the respective assets, which range from two to five years, or the lesser of the related initial term of the lease or useful life for leasehold improvements. The initial cost of property and equipment consists of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the assets have been put into operation, such as repairs and maintenance, are charged to expense in the period in which the costs are incurred. Major replacements, improvements, and additions are capitalized in accordance with Company policy. Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value would be assessed using discounted cash flows or other appropriate measures of fair value. The Company did not recognize any impairment losses for the years ended December 31, 2022 and 2021. Derivative Instruments ASC 815, Derivatives and Hedging Activities (“ASC 815”) requires companies to bifurcate certain conversion options and redemption features from their host instruments and account for them as free-standing derivative financial instruments should certain criteria be met. The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates all of its financial instruments, including notes payable and other derivative liabilities, to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s consolidated balance sheet. Hybrid Instruments The Company also follows ASC 480-10, 480-10”) Warrants The Company accounts for the Public Warrants and Private Warrants (as defined in Note 11) collectively (“Warrants”), as either equity or liability-classified instruments based on an assessment of the specific terms of the Warrants and the applicable authoritative guidance in FASB Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the Warrants meet all of the requirements for equity classification under ASC 815, including whether the Warrants are indexed to the Company’s own common stocks and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period end date while the Warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, such warrants are required to be recorded as a component of additional paid-in non-cash The Company accounts for the Private Warrants in accordance with ASC 815-40 The Company evaluated the Public Warrants in accordance with ASC 815-40, paid-in Revenue recognition The Company’s revenue is primarily generated through grants from government organizations. The Company recognizes revenue from these contracts during the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grant are met. The Company concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs related to personnel, including salaries and other personnel related expenses, contract manufacturing and supply, consulting fees, and the cost of facilities and support services used in drug development. Assets acquired that are used for research and development and have no future alternative use are expensed as in-process General and Administrative Costs General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, business development, legal, human resources and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance. Share-based Compensation The Company accounts for stock options granted in accordance with ASC 718, Compensation-Stock Compensation, or ASC 718. In accordance with ASC 718, compensation expense is measured at the estimated fair value of the stock options at grant date and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award. Stock-based compensation expense represents the cost of the grant date fair value of employee stock awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur. Equity-based compensation expense is classified in the statement of operations in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified. Prior to the Business Combination, there had been no public market of the Company’s common stock. Therefore, the grant date fair value of the Company’s common stock was determined by the Company’s board of directors with the assistance of management and a third-party valuation specialist (see “Common stock valuations”). Subsequent to the Business Combination, the Company now determines the fair value of common stock based on the closing market price on the date of grant. Determination of the Fair Value of Convertible Notes The Company has elected the fair value option in accordance with ASC 825, Financial Instruments, for the accounting for the convertible promissory notes issued in 2022. Fair value adjustments to the convertible notes are included in other income (expenses) in the consolidated statements of operations and comprehensive loss. • The fair value of the initial closing of our convertible promissory notes in 2022 was determined to be equal to the proceeds of $1.25 million on issuance. • The fair value of the convertible promissory notes as of October 31, 2022, just prior to closing the Business Combination Agreement, was determined based on the transaction price of $10.00 per share. Net Loss Per Share As a result of the Spin-Off, Spin-Off. The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per common share after giving consideration to all potentially dilutive common shares, including options to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): December 31, 2022 2021 Stock options to purchase common stock 1,750,967 657,000 Income Taxes Deferred income taxes reflect future tax effects of temporary differences between the tax and financial reporting basis of the Company’s assets and liabilities measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will affect taxable income. When necessary, deferred tax assets are reduced by a valuation allowance, to reflect realizable value, and all deferred tax balances are reported as long-term on the balance sheet. Accruals are maintained for uncertain tax positions, as necessary. The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The Corporation has elected to treat interest and penalties related to income taxes, to the extent they arise, as a component of income taxes. ASC 740 prescribes the accounting for uncertainty in income taxes recognized in the financial statements. The Company regularly assesses the outcome of potential examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit which is more likely than not to be realized upon ultimate settlement. As of December 31, 2022 and 2021, the Company had no uncertain tax positions. Common stock valuations Prior to the Business Combination, the Company is required to periodically estimate the fair value of pH Pharma Ltd.’s common stock with the assistance of an independent third-party valuation firm when issuing stock options and computing the estimated stock-based compensation expense. The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of significant levels of management judgment. In order to determine the fair value of pH Pharma Ltd.’s common stock, the Company considered, among other items, previous transactions involving the sale of pH Pharma Ltd.’s securities, the pH Pharma Ltd.’s business, financial condition and results of operations, economic and industry trends, the market performance of comparable publicly traded companies, and the lack of marketability of pH Pharma Ltd.’s common stock. Valuations are updated when facts and circumstances indicate that the most recent valuation is no longer valid, such as changes in the stage of development efforts, various exit strategies and their timing, and other scientific developments that could be related to the Company’s valuation, or, at a minimum, annually. Third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Recently Adopted Accounting Standards Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, right-of-use right-of-use The Company has adopted the standard effective January 1, 2022 and has chosen to use the effective date as our date of initial application. Prior to January 1, 2022, the Company accounted for leases under ASC 840, “Accounting for Leases”. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods prior to January 1, 2022. The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the ‘package of practical expedients’ which allow us to not reassess (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply (i) the practical expedient which allows us to not separate lease and non-lease At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right-of-use utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As of the ASC 842 effective date, the Company’s incremental borrowing rate is approximately 10.0% based on the remaining lease term of the applicable leases. The Company has elected to combine lease and non-lease non-current. Income Taxes In December 2019, the FASB issued ASU 2019-12, 2019-12”). 2019-12 No. 2019-12 Grant Revenue In November 2021, the FASB issued ASU 2021-10, 2021-10 Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, 2016-13”). 2016-13 2016-13 2019-04, 2016-13. In August 2020, the FASB issued ASU 2020-06, 470-20) 815-40): 2020-06”), 2020-06 2020-06 December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the potential impact of adopting ASU 2020-06 on its financial statements and financial statement disclosures. |
Property and Equipment
Property and Equipment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | 3. Property and Equipment Property and equipment consist of the following: March 31, December 31 Lab equipment $ 682,209 $ 682,209 Leasehold improvements 41,578 41,578 Computer and office equipment 25,380 120,774 Computer software 3,725 3,725 Gross property and equipment $ 752,892 $ 848,286 Less: accumulated depreciation (497,148 ) (471,638 ) Net property and equipment $ 255,744 $ 376,648 Depreciation expense was $41,409 and $41,109 for the three months ended March 31, 2023 and 2022, respectively. | 3. Property and Equipment Property and equipment consist of the following: December 31, 2022 2021 Lab equipment $ 682,209 $ 682,209 Leasehold improvements 41,578 8,519 Computer and office equipment 120,774 11,584 Computer software 3,725 3,725 Gross property and equipment $ 848,286 $ 706,037 Less: accumulated depreciation (471,638 ) (325,427 ) Net property and equipment $ 376,648 $ 380,610 Depreciation expense, including an allocation of depreciation expense from pH Pharma Ltd, was $151,873 and $176,649 for the years ended December 31, 2022 and 2021, respectively. |
Accrued Expenses
Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | ||
Accrued Expenses | 4. Accrued Expenses Accrued expenses consist of the following: March 31, December 31 Professional fees $ — $ 608,846 Employee compensation costs 2,150,126 1,364,142 Other liabilities 48,442 65,303 Total accrued expenses and other current liabilities $ 2,198,568 $ 2,038,291 | 4. Accrued Expenses Accrued expenses consist of the following: December 31, 2022 2021 Contract research and development costs $ — $ 486,795 Professional Fees 608,846 — Employee compensation costs 1,364,142 157,248 Income tax — 107,474 Other liabilities 65,303 238,968 Total accrued expenses and other current liabilities $ 2,038,291 $ 990,485 Included in contract research and development costs as of December 31, 2021 was the liability related to the upfront payment received from VennDC, LLC (“Venn”). See Note 9, Collaborative and Licensing Agreements, for additional information. During the year ended December 31, 2022, the Company recorded a liability of $1,885,843 for unpaid compensation due to current and former directors and officers, of which $1,095,043 is included in accrued expenses and $790,800 is included in other noncurrent liabilities. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Share-Based Compensation | 5. Share-Based Compensation For the three months ended March 31, 2023, share-based compensation expense was $0.2 million. For the three months ended March 31, 2022, the share-based compensation expense allocated to the Company was $0.1 million. As of March 31, 2023, there was $0.5 million of unrecognized compensation cost related to unvested stock-based compensation arrangements that is expected to be recognized over a weighted average period of 0.8 years. The following table summarizes the stock option activity: Number of Weighted- Weighted average (in years) Aggregate Outstanding at December 31, 2022 1,750,967 $ 5.36 2.9 $ 486,097 Granted — $ — Cancelled/Forfeited — $ — Exercised — $ — Outstanding at March 31, 2023 1,750,967 $ 5.36 2.8 $ 47,326 Exercisable at March 31, 2023 1,504,821 $ 4.93 2.3 $ 47,326 The following table summarizes information related to share-based compensation expense recognized in the condensed consolidated statements of operations and comprehensive loss related to the equity awards: Three Months Ended March 31, 2023 2022 Research and development $ 102,488 $ 95,657 General and administrative 62,519 12,357 Total equity-based compensation $ 165,007 $ 108,014 For the three months ended March 31, 2023, the Company extended the term of certain outstanding options to allow the exercise of these options for an additional one year period. The fair value of the stock options is estimated on the date of grant and modification using a Black-Scholes option pricing model with the following weighted average assumptions: Three Months Ended March 31, 2023 2022 Expected volatility 79.3 % 75.1 % Risk-free interest rate 4.66 % 1.81 % Expected term (in years) 1.0 7.0 Expected dividend yield 0 % 0 % | 5. Share-Based Compensation The pH Pharma Ltd Stock Option Plan (the “ Plan Directors of pH Pharma Ltd, or its committee, is responsible for determining the individuals to be granted stock options, the number of stock options each individual will receive, the stock option price per share, and the exercise period of each stock option. Stock options granted pursuant to the Plan generally vest on the second-year anniversary date of grant and may be exercised in whole or in part for 100% of the shares vested at any time after the date of grant. The Spin-Off spun-out The Black-Scholes option pricing model is used when estimating the grant date fair value for stock-based awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was based on the historical volatility of a publicly traded set of peer companies of pH Pharma Ltd. The expected life was equal to the contractual life of the stock option. The risk-free interest rate is based on U.S. Treasury, zero-coupon The following table summarizes the stock option activity: Number of Options Weighted- Weighted average Aggregate Outstanding at December 31, 2021 657,000 $ 5.04 4.1 $ — Granted 135,000 $ 8.05 Allocation of stock options in spin-off (77,000 ) $ 5.40 Cancelled/Forfeited (31,700 ) $ 8.05 Allocation of stock options in business combination 1,067,667 $ 5.36 Outstanding at December 31, 2022 1,750,967 $ 5.36 2.9 $ 486,097 Exercisable at December 31, 2022 1,504,821 $ 4.93 2.3 $ 486,097 The fair value of the stock options granted is estimated on the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 2022 2021 Expected volatility 75.1 % 76.6 % Risk-free interest rate 1.81 % 1.15 % Expected term (in years) 7.0 7.0 Expected dividend yield 0 % 0 % For the years ended December 31, 2022 and 2021, the share-based compensation expense allocated to the Company was $0.6 million and $4,890, respectively. As of December 31, 2022, there was $0.6 million of unrecognized compensation cost related to unvested stock-based compensation arrangements that is expected to be recognized over a weighted average period of 1.01 years. The following table summarizes information related to share-based compensation expense recognized in the statements of operations and comprehensive loss related to the equity awards: Year Ended December 31, 2022 2021 Research and development $ 380,631 $ — General and administrative 179,429 4,890 Total equity-based compensation $ 560,060 $ 4,890 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Fair Value of Financial Instruments | 6. Fair Value of Financial Instruments In accordance with ASC 820, Fair Value Measurements and Disclosures, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The Company’s financial assets and liabilities are measured at fair value and classified within the fair value hierarchy which is defined as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company believes the carrying amounts of its cash and cash equivalents, related party loan and debt approximate their fair values due to their near-term maturities. The following table presents a roll-forward of the fair value of the convertible notes payable, derivative liability, derivative asset and warrant liability that will continue to be measured at fair value on a recurring basis for which fair value is determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy as of March 31, 2023. The valuation models used to determine the fair value at each reporting date require management judgment and pricing inputs from observable and unobservable markets, including projected share prices and probabilities of success. Significant deviations from these estimates and inputs could result in a material change in fair value. Convertible Derivative Derivative Warrant Balance at December 31, 2022 $ 1,374,698 $ 166,000 $ 13,000 $ 525,000 Fair value adjustments 40,797 (1,000 ) (13,000 ) (525,000 ) Balance at March 31, 2023 $ 1,415,495 $ 165,000 $ — $ — The derivative liability, accounted for under ASC 480, “Distinguishing Liabilities from Equity,” related to the $1,512,500 convertible note for the embedded beneficial conversion feature for the settlement of the notes upon maturity was initially valued at $165,000 based on the following inputs: the estimated probability of maturity of 100%, the 10% discount awarded upon conversion and a discount rate of 10%. The derivative asset, accounted for under ASC 815, “Derivatives and Hedging,” for a put option related to the Key Company Stockholder Forward Purchase Agreement entered into in April 2022 had a fair value of $13,000 on December 31, 2022, which is considered to be a Level 3 fair value measurement, as the fair value was determined based on significant inputs not observable in the market. The significant unobservable inputs used to determine the fair value is the probability of the key company stockholder obtaining a margin loan and the Company meeting the NASDAQ listing requirements. The fair value of the Key Company Stockholder Forward Purchase Agreement at December 31, 2022 was valued using a probability weighted scenario analysis with a Black Scholes Option Pricing Model based on a stock price of $4.21, expected volatility of 82.2%, risk-free rate of 4.5% and discounted at 0.5% for the probability of the Company closing the Business Combination Agreement, the key company stockholder obtaining a margin loan and the Company meeting the NASDAQ listing requirements. The fair value of the Key Company Stockholder Forward Purchase Agreement at March 31, 2023 was valued at $0 as the time to fund concluded on March 31, 2023, resulting in a change in fair value of derivative asset of $13,000 for the three months ended March 31, 2023. The White Lion Purchase Agreement qualifies as a standby equity purchase agreement under ASC 815 “Derivatives and Hedging” and includes an embedded put option and an embedded forward option. The put option is recognized on inception and the forward option is recognized upon issuance of notice for the sale of the Company’s Common Stock. As at December 31, 2022, there were no notices issued to White Lion for the sale of Common Stock of the Company. The derivative liability, accounted for under ASC 815, “Derivatives and Hedging,” for a put option related to the White Lion Purchase Agreement entered into on November 3, 2022 had a fair value of $1,000 on December 31, 2022, which is considered to be a Level 3 fair value measurement as the fair value was determined based on significant inputs not observable in the market. The significant unobservable inputs used to determine the fair value were the projected volume weighed average share price at each trading date and the use of the maximum draw down potential. The fair value at December 31, 2022 of the White Lion Purchase Agreement was determined using a Monte Carlo simulation based on the projected stock price of $4.19, expected volatility of 81.0%, risk-free rate of 4.16% and discounted at 0.25% for the probability of the Company timely filing all SEC documents and meeting the NASDAQ listing requirements. The fair value of the White Lion Purchase Agreement at March 31, 2023 was valued using a Monte Carlo simulation based on the projected stock price of $0.65, expected volatility of 78%, risk-free rate of 3.84% and discounted by 5.0% for the probability of the Company timely filing all SEC documents and meeting the OTC Market listing requirements resulting in a change in fair value of $1,000 for the three months ended March 31, 2023 and a derivative liability of $0 at March 31, 2023. In November 2022, upon consummation of the Business Combination, the Company assumed 2,500,000 Private Placement Warrants (as defined in Note 10). The Private Placement Warrants were accounted for under ASC 815, “Derivatives and Hedging,” pursuant to which the Private Placement Warrants do not meet the criteria for equity classification and must be recorded as liabilities. The Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement, as the fair value was determined based on significant inputs not observable in the market. The fair value of the Private Placement Warrants was discounted to present value at March 31, 2023, utilizing the Company’s stock price of $ , a risk-free rate of %, and expected volatility of % of the Company’s common stock. The Company believes the carrying amounts of its cash and cash equivalents, related party loan and current note payable approximate their fair values due to their near-term maturities. There were no transfers among Level 1, Level 2 or Level 3 categories in the three months ended March 31, 2023 and 2022. | 6. Fair Value of Financial Instruments In accordance with ASC 820, Fair Value Measurements and Disclosures, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The Company’s financial assets and liabilities are measured at fair value and classified within the fair value hierarchy which is defined as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company believes the carrying amounts of its cash and cash equivalents, related party loan and debt approximate their fair values due to their near-term maturities. As of December 31, 2021, the Company did not have any assets or liabilities that were recorded at fair value on a recurring basis. The following table presents a roll-forward of the fair value of the convertible notes payable, derivative liability, derivative asset and warrant liability that will continue to be measured at fair value on a recurring basis for which fair value is determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy as of December 31, 2022. The valuation models used to determine the fair value at each reporting date require management judgment and pricing inputs from observable and unobservable markets, including projected share prices and probabilities of success. Significant deviations from these estimates and inputs could result in a material change in fair value. Convertible Derivative Derivative Warrant Balance at December 31, 2021 $ — $ — $ — $ — Issuance of convertible note 2,597,500 165,000 — — Assumption of Forward Purchase Agreement — 68,110 — — Assumption of Key Company Stockholder Forward Purchase Agreement — 12,000 — — Initial Measurement of White Lion Purchase Agreement — 1,900,000 — Assumption of warrant liability in Business Combination — — — 450,000 Change in fair value 1,213,998 (1,979,110 ) 13,000 75,000 Conversion to common stock (2,436,800 ) — — — Balance at December 31, 2022 $ 1,374,698 $ 166,000 $ 13,000 $ 525,000 The derivative liability, accounted for under ASC 480, “Distinguishing Liabilities from Equity,” related to the $1,512,500 convertible note for the embedded beneficial conversion feature for the settlement of the notes upon maturity was initially valued at $165,000 based on the following inputs: the estimated probability of maturity of 100%, the 10% discount awarded upon conversion and a discount rate of 10%. The derivative liability, accounted for under ASC 480, “Distinguishing Liabilities from Equity,” for a put option related to the 375,939 shares of Common Stock under a Forward Purchase Agreement entered into on October 25, 2022 was initially valued at $68,110, which is considered to be a Level 3 fair value measurement as the fair value was determined based on significant inputs not observable in the market. The fair value of the Forward Purchase Agreement was determined using a Black Scholes Option Pricing Model based on the following assumptions: stock price of $13.05, expected volatility of 28.1%, risk-free rate of 4.0% and expected term of 0.16 year. The derivative liability was settled in December 2022 resulting in a change in fair value of derivative liability of $68,110 for the year ended December 31, 2022 and a derivative liability balance of $0 at December 31, 2022. The derivative liability, accounted for under ASC 815, “Derivatives and Hedging,” for a put option related to the Key Company Stockholder Forward Purchase Agreement entered into on April 2022 was initially valued at $12,000 on November 1, 2022, the closing date of the Business Combination Agreement, which is considered to be a Level 3 fair value measurement, as the fair value was determined based on significant inputs not observable in the market. The significant unobservable inputs used to determine the fair value is the probability of the key company stockholder obtaining a margin loan and the Company meeting the NASDAQ listing requirements. The fair value of the Key Company Stockholder Forward Purchase Agreement was initially determined using a probability weighted scenario analysis with a Black Scholes Option Pricing Model based on a stock price of $10, expected volatility of 94.5%, risk-free rate of 4.6% and discounted at 0.5% for the probability of the Company closing the Business Combination Agreement, the key company stockholder obtaining a margin loan and the Company meeting the NASDAQ listing requirements. The fair value of the Key Company Stockholder Forward Purchase Agreement at December 31, 2022 was valued using a probability weighted scenario analysis with a Black Scholes Option Pricing Model based on a stock price of $4.21, expected volatility of 82.2%, risk-free rate of 4.5% and discounted at 0.5% resulting in a change in fair value of derivative liability of $25,000 for the year ended December 31, 2022 and a derivative asset balance of $13,000 at December 31, 2022. The White Lion Purchase Agreement qualifies as a standby equity purchase agreement under ASC 815 “Derivatives and Hedging” and includes , which is considered to be a Level 3 fair value measurement as the fair value was determined based on significant inputs not observable in the market. The significant unobservable inputs used to determine the fair value were the projected volume weighed average share price at each trading date and the use of the maximum draw down potential. The fair value of the White Lion Purchase Agreement was initially determined using a Monte Carlo simulation based on the projected stock price of $ , expected volatility of %, risk-free rate of % and discounted at % for the probability of the Company timely filing all SEC documents and meeting the NASDAQ listing requirements. The fair value of the White Lion Purchase Agreement at December 31, 2022 was valued using a Monte Carlo simulation based on the projected stock price of $ , expected volatility of %, risk-free rate of % and discounted at % resulting in a change in fair value of derivative liability of $ for the year ended December 31, 2022 and a derivative liability balance of $ at December 31, 2022. The Private Placement Warrants were accounted for under ASC 815, “Derivatives and Hedging,” pursuant to which the Private Placement Warrants do not meet the criteria for equity classification and must be recorded as liabilities. The Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement, as the fair value was determined based on significant inputs not observable in the market. The fair value of the Private Placement Warrants was discounted to present value at December 31, 2022, utilizing the Company’s stock price of $4.19, a risk-free rate of 3.99%, and expected volatility of 30% of the Company’s common stock. The Company believes the carrying amounts of its cash and cash equivalents, related party loan and current note payable approximate their fair values due to their near-term maturities. There were no transfers among Level 1, Level 2 or Level 3 categories in the years ended December 31, 2022 and 2021. |
Related Party Transactions and
Related Party Transactions and Shared Service Costs | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions and Shared Service Costs | 7. Related Party Transactions and Shared Service Costs Transactions entered into between the Company and pH Pharma Ltd were included within the condensed consolidated financial statements and are considered related party transactions and have been adjusted to Deficit within the condensed consolidated balance sheets and statements of cash flows as they represent an investment to the Company. The components of the net transfers from pH Pharma Ltd as of March 31, 2023 and 2022 are as follows: Three Months Ended March 31, 2023 2022 Corporate allocations Research and development $ — $ 482,160 Selling, general and administrative — 72,345 Accounts payable and general financing activities — 809,469 Net increase in contributions from member $ — $ 1,363,974 On March 1, 2022, the Company and pH Pharma Ltd entered into an administrative services and facilities agreement whereby pH Pharma Ltd will perform services, functions and responsibilities for the Company. Under the agreement, the Company paid pH Pharma Ltd $100,000 per month through August 30, 2022 and paid $15,000 from September 1, 2022 through February 28, 2023 based on the estimated value of the level of service to be performed. Additionally, the Company will pay pH Pharma Ltd $3,000 per month in lease payments. At March 31, 2023 and December 31, 2022, the Company recorded a liability to accounts payable of $345,808 and $426,673 related to this agreement. At March 31, 2023 and December 31, 2022, the Company recorded a liability of $2,122,710 and $1,885,843, respectively, for unpaid compensation due to current and former directors and officers of which $1,892,060 and $1,095,043, respectively, is included in accrued expenses and $230,650 and $790,800, respectively, is included in other non-current Employment Agreements In January 2022, the Company entered into an employment agreement with its founder and director. The effective date of the employment agreement was February 1, 2022, and was subject to the completion of the Business Combination. As part of the agreement, the Company agreed to repay its founder and director $1.5 million in forwent salary over a period of four years. Further, the employment agreement provides for the payment of success fees in connection with future business or corporate development transactions (licensing, product development and acquisitions). In March 2022, the Company entered into an employment agreement with its chief operating officer which was subject to the completion of the Business Combination. The agreement provides for confirmation of Peak Bio’s previously agreed upon success fee payment upon consummation of the business combination with Ignyte in the amount of $250,000 and the payment of success fees in connection with future business or corporate development transactions (licensing, product development and acquisitions). | 7. Related Party Transactions and Shared Service Costs Transactions entered into between the Company and pH Pharma Ltd were included within the consolidated financial statements and are considered related party transactions and have been adjusted to Equity within the balance sheets and statements of cash flows as they represent an investment to the Company. The components of the net transfers from pH Pharma Ltd as of December 31, 2022 and 2021 are as follows: Year Ended December 31, 2022 2021 Corporate allocations Research and development $ 482,160 $ 2,055,839 Selling, general and administrative 72,345 447,506 Accounts payable and general financing activities 809,469 3,925,492 Net increase in contributions from member $ 1,363,974 $ 6,428,837 On March 1, 2022, the Company and pH Pharma Ltd entered into an administrative services and facilities agreement whereby pH Pharma Ltd will perform services, functions and responsibilities for the Company. Under the agreement, the Company paid pH Pharma Ltd $100,000 per month through August 30, 2022 and will pay $15,000 from September 1, 2022 through February 28, 2023 based on the estimated value of the level of service to be performed. Additionally, the Company will pay pH Pharma Ltd $3,000 per month in lease payments. At December 31, 2022 the Company recorded a liability to accounts payable of $426,673 related to this agreement. |
Leases
Leases | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Leases | 8. Leases On January 1, 2022, the Company adopted ASC 842 using the modified retrospective transition approach allowed under ASU 2018-11 2016-02 In October 2021, the Company entered into a lease for laboratory and office facilities in Palo Alto, California that expires in April 2027 with a five-year renewal option and opened a secured letter of credit with a third-party financial institution in lieu of a security deposit for $177,000. Base rent for this lease is approximately $89,000 monthly with annual escalations of 3%. In March 2023, the Company vacated the premises and returned possession of the premises to the landlord in April 2023. The full amount of the security deposit has been applied to back rent and the Company is still responsible for the outstanding payments under the lease. The Company recognized a $3.5 million impairment loss on operating lease right of use asset for the three months ended March 31, 2023. Rent expense for the three months ended March 31, 2023 and 2022 was $0.3 million and $0.3 million, respectively. Quantitative information regarding the Company’s leases for the three months ended March 31, 2023 and 2022 is as follows: Three Months Ended March 31, 2023 2022 Operating cash flows paid for amounts included in the measurement of lease liabilities $ 177,111 $ 141,542 Operating lease liabilities arising from obtaining right of use assets $ — $ 4,189,492 Weighted-average remaining lease terms (years) 4.1 5.0 Weighted-average discount rate 10.0 % 10.0 % Future lease payments under noncancelable leases are as follows at March 31, 2023: Operating 2023 (remaining nine months) $ 979,745 2024 1,189,454 2025 1,223,029 2026 1,257,612 2027 422,107 Thereafter — Total future minimum lease payments $ 5,071,947 Less: imputed interest (917,000 ) Total future minimum lease payments $ 4,154,947 | 8. Leases On January 1, 2022, the Company adopted ASC 842 using the modified retrospective transition approach allowed under ASU 2018-11 2016-02 non-current In October 2019, the Company entered into a 24-month In October 2021, the Company entered into a lease for laboratory and office facilities in Palo Alto, California that expires in April 2027 with a five-year renewal option and opened a secured letter of credit with a third-party financial institution in lieu of a security deposit for $177,000. Base rent for this sublease is approximately $89,000 monthly with annual escalations of 3%. Pursuant to the terms of the lease, the landlord reimbursed the Company approximately $300,000 of tenant improvements. The Company is required to repay this amount over the remaining term of the lease with 7% interest. Rent expense, including an allocation of costs from pH Pharma Ltd, for the years ended December 31, 2022 and 2021 was $1.2 million and $0.9 million, respectively. Quantitative information regarding the Company’s leases for the year ended December 31, 2022 is as follows: Operating Lease Operating cash flows paid for amounts included in the measurement of lease liabilities $ 786,563 Operating lease liabilities arising from obtaining right of use assets $ 4,189,492 Weighted-average remaining lease terms (years) 4.3 Weighted-average discount rate 10.0 % Future lease payments under noncancelable leases are as follows at December 31, 2022: Operating Lease 2023 $ 1,156,856 2024 1,189,454 2025 1,223,029 2026 1,257,612 2027 422,107 Thereafter — Total future minimum lease payments $ 5,249,058 Less: imputed interest (1,021,213 ) Total future minimum lease payments $ 4,227,845 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | (1) Commitments and Contingencies From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of March 31, 2023, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations. At each reporting period, the Company evaluates known claims to determine whether a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies | 9. Commitments and Contingencies Bayer Acquisition Agreement In March 2017, pH Pharma, Inc. entered into an assignment, license, development and commercialization agreement (the “Bayer Acquisition Agreement”) with Bayer, to acquire from Bayer all right, title and interest in and to PHP-303, Upon entering into the Bayer Acquisition Agreement, pH Pharma, Inc. made an upfront payment, and the Company has agreed to pay certain development and regulatory milestones and future royalties. Royalties will be payable on a licensed product-by-licensed country-by-country Either party may terminate the Bayer Acquisition Agreement upon prior written notice for the other party’s material breach that remains uncured for a specified period of time or insolvency. Bayer agreed not to assert any Bayer intellectual property rights that were included in the scope of the Bayer Acquisition Agreement against the Company. Employment Agreements In January 2022, the Company entered into an employment agreement with its founder and director. The effective date of the employment agreement was February 1, 2022, and is subject to the completion of the business combination with Ignyte. As part of the agreement, the Company agreed to repay its founder and director $1.5 million in forwent salary over a period of four years. In addition, as part of the agreement, the Company agreed to repay $0.5 million of the $1.5 million outstanding under the related party loan upon closing of the Ignyte transaction. The remaining $1.0 million plus accrued interest will be repaid pursuant to the discretion of the Company’s Board of Directors. Further, the employment agreement provides for the payment of success fees in connection with future business or corporate development transactions (licensing, product development and acquisitions). In March 2022, the Company entered into an employment agreement with its chief operating officer which is subject to the completion of the business combination with Ignyte. The agreement provides for confirmation of Peak Bio’s previously agreed upon success fee payment upon consummation of the business combination with Ignyte in the amount of $250,000 and the payment of success fees in connection with future business or corporate development transactions (licensing, product development and acquisitions). Legal proceedings The Company is not currently a party to any material legal proceedings. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to its legal proceedings as incurred. |
Collaborative and Licensing Agr
Collaborative and Licensing Agreements | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative and Licensing Agreements | 10. Collaborative and Licensing Agreements Venn License Agreement In December 2019, a collaboration and license agreement (the “License Agreement”) was entered into with Venn to pursue research and development of certain payload and linker technologies that are useful for the development of antibody-drug conjugates. This collaboration was expected to allow Venn to further develop and commercialize such antibody-drug conjugates developed under the collaboration. Under the collaboration agreement with Venn, the Company received a $400,000 upfront payment and was expected to be eligible to receive reimbursement of costs and expenses incurred, certain development and regulatory milestone payments, royalties and commercial milestone payments with respect to licensed products for each product. Milestone payments were expected to be payable following the achievement of certain development, regulatory and commercial milestone events in each product, up to an aggregate of $107.1 million per product. Royalty payments were expected to be based on net sales of licensed products on a licensed product-by-licensed In April 2022, the Company entered into an agreement with its founder and director, Dr. Huh, in consideration of the repayment to be made by the Company’s founder and director to settle a contractual obligation for the upfront payment received by the Company associated with the License Agreement with Venn. Per the agreement, the Company agreed to repay its founder and director $400,000, with interest to accrue on the unpaid principal balance at the rate of 1% per annum. The timing of the repayment will be determined and pursuant to the discretion of the Company’s Board of Directors. In May 2022, the Company’s founder and director repaid to Venn the $400,000 upfront payment and the License Agreement was terminated. During the years ended December 31, 2022 and 2021, the Company did not recognize any revenue related to the upfront payment as it was not probable that a significant reversal in the amount of cumulative revenue recognized would not occur. In addition, no reimbursement of costs and expenses incurred, and no other payments (for development and regulatory milestones, royalties, and commercial milestones with respect to licensed products for each product) were received by the Company during the years ended December 31, 2022 and 2021 as none of the performance obligations were satisfied by the Company. At December 31, 2021, the Company recorded a liability to accrued expenses of $400,000 related to the upfront payment. At December 31, 2022, the Company recorded a liability to related party loans of $400,000 related to this payment. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | ||
Stockholders' Equity | 10. Stockholders’ Equity Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share, of which no shares were issued and outstanding at March 31, 2023. Common Stock Peak Bio, Inc. is authorized to issue 60,000,000 shares of common stock with a par value of $0.0001 per share (the “Common Stock”). The Spin-Off In May 2022, the Company entered into an agreement with a certain investor in which the investor purchased an aggregate of 63,856 shares of Peak Bio Co., Ltd. common stock for aggregate gross proceeds of approximately $1.2 million. PIPE Subscription Agreements In November 2022, concurrent with the closing of the Business Combination, the Company entered into subscription agreements with certain investors in which the investors purchased, in a private placement, an aggregate of 302,500 shares of Common Stock and 281,325 warrants to purchase shares of Ignyte Common Stock, at an exercise price of $0.01 per share for aggregate gross proceeds of $3.025 million. The warrants are on terms substantially the same as the outstanding warrants that were included in the units issued in Ignyte’s initial public offering, except that the warrants are non redeemable, and the warrants are exercisable for one year. Forward Purchase Agreement On December 29, 2022, the Company purchased 375,939 shares of our Common Stock at a price of $10.115 per share following the exercise of an investor’s right to sell up to 450,000 shares of Common Stock under a previously disclosed Forward Purchase Agreement entered into on October 25, 2022. The 375,939 shares of Common Stock have been retired. As a result of that exercise, funds in the amount of $4,551,750 being held in escrow in connection with the Forward Purchase Agreement were distributed as follows: $749,127 to the Company and $3,802,623 to the investor. Additional PIPE Subscription Agreement In December 2022, the Company entered into a subscription agreement whereby the Company agreed to issue and sell to the investor party thereto, in a private placement, (i) 50,000 shares of our common stock at $10.00 per share and (ii) 46,500 warrants to purchase shares of our Common Stock, at an exercise price of $0.01 per share. The warrants are on terms substantially the same as the outstanding warrants that were included in the units issued in Ignyte’s initial public offering, except that the warrants are not redeemable, and the warrants are exercisable for one year. Key Company Stockholder Agreements In April 2022, the Company entered into a forward purchase agreement (the “Key Company Stockholder Forward Purchase Agreement”) with its founder and director, Hoyoung Huh (the “Key Company Stockholder”). Pursuant to the terms of the Key Company Stockholder Forward Purchase Agreement, the Key Company Stockholder would, subject to the receipt of margin financing within 180 days following the closing of the Business Combination, purchase shares of the Company’s common stock at a purchase price of $10.00 per share in a private placement (the “Key Company Stockholder Purchase”) for up to an aggregate amount of $10,000,000 (the “Subscription Amount”), subject to the conditions set forth in the Key Company Stockholder Forward Purchase Agreement. The Company recorded a derivative liability for this agreement (see Note 6). In December 2022, the Company and the Key Company Stockholder entered into an amendment to the Key Company Stockholder Forward Purchase Agreement (the “Amendment to Key Company Stockholder Forward Purchase Agreement”), pursuant to which (i) the Key Company Stockholder Purchase is no longer subject to the receipt of margin financing as a condition precedent, (ii) the Key Company Stockholder agreed to fund the Subscription Amount on or prior to March 31, 2023 and (iii) the Key Company Stockholder Purchase would be consummated at a purchase price of $5.18 per share of the Company’s common stock. Accordingly, upon closing of such purchase, the Key Company Stockholder will receive 1,930,501 shares of Common Stock in exchange for his $10.0 million investment in the Company. In April 2023, the Company received notice from its founder and director informing the Company that he would not consummate the purchase of the Key Company Stockholder Forward Purchase Agreement as a result of the Company’s failure to satisfy the condition to be listed on Nasdaq as required by the agreement. As a result, the Company cancelled and forfeited the 1,930,501 shares of common stock being held in escrow. White Lion Common Stock Purchase and Registration Rights Agreements On November 3, 2022, the Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) and Registration Rights (the “White Lion RRA”) with White Lion Capital, LLC, a Delaware limited liability company (“White Lion”). Pursuant to the White Lion Purchase Agreement, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, up to $100,000,000 in aggregate gross purchase price of newly issued shares of its Common Stock, subject to certain limitations and conditions set forth in the White Lion Purchase Agreement. Capitalized terms used but not otherwise defined in this section shall have the meanings given to such terms by the White Lion Purchase Agreement and the White Lion RRA. The Company recorded a derivative liability for this agreement (see Note 6). The Company is obligated under the White Lion Purchase Agreement and the White Lion RRA to file a registration statement with the SEC to register the Common Stock under the Securities Act, for the resale by White Lion of shares of Common Stock that the Company may issue to White Lion under the White Lion Purchase Agreement. Subject to the satisfaction of certain customary conditions including, without limitation, the effectiveness of a registration statement registering The number of shares sold pursuant to any such notice may not exceed (i) the lower of (a) the Purchase Notice Fixed Limit (described below) and (b) the product of (1) the Average Daily Trading Volume (as defined in the White Lion Purchase Agreement), and (2) the applicable Percentage Limit (as defined in the White Lion Purchase Agreement). The Purchase Notice Fixed Limit is $500,000 upon payment of the Initial Commitment Shares (as defined in the White Lion Purchase Agreement) and can be increased in two tranches: (A) to $1,000,000 following an aggregate purchase of $5,000,000 shares and issuance by the Company to White Lion of an additional $250,000 in Commitment Shares, and (B) to $2,000,000 following an aggregate purchase of $10,000,000 shares and issuance by the for payment of an additional $250,000 in Commitment Shares (as defined in the White Lion Purchase Agreement). The applicable Percentage Limit is 40% or 150% depending on the price the Company agrees to sell shares to White Lion. At an applicable Percentage Limit of 40%, the Purchase Price to be paid by White Lion for any such shares will equal 97% of lowest daily volume-weighted average price of Common Stock during a period of two consecutive Trading Days following the applicable Purchase Notice Date (as defined in the White Lion Purchase Agreement) until an aggregate of $50,000,000 in Purchase Notice Shares (as defined in the White Lion Purchase Agreement) have been purchased under White Lion Purchase Agreement, at which point the Purchase Price (as defined in the White Lion Purchase Agreement) to be paid by White Lion will equal 98% of the lowest daily volume-weighted average price of Common Stock during a period of two consecutive Trading Days following the applicable Purchase Notice Date. At an applicable Percentage Limit of 150%, the Purchase Price to be paid by White Lion for any such shares will equal 94.5% of the lowest daily volume-weighted average price of Common Stock during a period of three consecutive Trading Days following the applicable Purchase Notice Date. The Company will have the right to terminate the White Lion Purchase Agreement at any time after commencement, at no cost or penalty, upon three (3) Trading Days’ prior written notice. Additionally, White Lion will have the right to terminate the White Lion Purchase Agreement upon three (3) days’ prior written notice to the Company if (i) there is a Fundamental Transaction (as defined in the White Lion Purchase Agreement), (ii) the Company is in breach or default in any material respect of the White Lion RRA, (iii) there is a lapse of the effectiveness, or unavailability of, the registration statement for a period of 45 consecutive Trading Days or for more than an aggregate of 90 Trading Days in any 365-day In consideration for the commitments of White Lion, as described above, the Company has agreed that it will issue to White Lion shares of Common Stock having a value of $250,000 based upon the Closing Sale Price (as defined in the White Lion Purchase Agreement) of Common Stock two Trading Days prior to the filing of the Initial Registration Statement as Initial Commitment Shares. The Company may increase the number of shares it may sell to White Lion by issuing additional Commitment Shares in two additional tranches of $250,000 each. The Company issued Initial Commitment Shares of 50,200 shares of Common Stock to White Lion, based upon the Closing Sale Price of our Common Stock of $4.98 per share on November 30, 2022. Concurrently with the execution of the White Lion Purchase Agreement, the Company entered into the White Lion RRA with White Lion in which the Company agreed to register the shares of Common Stock purchased by White Lion with the SEC for resale within 30 days of the consummation of a business combination. The White Lion RRA also contains usual and customary damages provisions for failure to file and failure to have the registration statement declared effective by the SEC within the time periods specified. The White Lion Purchase Agreement and the White Lion RRA contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties. In March 2023, the Company entered into an amendment to the White Lion Purchase Agreement to give the Company the right, but not the obligation to require White Lion to purchase shares of the Company’s common stock while trading on the OTC Market. Under the terms of the amendment, at an applicable Percentage Limit of 200%, the Purchase Price to be paid by White Lion for any such shares will equal 90% of the lowest daily volume-weighted average price of Common Stock during a period of six consecutive Trading Days following the applicable Purchase Notice Date if the Company is listed on the OTC Market with the exception of the OTC Pink or OTC Bulletin Board, in which case the Purchase Price will equal 85% of the lowest daily volume-weighted average price of Common Stock during a period of six consecutive Trading Days following the applicable Purchase Notice Date. Further, the Company will issue to White Lion within five (5) Trading Days following the effective date of the amendment fully paid, non-assessable In addition, in the event the Company does not issue Purchase Notices (as defined in the White Lion Purchase Agreement) to White Lion providing for the purchase of at least $1,000,000 of Purchase Shares (as defined in the White Lion Purchase Agreement) in the aggregate within 180 days following the effective date of the amendment, the Company will issue to White Lion an additional number of fully paid, non-assessable Public Warrants In November 2022, upon consummation of the Business Combination, the Company assumed 2,875,000 public warrants (the “Public Warrants”). Each Public Warrant entitles the holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment as discussed herein. The Public Warrants became exercisable 30 days after the completion of the Business Combination. However, no Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Public Warrants, multiplied by the difference between the exercise price of the Public Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The Public Warrants will expire on the fifth anniversary of the completion of an initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Company may call the Public Warrants for redemption: • in whole and not in part; • at a price of $0.01 per warrant; • at any time after the warrants become exercisable, • upon not less than 30 days’ prior written notice of redemption to each warrant holder; and • if, and only if, the reported last sale price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations) for any 20 trading days within a 30-trading • if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such warrants. If the Company calls the Public Warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the Public Warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Public Warrants, multiplied by the difference between the exercise price of the Public Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of Public Warrants. Private Placement Warrants In November 2022, upon consummation of the Business Combination, the Company assumed 2,500,000 private placement warrants (the “Private Placement Warrants”). Each Private Placement Warrant will entitle the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants are non-redeemable A summary of the Company’s outstanding warrants at March 31, 2023 is as follows: Description Number of Exercise price Expiration Private Placement Warrants 2,500,000 $ 11.50 11/1/2027 Public Warrants 2,875,000 $ 11.50 11/1/2027 Other Warrants 492,045 $ 0.01 11/1/2023 Outstanding Warrants 5,867,045 | 11. Stockholders’ Equity Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share, of which no shares were issued and outstanding at December 31, 2022. Common Stock The Company is authorized to issue 60,000,000 shares of common stock with a par value of $0.0001 per share. The Spin-Off In May 2022, the Company entered into an agreement with a certain investor in which the investor purchased an aggregate of shares of Peak Bio Common Stock for aggregate gross proceeds of approximately $ million, before giving effect to the exchange ratio of . PIPE Subscription Agreements In November 2022, concurrently with the closing of the Business Combination, the Company entered into subscription agreements with certain investors in which the investors purchased, in a private placement, an aggregate of 302,500 shares of Common Stock and 281,325 warrants to purchase shares of Ignyte Common Stock, at an exercise price of $0.01 per share for aggregate gross proceeds of $3.025 million. The warrants are on terms substantially the same as the outstanding warrants that were included in the units issued in Ignyte’s initial public offering, except that the warrants are non-redeemable, Forward Purchase Agreement On December 29, 2022, the Company purchased 375,939 shares of our Common Stock at a price of $10.115 per share following the exercise of an investor’s right to sell up to 450,000 shares of Common Stock under a previously disclosed Forward Purchase Agreement entered into on October 25, 2022. The 375,939 shares of Common Stock have been retired. As a result of that exercise, funds in the amount of $4,551,750 being held in escrow in connection with the Forward Purchase Agreement were distributed as follows: $749,127 to us and $3,802,623 to the investor. The Company recorded a derivative liability for this agreement (see Note 6). Additional PIPE Subscription Agreement In December 2022, the Company entered into a subscription agreement whereby the Company agreed to issue and sell to the investor party thereto, in a private placement, (i) 50,000 shares of our common stock at $10.00 per share and (ii) 46,500 warrants to purchase shares of our Common Stock, at an exercise price of $0.01 per share. The warrants are on terms substantially the same as the outstanding warrants that were included in the units issued in Ignyte’s initial public offering, except that the warrants are not redeemable, and the warrants are exercisable for one year. Key Company Stockholder Agreements In April 2022, the Company entered into a forward purchase agreement (the “Key Company Stockholder Forward Purchase Agreement”) with its founder and director, Hoyoung Huh (the “Key Company Stockholder”). Pursuant to the terms of the Key Company Stockholder Forward Purchase Agreement, the Key Company Stockholder would, subject to the receipt of margin financing within 180 days following the closing of the Business Combination, purchase shares of the Company’s common stock at a purchase price of $10.00 per share in a private placement (the “Key Company Stockholder Purchase”) for up to an aggregate amount of $10,000,000 (the “Subscription Amount”), subject to the conditions set forth in the Key Company Stockholder Forward Purchase Agreement. The Company recorded a derivative liability for this agreement (see Note 6). In December 2022, the Company and the Key Company Stockholder entered into an amendment to the Key Company Stockholder Forward Purchase Agreement (the “Amendment to Key Company Stockholder Forward Purchase Agreement”), pursuant to which (i) the Key Company Stockholder Purchase is no longer subject to the receipt of margin financing as a condition precedent, (ii) the Key Company Stockholder agreed to fund the Subscription Amount on or prior to March 31, 2023 and (iii) the Key Company Stockholder Purchase would be consummated at a purchase price of $5.18 per share of the Company’s common stock. Accordingly, upon closing of such purchase, the Key Company Stockholder will receive 1,930,501 shares of Common Stock in exchange for his $10.0 million investment in the Company. In April 2023, the Company received notice from its founder and director informing the Company that he would not consummate the purchase of the Key Company Stockholder Forward Purchase Agreement as a result of the Company’s failure to satisfy the condition to be listed on Nasdaq as required by the agreement. As a result the Company cancelled and forfeited the 1,930,501 shares of common stock being held in escrow. In April 2023, the Company and its founder and director entered into a letter agreement to provide for the conversion of loans totaling $2,031,034 into future qualified financings on the same terms with other investors. Pursuant to the agreement, the amount converted would be based on the Key Company Stockholder’s pro-rata White Lion Common Stock Purchase and Registration Rights Agreements On November 3, 2022, the Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) and Registration Rights (the “White Lion RRA”) with White Lion Capital, LLC, a Delaware limited liability company (“White Lion”). Pursuant to the White Lion Purchase Agreement, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, up to $100,000,000 in aggregate gross purchase price of newly issued shares of its Common Stock, subject to certain limitations and conditions set forth in the White Lion Purchase Agreement. Capitalized terms used but not otherwise defined in this section shall have the meanings given to such terms by the White Lion Purchase Agreement and the White Lion RRA. The Company recorded a derivative liability for this agreement (see Note 6). The Company is obligated under the White Lion Purchase Agreement and the White Lion RRA to file a registration statement with the SEC to register the Common Stock under the Securities Act, for the resale by White Lion of shares of Common Stock that the Company may issue to White Lion under the White Lion Purchase Agreement. Subject to the satisfaction of certain customary conditions including, without limitation, the effectiveness of a registration statement registering the shares issuable pursuant to the White Lion Purchase Agreement, the Company’s right to sell shares to White Lion will commence on the effective date of the registration statement and extend until November 1, 2025. During such term, subject to the terms and conditions of the White Lion Purchase Agreement, the Company may notify White Lion when it exercises its right to sell shares (the effective date of such notice, a “Notice Date”). The number of shares sold pursuant to any such notice may not exceed (i) the lower of (a) the Purchase Notice Fixed Limit (described below) and (b) the product of (1) the Average Daily Trading Volume (as defined in the White Lion Purchase Agreement), and (2) the applicable Percentage Limit (as defined in the White Lion Purchase Agreement). The Purchase Notice Fixed Limit is $500,000 upon payment of the Initial Commitment Shares (as defined in the White Lion Purchase Agreement) and can be increased in two tranches: (A) to $1,000,000 following an aggregate purchase of $5,000,000 shares and issuance by the Company to White Lion of an additional $250,000 in Commitment Shares, and (B) to $2,000,000 following an aggregate purchase of $10,000,000 shares and issuance by the for payment of an additional $250,000 in Commitment Shares (as defined in the White Lion Purchase Agreement). The applicable Percentage Limit is 40% or 150% depending on the price the Company agrees to sell shares to White Lion. At an applicable Percentage Limit of 40%, the Purchase Price to be paid by White Lion for any such shares will equal 97% of lowest daily volume-weighted average price of Common Stock during a period of two consecutive Trading Days following the applicable Purchase Notice Date (as defined in the White Lion Purchase Agreement) until an aggregate of $50,000,000 in Purchase Notice Shares (as defined in the White Lion Purchase Agreement) have been purchased under White Lion Purchase Agreement, at which point the Purchase Price (as defined in the White Lion Purchase Agreement) to be paid by White Lion will equal 98% of the lowest daily volume-weighted average price of Common Stock during a period of two consecutive Trading Days following the applicable Purchase Notice Date. At an applicable Percentage Limit of 150%, the Purchase Price to be paid by White Lion for any such shares will equal % of the lowest daily volume-weighted average price of Common Stock during a period of three consecutive Trading Days following the applicable Purchase Notice Date. The Company will have the right to terminate the White Lion Purchase Agreement at any time after commencement, at no cost or penalty, upon three (3) Trading Days’ prior written notice. Additionally, White Lion will have the right to terminate the White Lion Purchase Agreement upon three (3) days’ prior written notice to the Company if (i) there is a Fundamental Transaction (as defined in the White Lion Purchase Agreement), (ii) the Company is in breach or default in any material respect of the White Lion RRA, (iii) there is a lapse of the effectiveness, or unavailability of, the registration statement for a period of 45 consecutive Trading Days or for more than an aggregate of 90 Trading Days in any 365-day In consideration for the commitments of White Lion, as described above, the Company has agreed that it will issue to White Lion shares of Common Stock having a value of $250,000 based upon the Closing Sale Price (as defined in the White Lion Purchase Agreement) of Common Stock two Trading Days prior to the filing of the Initial Registration Statement as Initial Commitment Shares. The Company may increase the number of shares it may sell to White Lion by issuing additional Commitment Shares in two additional tranches of $250,000 each. The Company issued Initial Commitment Shares of 50,200 shares of Common Stock to White Lion, based upon the Closing Sale Price of our Common Stock of $4.98 per share on November 30, 2022. Concurrently with the execution of the White Lion Purchase Agreement, the Company entered into the White Lion RRA with White Lion in which the Company agreed to register the shares of Common Stock purchased by White Lion with the SEC for resale within 30 days of the consummation of a business combination. The White Lion RRA also contains usual and customary damages provisions for failure to file and failure to have the registration statement declared effective by the SEC within the time periods specified. The White Lion Purchase Agreement and the White Lion RRA contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties. In March 2023, the Company entered into an amendment to the White Lion Purchase Agreement to give the Company the right, but not the obligation to require White Lion to purchase shares of the Company’s common stock while trading on the OTC Market. Under the terms of the amendment, the Company will issue to White Lion within five (5) Trading Days following the effective date of the amendment fully paid, non-assessable In addition, in the event the Company does not issue Purchase Notices (as defined in the White Lion Purchase Agreement) to White Lion providing for the purchase of at least $1,000,000 of Purchase Shares (as defined in the White Lion Purchase Agreement) in the aggregate within 180 days following the effective date of the amendment, the Company will issue to White Lion an additional number of fully paid, non-assessable Public Warrants In November 2022, upon consummation of the Business Combination, the Company assumed 2,875,000 public warrants. Each whole warrant entitles the holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment as discussed herein. The warrants became exercisable 30 days after the completion of the Business Combination. However, no warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of the completion of an initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Company may call the warrants for redemption: • in whole and not in part; • at a price of $0.01 per warrant; • at any time after the warrants become exercisable, • upon not less than 30 days’ prior written notice of redemption to each warrant holder; and • if, and only if, the reported last sale price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations) for any 20 trading days within a 30-trading • if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Private Placement Warrants In November 2022, upon consummation of the Business Combination, the Company assumed 2,500,000 Private Placement Warrants. Each Private Placement Warrant will entitle the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Further, the Sponsor had agreed not to transfer, assign, or sell the Private Placement Warrants (including the shares of Common Stock issuable upon the exercise of the Private Placement Warrants), except to certain permitted transferees, until after the consummation of the Business Combination. A summary of the Company’s outstanding warrants at December 31, 2022 is as follows: Description Number of Warrants Exercise price Expiration Date Private Placement Warrants 2,500,000 $ 11.50 11/1/2027 Public Warrants 2,875,000 $ 11.50 11/1/2027 Other Warrants 492,045 $ 0.01 11/1/2023 Outstanding Warrants 5,867,045 |
Grant Revenue
Grant Revenue | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue Recognition [Abstract] | ||
Grant Revenue | 11. Grant Revenue Government grants Department of Defense, US Army Medica Research Acquisition Activity — this grant is for work on a COVID-19 | 12. Grant Revenue Government grants Department of Defense, US Army Medica Research Acquisition Activity — this grant is for work on a COVID-19 |
Debt
Debt | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Debt | 12. Debt Related Party Loans In August 2021, the Company received proceeds from a loan in the amount of approximately In January 2022, the Company entered into an employment agreement with its founder and director. As part of the agreement, the Company agreed to repay $0.5 million of the $1.5 million outstanding under the related party loan upon closing of the Ignyte transaction. The remaining $1.0 million plus accrued interest will be repaid pursuant to the discretion of the Company’s Board of Directors. The Company repaid $150,000 of the loan in December 2022. At March 31, 2023 and December 31, 2022, there was $1.35 million outstanding under this loan. In April 2022, the Company entered into an agreement with its founder and director, in consideration of the repayment to be made by the Company’s founder and director to settle a contractual obligation for the upfront payment received by the Company associated with the License Agreement with Venn. Per the agreement, the Company agreed to repay its founder and director $400,000, with interest to accrue on the unpaid principal balance at the rate of 1% per annum. The timing of the repayment will be determined and pursuant to the discretion of the Company’s Board of Directors. In May 2022, the Company’s founder and director repaid to Venn the $400,000 upfront payment and the License Agreement was terminated. At March 31, 2023 and December 31, 2022, the Company recorded a liability to related party loans of $400,000 related to this payment. In May 2022, the Company received proceeds from a loan in the amount of approximately $23,000 from an employee of the Company to settle certain payables of the Company. The loan accrues interest at 4% per annum and was repaid in December 2022. In September 2022, the Company received proceeds from a loan in the amount of $500,000 from one of its director nominees. The loan matures on the second anniversary and bear interest at a rate of 5.0% per annum. The loan was evidenced by a promissory note, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity without the consent of the lender. In November 2022, the related party loan entered into in September 2022 was amended resulting in the outstanding principal and accrued interest under the related party loan converting at a price of $10.00 per share into 50,273 shares of common stock along with a warrant to purchase 46,754 shares of common stock with an exercise price of $0.01 per share. In November 2022, upon consummation of the Business Combination, the Company assumed a promissory note of $ with Ignyte Sponsor LLC. The principal balance of the promissory note was payable in cash upon consummation of the Business Combination. No interest shall accrue on the unpaid principal balance of the promissory note. At March 31, 2023 and December 31, 2022, the Company recorded a liability for the promissory note of $ . In May 2023, all amounts owed under this promissory note were cancelled and forgiven. In March 2023, the Company received proceeds from a loan in the amount of $250,000 from its founder and director. The loan matures on December 31, 2023 and bear interest at a rate of 5.0% per annum. The loan was evidenced by a promissory note, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity without the consent of the lender. Long-term Convertible Notes Payable From July through September 2022, the Company received proceeds from loans in the amount of $1.25 million from several lenders. The loans mature on the second anniversary and bear interest at a rate of 5.0% per annum. The loans were evidenced by promissory notes, which contain customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loans may not be prepaid by the Company at any time prior to maturity without the consent of the lender. The Company will provide for the conversion of the principal and interest of the loans into shares of common stock at fair market value and 25% warrant coverage on common stock prior to the consummation of the Business Combination. Warrant coverage is conditioned on closing of the Business Combination and will be exercisable after the closing of the Business Combination with an exercise price of $0.01. Upon issuance, the Company elected the fair value option to account for the promissory notes, including the component related to accrued interest. In November 2022, the Company amended the terms to provide warrant coverage on the conversion of the loans from 25% to 93% warrant coverage on common stock. The outstanding principal and accrued interest under the promissory notes converted at a price of $10.00 per share into 126,306 shares of common stock along with warrants to purchase 117,466 shares of common stock with an exercise price of $0.01 per share. On November 1, 2022, the Company issued a $1,512,500 convertible note. The convertible note accrues interest at a rate of 8% per annum and is payable on October 31, 2023, provided however that the Company agrees to make mandatory prepayments on this note (which shall first be applied to accrued interest and then to principal) from time to time in amounts equal to 15% of the gross proceeds received by the Company from any equity lines, forward purchase agreements or other equity financings consummated by Company prior to the maturity date. On the maturity date, the note holder may, in its sole and absolute discretion, convert all or part of the principal and/or accrued interest of this convertible note into shares of common stock of the Company at a per share conversion price equal to 90% of the volume weighted average price of a share of common stock of the Company for the five trading days immediately prior to the maturity date. The Company determined that the conversion upon maturity represents an embedded derivative that requires bifurcation and separate accounting. The Company determined the embedded derivative liability fair value to be $165,000 and recorded the remaining proceeds to convertible note payable. The fair value of the derivative liability at March 31, 2023 and December 31, 2022 was $165,000. The allocation of funds to the derivative liability resulted in a discount to the convertible notes of $165,000 which is being amortized to interest expense over the term of the convertible notes. The Company recorded interest expense for the three months ended March 31, 2023 related to the amortization of the discount to the convertible notes of $40,797. Insurance Financing Payable The Company obtained financing for certain Director & Officer liability insurance policy premiums. The agreement assigns First Insurance Funding (Lender) a first policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums. If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy. The total premiums, taxes and fees financed is approximately $1,006,342 with an annual interest rate of 7.20%. In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker, the Company unconditionally promises to pay Lender the amount Financed plus interest and other charges permitted under the Agreement. At March 31, 2023 and December 31, 2022, the Company recognized $575,985 and $921,576, respectively, as an insurance financing note payable in its consolidated balance sheets. The Company will pay the insurance financing through monthly installment payments through August 1 , | 13. Debt PPP loans pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) In April 2020, the Company received proceeds from a loan in the amount of $367,770 from Silicon Valley Bank (“SVB”), as lender, pursuant to the PPP of the CARES Act. The loan originally matured on April 20, 2022 and bore interest at a rate of 1.0% per annum. The loan was evidenced by a promissory note dated April 20, 2020, which contained customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may have been prepaid by the Company at any time prior to maturity, with no prepayment penalties. In April 2021, the Company received proceeds from another loan in the amount of $492,375 from SVB, as lender, pursuant to the PPP of the CARES Act. The loan originally matured on April 15, 2026 and bore interest at a rate of 1.0% per annum. The loan was evidenced by a promissory note dated April 15, 2021, which contained customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may have been prepaid by the Company at any time prior to maturity, with no prepayment penalties. The application for these funds required the Company to certify in good faith that the then-current economic uncertainty made the loan requests necessary to support the ongoing operations of the Company. This certification further required the Company to take into account its current business activity and its ability to access other sources of liquidity sufficient to support ongoing operations in a manner that was not significantly detrimental to the business. The Company made this good faith assertion based upon various factors, including the degree of uncertainty introduced to the capital markets as a result of the COVID-19 All or a portion of the loans may have been forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness was available for the sum of eligible and documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. If, despite the Company’s good-faith belief that given the circumstances the Company satisfied all eligibility requirements for the loans, the Company was later determined to have violated any applicable laws or regulations or it is otherwise determined that the Company was ineligible to receive the loans, the Company may have been required to repay the loans in their entirety and/or be subject to additional penalties. In the event the loans, or any portion thereof, were forgiven pursuant to the PPP, the amounts forgiven would be applied to outstanding principal. The Company used all proceeds from the loans to retain employees, maintain payroll and make lease, rent and utility payments. Under the terms of the loans, the Company may have been eligible for full or partial loan forgiveness. The Company applied for forgiveness on the loan dated April 20, 2020 and the loan plus accrued interest was forgiven in full on April 30, 2021. The Company applied for forgiveness on the loan dated April 15, 2021 and the loan plus accrued interest was forgiven in full on October 5, 2021. The Company recorded a gain on extinguishment of debt in the amount of $866,332 for the forgiveness of the loans plus accrued interest. The Company has accounted for the loans as a debt instrument in accordance with ASC 470, Debt. At December 31, 2022 and 2021, there was no amount outstanding under these loans. Related Party Loan In May 2021, the Company received proceeds from a loan in the amount of approximately $750,000 from its chairman and founding chief executive officer. The loan, which was scheduled to mature on May 31, 2022, bears interest at a rate of 1.0% per annum. The loan is evidenced by a promissory note dated May 28, 2021, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. In August 2021, the Company received proceeds from a loan in the amount of approximately $750,000 from its chairman and founding chief executive officer. The loan, which was scheduled to mature on July 31, 2022, bears interest at a rate of 1.0% per annum. The loan is evidenced by a promissory note dated August 6, 2021, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. In January 2022, the Company entered into an employment agreement with its chairman and founding chief executive officer. As part of the agreement, the Company agreed to repay $0.5 million of the $1.5 million outstanding under the related party loan upon closing of the Ignyte transaction. The remaining $1.0 million plus accrued interest will be repaid pursuant to the discretion of the Company’s Board of Directors. The Company repaid $150,000 of the loan in December 2022. At December 31, 2022, there was $1.35 million outstanding under this loan. In April 2022, the Company entered into an agreement with its founder and director, in consideration of the repayment to be made by the Company’s founder and director to settle a contractual obligation for the upfront payment received by the Company associated with the License Agreement with Venn. Per the agreement, the Company agreed to repay its founder and director $400,000, with interest to accrue on the unpaid principal balance at the rate of 1% per annum. The timing of the repayment will be determined and pursuant to the discretion of the Company’s Board of Directors. In May 2022, the Company’s founder and director repaid to Venn the $400,000 upfront payment and the License Agreement was terminated. At December 31, 2022, the Company recorded a liability to related party loans of $400,000 related to this payment. In May 2022, the Company received proceeds from a loan in the amount of approximately $23,000 from an employee of the Company to settle certain payables of the Company. The loan accrued interest at 4% per annum and was repaid in December 2022. In September 2022, the Company received proceeds from a loan in the amount of $500,000 from one of its director nominees. The loan matured on the second anniversary and bear interest at a rate of 5.0% per annum. The loan was evidenced by a promissory note, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity without the consent of the lender. In November 2022, the related party loan entered into in September 2022 was amended resulting in the outstanding principal and accrued interest under the related party loan converting at a price of $10.00 per share into 50,273 shares of common stock along with a warrant to purchase 46,754 shares of common stock with an exercise price of $0.01 per share. In November 2022, upon consummation of the Business Combination, the Company assumed a promissory note of $211,643 with Ignyte Sponsor LLC. The principal balance of the note was payable in cash upon consummation of the Business Combination. No interest shall accrue on the unpaid principal balance of the Note. In May 2023, this promissory note was forgiven. Long-term Convertible Notes Payable From July through September 2022, the Company received proceeds from loans in the amount of $1.25 million from several lenders. The loans mature on the second anniversary and bear interest at a rate of 5.0% per annum. The loans were evidenced by promissory notes, which contain customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loans may not be prepaid by the Company at any time prior to maturity without the consent of the lender. The Company will provide for the conversion of the principal and interest of the loans into shares of common stock at fair market value and 25% warrant coverage on common stock prior to the consummation of the Business Combination. Warrant coverage is conditioned on closing of the Business Combination and will be exercisable after the closing of the Business Combination with an exercise price of $0.01. Upon issuance, the Company elected the fair value option to account for the promissory notes, including the component related to accrued interest. At December 31, 2022, the fair value of the promissory notes was $0. We recognized a $1.2 million loss in the consolidated statements of operations and comprehensive loss as fair value adjustments on convertible notes with respect to changes to the fair value of the promissory notes for the year ended December 31, 2022. In November 2022, the Company amended the terms to provide warrant coverage on the conversion of the loans from 25% to 93% warrant coverage on common stock. The outstanding principal and accrued interest under the promissory notes converted at a price of $10.00 per share into 126,306 shares of common stock along with warrants to purchase 117,466 shares of common stock with an exercise price of $0.01 per share. On November 1, 2022, the Company issued a $1,512,500 convertible note. The convertible note accrues interest at a rate of 8% per annum and is payable on October 31, 2023, provided however that the Company agrees to make mandatory prepayments on this note (which shall first be applied to accrued interest and then to principal) from time to time in amounts equal to 15% of the gross proceeds received by the Company from any equity lines, forward purchase agreements or other equity financings consummated by Company prior to the maturity date. On the maturity date, the note holder may, in its sole and absolute discretion, convert all or part of the principal and/or accrued interest of this convertible note into shares of common stock of the Company at a per share conversion price equal to 90% of the volume weighted average price of a share of common stock of the Company for the five trading days Insurance Financing Payable The Company obtained financing for certain Director & Officer liability insurance policy premiums. The agreement assigns First Insurance Funding (Lender) a first The total premiums, taxes and fees financed is approximately $1,006,342 with an annual interest rate of 7.20%. In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker, the Company unconditionally promises to pay Lender the amount Financed plus interest and other charges permitted under the Agreement. At December 31, 2022 and 2021 the Company recognized approximately $921,576 and $0, respectively, as an insurance financing note payable in its consolidated balance sheets. The Company will pay the insurance financing through monthly installment payments through August 1 , |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 1) Income Taxes For interim financial reporting, the Company estimates its annual effective tax rate based on the projected income for its entire fiscal year and records a provision (benefit) for income taxes on a quarterly basis based on the estimated annual effective income tax rate. The Com pan | 14. Income Taxes The components of (loss) income before income taxes are as follows: Year Ended December 31, 2022 2021 Domestic (10,222,781 ) $ 978,993 Foreign (2,939,936 ) (9,189,502 ) Total (13,162,717 ) $ (8,210,509 ) Year Ended December 31, Components of Tax Expense 2022 2021 Current — Federal $ 3,000 $ 16,761 Current — State (42,000 ) 66,306 Total current (39,000 ) 83,067 Deferred — Federal $ (1,984,000 ) $ (1,000 ) Deferred — State (639,000 ) — Deferred — Foreign (1,603,000 ) — Change in Valuation Allowance 4,191,000 — Total deferred (35,000 ) (1,000 ) (Benefit from) provision for income taxes $ (74,000 ) $ 82,067 Effective income tax rate 0.56 % (1.01 )% The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate for the years ended December 31, 2022 and 2021 as follows: Year Ended December 31, 2022 2021 Tax computed at federal statutory rate 21.00 % 21.00 % State Tax Provision/(Benefit) net of federal benefit 4.86 % (0.73 )% Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate 0.36 % 4.43 % Permanent differences (1.91 )% 2.19 % Return to Provision 8.83 % — % Foreign tax credits — % 2.16 % Change in valuation allowance (31.84 )% (30.06 )% Warrants issued on conversion (0.74 )% — % Income Tax Provision/(Benefit) 0.56 % (1.01 )% The effective income tax rate is based upon the income for the year, the composition of the income in Korea, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits or other tax contingencies. The corporate income tax rate in Korea is more than our income tax rate in the United States. Our effective tax rate for the fiscal years 2022 and 2021 differed from the U.S. Federal statutory rate of 21.0% primarily due to our composition of Korean earnings. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Significant components of deferred tax assets (liabilities) at December 31, 2022 and 2021 are as follows: December 31, 2022 2021 Deferred tax assets Federal Net Operating Loss 964,000 $ 9,000 State Net Operating Loss 297,000 — Foreign Net Operating Loss 24,965,000 27,414,000 Foreign Tax Credits 379,000 428,000 Foreign Accruals 936,000 — Accruals 615,000 43,000 Capitalized Start up Costs 209,000 — Capitalized Section 174 R&D 437,000 — Right of Use Operating Lease ASC 842 1,183,000 — Total deferred tax assets 29,985,000 27,894,000 Deferred tax liabilities Right of Use Operating Lease ASC 842 (1,030,000 ) — Depreciation (88,000 ) (87,000 ) Total deferred tax liabilities (1,118,000 ) (87,000 ) Total net deferred tax assets 28,867,000 27,807,000 Less: valuation allowance (28,867,000 ) (27,842,000 ) Net deferred tax assets — $ (35,000 ) Deferred income taxes reflect future tax effects of temporary differences between the tax and financial reporting basis of the Corporation’s assets and liabilities measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will affect taxable income. When necessary, deferred tax assets are reduced by a valuation allowance, if based on the weight of available positive and negative evidence, it is more likely than not that some portion or all the deferred tax assets will not be realized. As of December 31, 2022 and 2021, the Company has $28.9 million and $27.8 million, respectively, in valuation allowance against its deferred tax assets. The Company decreased its valuation allowance by $3.2 million due to currency fluctuations on foreign net operating losses. At December 31, 2022, the Company has U.S net operating losses (“NOL”) carryforwards of $4.6 million, with an indefinite carryforward, state NOL carryforwards of $4.3 million and Korean NOL carryforwards of $99.9 million which will expire at various dates beginning in 2025. The Korean NOLs are historical NOLs generated in years prior to the acquisition that stay with the corporate entity. NOLs generated prior to 2020 have a 10 year carryover, and NOLs generated in years 2020 and later have a 15 year carryforward. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change pre-change “5-percent As of December 31, 2022, we have not provided taxes on undistributed earnings of our foreign subsidiaries, which may be subject to foreign withholding taxes upon repatriation, as we consider these earnings indefinitely reinvested. Our indefinite reinvestment determination is based on the future operational and capital requirements of our domestic and foreign operations. We expect our international cash and cash equivalents and marketable securities will continue to be used for our foreign operations and therefore do not anticipate repatriating these funds. As of December 31, 2022, it is not practical to calculate the unrecognized deferred tax liability on these earnings due to the complexities of the utilization of foreign tax credits and other tax assets. Uncertain Tax Positions ASC 740 prescribes the accounting for uncertainty in income taxes recognized in the financial statements. We regularly assess the outcome of potential examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. We recognize tax benefits from uncertain tax positions only if it more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit which is more likely than not to be realized upon ultimate settlement. As of December 31, 2022 the company has no uncertain tax positions. The Company files income tax returns in the U.S., Korea and various state jurisdictions. The Company is not currently under audit for the open years 2019 2022 2017 through 2022 |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 14. Subsequent Events The Company has concluded that no subsequent events have occurred that require disclosure, except for those referenced below and as disclosed in Note 10 and Note 12 to the condensed consolidated financial statements. Debt In April 2023, the Company entered into separate subscription agreements (the “2023 Convertible Note and Warrant Subscription Agreements”) for the purchase of convertible promissory notes in the aggregate principal amount of $2,195,034 (the “2023 Convertible Notes”) and an aggregate amount of 3,658,390 warrants (the “Warrants”). The 2023 Convertible Notes will be convertible into shares of our common stock at $0.60 per share. For each share into which a 2023 Convertible Note is convertible, the investor received Warrants to purchase an equal amount of shares of our common stock at $0.60 per share. In connection with the issuance of the Convertible Notes and the Warrants, in consideration for its services in respect of the financing described above, the Company also issued to Paulson Investment Company, LLC (the “Placement Agent”) a Purchase Warrant (the “Placement Agent Warrant”) to purchase 209,670 shares of the Company’s common stock at a price per share of $0.60. The Placement Agent Warrant has a 5-year In April 2023, the Company entered into a subscription agreement with its founder and director to settle $1,130,775 in related party loans made to the Company. The Company issued a $1,130,775 related party unsecured convertible promissory note and warrants to purchase 1,884,625 shares of common stock at $0.60 per share. Departure of Directors; Appointment of New Audit Committee Chair On March 14, 2023, Brad Stevens notified the Company of his resignation from the Company’s Board of Directors (the “Board”), effective immediately. On June 21, 2023, Nevan Elam notified the Company of his resignation from the Company’s Board, effective immediately. On June 22, 2023, the Board appointed Jim Neal as the chair of the Audit Committee and the Board appointed David Rosenberg as a member of the Audit Committee. Issuance of Unregistered Securities As previously disclosed, in April 2023 the Company issued to its founder and director warrants to purchase 1,884,625 shares of the Company’s common stock with an exercise price of $0.60 per share. On June 23, 2023, the Company’s founder and director exercised warrants to purchase 666,667 shares of the Company’s common stock at $0.60 per share for a total purchase price of $400,000. On July 20, 2023, our founder and director also exercised warrants to purchase 458,333 share of our common stock at $0.60 per shares for a total purchase price of $275,000. | 15. Subsequent Events We have concluded that no subsequent events have occurred that require disclosure, except for those referenced below and as disclosed in Note 11 and Note 13 to the consolidated financial statements. Leases In October 2021, the Company entered into a lease for laboratory and office facilities in Palo Alto, California that expires in April 2027. In March 2023, the Company vacated the premises and returned possession of the premises to the landlord in April 2023. The Company is still responsible for the outstanding payments under the lease. Debt In March 2023, the Company received proceeds from a loan in the amount of $250,000 from its founder and director. The loan matures on December 31, 2023 and bear interest at a rate of 5.0% per annum. The loan was evidenced by a promissory note, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity without the consent of the lender. In April 2023, the Company entered into separate subscription agreements (the “2023 Convertible Note and Warrant Subscription Agreements”) for the purchase of convertible promissory notes in the aggregate principal amount of $2,195,034 (the “2023 Convertible Notes”) and an aggregate amount of 3,658,390 warrants (the “Warrants”). The 2023 Convertible Notes will be convertible into shares of our common stock at $0.60 per share. For each share into which a 2023 Convertible Note is convertible, the investor received Warrants to purchase an equal amount of shares of our common stock at $0.60 per share. In connection with the issuance of the Convertible Notes and the Warrants, in consideration for its services in respect of the financing described above, the Company also issued to Paulson Investment Company, LLC (the “Placement Agent”) a Purchase Warrant (the “Placement Agent Warrant”) to purchase 209,670 shares of the Company’s common stock at a price per share of $0.60. The Placement Agent Warrant has a 5-year In April 2023, the Company entered into a subscription agreement with its founder and director to settle $1,130,775 in related party loans made to the Company. The Company issued a $1,130,775 related party unsecured convertible promissory note and warrants to purchase 1,884,625 shares of common stock at $0.60 per share. Departure of Directors; Appointment of New Audit Committee Chair On March 14, 2023, Brad Stevens notified the Company of his resignation from the Company’s Board of Directors (the “Board”), effective immediately. On June 21, 2023, Nevan Elam notified the Company of his resignation from the Company’s Board, effective immediately. On June 22, 2023, the Board appointed Jim Neal as the chair of the Audit Committee and the Board appointed David Rosenberg as a member of the Audit Committee. Issuance of Unregistered Securities As previously disclosed, in April 2023 the Company issued to its founder and director warrants to purchase 1,884,625 shares of the Company’s common stock with an exercise price of $0.60 per share. On June 23, 2023, the Company’s founder and director exercised warrants to purchase 666,667 shares of the Company’s common stock at $0.60 per share for a total purchase price of $400,000. On July 20, 2023, our founder and director also exercised warrants to purchase 458,333 share of our common stock at $0.60 per shares for a total purchase price of $275,000. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Unaudited Financial Information | Unaudited Financial Information The Company’s unaudited condensed consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. In the Company’s opinion, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2022. | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“ U.S. GAAP Basis of Presentation Prior to April 1, 2022 These consolidated financial statements were extracted from the accounting records of pH Pharma Ltd. on a carve-out carve-out PHP-303 PH-1 Basis of Presentation After April 1, 2022 The Spin-Off PHP-303 PH-1 PHP-303 PH-1 PHP-303 PH-1 Spin-Off As of April 1, 2022, as a result of the Spin-Off, carve-out Basis of Presentation After Consummation of Business Combination Agreement The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, Ignyte is treated as the “acquired” company and Peak Bio Co., Ltd. is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Peak Bio issuing stock for the net assets of Ignyte, accompanied by a recapitalization. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Peak Bio. At the closing date, and subject to the terms and conditions of the Business Combination Agreement, each share of Peak Bio’s common stock, par value $0.0001 per share, was converted into Common Stock equal to 2.0719 (the “Exchange Ratio”). The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the Exchange Ratio established in the Business Combination. | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“ U.S. GAAP Basis of Presentation Prior to April 1, 2022 These consolidated financial statements were extracted from the accounting records of pH Pharma Ltd. on a carve-out The accompanying carve-out PHP-303 PH-1 carve-out • Cash provided by pH Pharma Ltd to fund operations. pH Pharma Ltd uses a centralized approach to cash management and financing of its operations. Accordingly, only the cash, cash equivalents and restricted cash residing in pH Pharma, Inc., a 100% owned U.S. subsidiary of pH Pharma Ltd, has been reflected in these carve-out • Other assets and liabilities at pH Pharma Ltd which are not directly related to, or are not specifically owned by, or are not commitments, of the Company, including fixed assets and leases shared by the Company with other businesses of pH Pharma Ltd. • Most of the pH Pharma Ltd’ third-party debt and the related interest expense have not been allocated to these carve-out carve-out PPP Debt The majority of the Company’s operating expenses related to research and development (“R&D”). R&D expenses directly related to the Company were entirely attributed to the Company in the accompanying carve-out PHP-303 PH-1 PHP-303 PH-1 non-R&D The Company believes the assumptions and allocations underlying the carve-out Basis of Presentation After April 1, 2022 The Spin-Off PHP-303 PH-1 PHP-303 PH-1 PHP-303 PH-1 Spin-Off As of April , , as a result of the Spin-Off, the Company concluded that all the assets and liabilities of the newly created Peak Bio legal entity were contributed by the parent company pH Pharma Ltd. No other assets or liabilities were considered to be attributable to Peak Bio or that would be transferred to Peak Bio upon the completion of the Business Combination, eliminating the necessity to allocate a portion of pH Pharma Ltd.’s assets and liabilities to Peak Bio on a carve-out basis. Therefore, there was no longer a need to allocate assets and liabilities, as well as expenses, from the parent company for the consolidated financial statements. The accompanying financial statements have been prepared in conformity with U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP, as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. The Company’s consolidated financial statements for the year ended December 31, 2022 include the accounts of Peak Bio Co., Ltd. and its subsidiary, Peak Bio CA., Inc. All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation After Consummation of Business Combination Agreement The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, Ignyte is treated as the “acquired” company and Peak Bio is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Peak Bio issuing stock for the net assets of Ignyte, accompanied by a recapitalization. The net assets of Ignyte are stated at historical cost, with no goodwill or other intangible assets recorded. Peak Bio was determined to be the accounting acquirer based on the following predominant factors: • Peak Bio’s shareholders have the largest portion of voting rights in the Company; • the Board and Management are primarily composed of individuals associated with Peak Bio; • the operations of Peak Bio comprise the ongoing operations of the Company. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Peak Bio. At the closing date, and subject to the terms and conditions of the Business Combination Agreement, each share of Peak Bio’s common stock, par value $0.0001 per share, was converted into Common Stock equal to 2.0719 (the “Exchange Ratio”). The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the Exchange Ratio established in the Business Combination. |
Segment Information | Segment Information The Company currently operates in one business segment focused on the discovery and development of innovative therapies for multiple therapeutic areas. The Company is not organized by market and is managed and operated as one business. The Company does not operate any separate lines of business or separate business entities with respect to its programs. Accordingly, the Company does not accumulate discrete financial information with respect to separate service lines, and thus there is one reporting unit. | |
Use of Estimates | Use of Estimates The preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. Itis at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Actual results could differ from those estimates. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions, are used for, but not limited to, include stock-based compensation, derivative instruments, hybrid instruments, warrants, the valuation of pH Pharma Ltd common stock and the allocation of certain pH Pharma Ltd expenses in the consolidated financial statements. Additionally, the Company assessed the impact the COVID-19 COVID-19 COVID-19. COVID-19. COVID-19. |
Fair Value Measurements | Fair Value Measurements The Company records certain liability balances under the fair value measurements as defined by the Financial Accounting Standards Board (“ FASB Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at measurement date. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. | |
Cash and cash equivalents | Cash and cash equivalents Cash equivalents include short-term, highly liquid instruments, consisting of money market accounts in the U.S. | |
Restricted Cash | Restricted Cash The Company has a lease agreement for the premises it occupies in Palo Alto, California. A secured letter of credit in lieu of a lease deposit totaling $177,000 is secured by restricted cash in the same amount at December 31, 2022 and 2021. The secured letter of credit will remain in place for the life of the related lease, expiring in March 2027 (see Note 8, Commitments and Contingencies | |
Currency and currency translation | Currency and currency translation The consolidated financial statements are presented in U.S. dollars, the Company’s reporting currency. The functional currency of Peak Bio CA, Inc. is the U.S. dollar. The functional currency of Peak Bio Co., Ltd is the Korean Won. Adjustments that arise from exchange rate changes on transactions of each group entity denominated in a currency other than the functional currency are included in other income and expense in the consolidated statements of operations. Assets and liabilities of Peak Bio Co., Ltd are recorded in their Korean Won functional currency and translated into the U.S. dollar reporting currency of the Company at the exchange rate on the balance sheet date. Revenue, when recorded, and expenses of Peak Bio Co., Ltd are recorded in their Korean Won functional currency and translated into the U.S. dollar reporting currency of the Company at the average exchange rate prevailing during the reporting period. Resulting translation adjustments are recorded to other comprehensive income (loss). | |
Concentration of credit risk | Concentration of credit risk The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts in the U.S., the balances of which, at times, may exceed federally insured limits. The Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. Exposure to credit risk is reduced by placing such deposits in high credit quality federally insured financial institutions. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the years ended December 31, 2022 and 2021. The Company received all of its total revenue through a grant from a government organization during the years ended December 31, 2022 and 2021. | |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated over the estimated useful lives of the respective assets, which range from two to five years, or the lesser of the related initial term of the lease or useful life for leasehold improvements. The initial cost of property and equipment consists of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the assets have been put into operation, such as repairs and maintenance, are charged to expense in the period in which the costs are incurred. Major replacements, improvements, and additions are capitalized in accordance with Company policy. | |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value would be assessed using discounted cash flows or other appropriate measures of fair value. The Company did not recognize any impairment losses for the years ended December 31, 2022 and 2021. | |
Derivative Instruments | Derivative Instruments ASC 815, Derivatives and Hedging Activities (“ASC 815”) requires companies to bifurcate certain conversion options and redemption features from their host instruments and account for them as free-standing derivative financial instruments should certain criteria be met. The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates all of its financial instruments, including notes payable and other derivative liabilities, to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s consolidated balance sheet. | |
Hybrid Instruments | Hybrid Instruments The Company also follows ASC 480-10, 480-10”) | |
Warrants | Warrants The Company accounts for the Public Warrants and Private Warrants (as defined in Note 11) collectively (“Warrants”), as either equity or liability-classified instruments based on an assessment of the specific terms of the Warrants and the applicable authoritative guidance in FASB Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the Warrants meet all of the requirements for equity classification under ASC 815, including whether the Warrants are indexed to the Company’s own common stocks and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period end date while the Warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, such warrants are required to be recorded as a component of additional paid-in non-cash The Company accounts for the Private Warrants in accordance with ASC 815-40 The Company evaluated the Public Warrants in accordance with ASC 815-40, paid-in | |
Revenue recognition | Revenue recognition The Company’s revenue is primarily generated through grants from government organizations. The Company recognizes revenue from these contracts during the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grant are met. The Company concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit | |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs related to personnel, including salaries and other personnel related expenses, contract manufacturing and supply, consulting fees, and the cost of facilities and support services used in drug development. Assets acquired that are used for research and development and have no future alternative use are expensed as in-process | |
General and Administrative Costs | General and Administrative Costs General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, business development, legal, human resources and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance. | |
Share-based Compensation | Share-based Compensation The Company accounts for stock options granted in accordance with ASC 718, Compensation-Stock Compensation, or ASC 718. In accordance with ASC 718, compensation expense is measured at the estimated fair value of the stock options at grant date and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award. Stock-based compensation expense represents the cost of the grant date fair value of employee stock awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur. Equity-based compensation expense is classified in the statement of operations in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified. Prior to the Business Combination, there had been no public market of the Company’s common stock. Therefore, the grant date fair value of the Company’s common stock was determined by the Company’s board of directors with the assistance of management and a third-party valuation specialist (see “Common stock valuations”). Subsequent to the Business Combination, the Company now determines the fair value of common stock based on the closing market price on the date of grant. | |
Determination of the Fair Value of Convertible Notes | Determination of the Fair Value of Convertible Notes The Company has elected the fair value option in accordance with ASC 825, Financial Instruments, for the accounting for the convertible promissory notes issued in 2022. Fair value adjustments to the convertible notes are included in other income (expenses) in the consolidated statements of operations and comprehensive loss. • The fair value of the initial closing of our convertible promissory notes in 2022 was determined to be equal to the proceeds of $1.25 million on issuance. • The fair value of the convertible promissory notes as of October 31, 2022, just prior to closing the Business Combination Agreement, was determined based on the transaction price of $10.00 per share. | |
Net Loss Per Share | Net Loss Per Share The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per common share after giving consideration to all potentially dilutive common shares, including options to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential common shares have been anti-dilutive and basic and diluted loss per share have been the same. The following table sets forth the potentially dilutive securities that have been excluded from the March 31, December 31 Stock options to purchase common stock 1,750,967 1,750,967 Warrants to purchase common stock 5,867,045 5,867,045 | Net Loss Per Share As a result of the Spin-Off, Spin-Off. The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per common share after giving consideration to all potentially dilutive common shares, including options to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): December 31, 2022 2021 Stock options to purchase common stock 1,750,967 657,000 |
Income Taxes | Income Taxes Deferred income taxes reflect future tax effects of temporary differences between the tax and financial reporting basis of the Company’s assets and liabilities measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will affect taxable income. When necessary, deferred tax assets are reduced by a valuation allowance, to reflect realizable value, and all deferred tax balances are reported as long-term on the balance sheet. Accruals are maintained for uncertain tax positions, as necessary. The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The Corporation has elected to treat interest and penalties related to income taxes, to the extent they arise, as a component of income taxes. ASC 740 prescribes the accounting for uncertainty in income taxes recognized in the financial statements. The Company regularly assesses the outcome of potential examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit which is more likely than not to be realized upon ultimate settlement. As of December 31, 2022 and 2021, the Company had no uncertain tax positions. | |
Common stock valuations | Common stock valuations Prior to the Business Combination, the Company is required to periodically estimate the fair value of pH Pharma Ltd.’s common stock with the assistance of an independent third-party valuation firm when issuing stock options and computing the estimated stock-based compensation expense. The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of significant levels of management judgment. In order to determine the fair value of pH Pharma Ltd.’s common stock, the Company considered, among other items, previous transactions involving the sale of pH Pharma Ltd.’s securities, the pH Pharma Ltd.’s business, financial condition and results of operations, economic and industry trends, the market performance of comparable publicly traded companies, and the lack of marketability of pH Pharma Ltd.’s common stock. Valuations are updated when facts and circumstances indicate that the most recent valuation is no longer valid, such as changes in the stage of development efforts, various exit strategies and their timing, and other scientific developments that could be related to the Company’s valuation, or, at a minimum, annually. Third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. | |
Recently Adopted and Issued Accounting Standards | Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, 2016-13”). 2016-13 2016-13 2019-04, 2016-13. No. 2016-13 In August 2020, the FASB issued ASU 2020-06, 470-20) 815-40): 2020-06”), 2020-06 2020-06 2020-06 Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. | Recently Adopted Accounting Standards Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, right-of-use right-of-use The Company has adopted the standard effective January 1, 2022 and has chosen to use the effective date as our date of initial application. Prior to January 1, 2022, the Company accounted for leases under ASC 840, “Accounting for Leases”. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods prior to January 1, 2022. The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the ‘package of practical expedients’ which allow us to not reassess (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply (i) the practical expedient which allows us to not separate lease and non-lease At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right-of-use utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As of the ASC 842 effective date, the Company’s incremental borrowing rate is approximately 10.0% based on the remaining lease term of the applicable leases. The Company has elected to combine lease and non-lease non-current. Income Taxes In December 2019, the FASB issued ASU 2019-12, 2019-12”). 2019-12 No. 2019-12 Grant Revenue In November 2021, the FASB issued ASU 2021-10, 2021-10 Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, 2016-13”). 2016-13 2016-13 2019-04, 2016-13. In August 2020, the FASB issued ASU 2020-06, 470-20) 815-40): 2020-06”), 2020-06 2020-06 December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the potential impact of adopting ASU 2020-06 on its financial statements and financial statement disclosures. |
Description of the Business (Ta
Description of the Business (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of number of shares of common stock issued immediately following the consummation of the Business Combination | The following table details the number of shares of common stock issued immediately following the consummation of the Business Combination: Shares Common stock redeemable and outstanding prior to business combination 5,750,000 Less: redemption of Ignyte shares (5,159,287 ) Common stock of Ignyte 590,713 Ignyte founder shares 1,537,500 Shares issued for services and debt settlement 106,150 Total Ignyte shares 2,234,363 Peak Bio shareholders 17,295,044 Total shares of common stock immediately after business combination 19,529,407 |
Schedule of reconciliation of cash flows related to Business Combination | The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows for the year ended December 31, 2022: Recapitalization Cash — Ignyte trust and cash, net of redemptions and PIPE proceeds $ 13,766 Plus: restricted cash — Forward Share Purchase Agreement 4,551,750 Less: cash transaction costs allocated to the Company’s equity (655,141 ) Total $ 3,910,375 |
Schedule of reconciliation of changes in stockholders' equity (deficit) related to Business combination | The following table reconciles the elements of the Business Combination to the consolidated statement of changes in stockholders’ equity (deficit) for the year ended December 31, 2022: Recapitalization Cash — Ignyte trust and cash, net of redemptions and PIPE proceeds $ 13,766 Plus: restricted cash — Forward Share Purchase Agreement 4,551,750 Less: fair value of private warrants (450,000 ) Less: derivative liability on Forward Share Purchase Agreement (80,110 ) Less: transaction costs allocated to the Company’s equity (3,907,245 ) Total $ 128,161 |
Schedule of recognized identified assets acquired and liabilities assumed | The following table details the allocated assets acquired and liabilities assumed as follows: Assets Acquired Cash — Ignyte trust and cash, net of redemptions $ 3,538,766 Plus: restricted cash — Forward Share Purchase Agreement 4,551,750 Other assets 692,487 Assets acquired 8,783,003 Liabilities Assumed Fair value of private warrants 450,000 Derivative liability on Forward Share Purchase Agreement 80,110 Other liabilities and accrued expenses 3,944,592 Liabilities assumed 4,474,702 Net assets acquired $ 4,308,301 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Schedule of Dilutive Securities Excluded from Calculation of Net Loss Per Share | The following table sets forth the potentially dilutive securities that have been excluded from the March 31, December 31 Stock options to purchase common stock 1,750,967 1,750,967 Warrants to purchase common stock 5,867,045 5,867,045 | The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): December 31, 2022 2021 Stock options to purchase common stock 1,750,967 657,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Summary of Property Plant and Equipment | Property and equipment consist of the following: March 31, December 31 Lab equipment $ 682,209 $ 682,209 Leasehold improvements 41,578 41,578 Computer and office equipment 25,380 120,774 Computer software 3,725 3,725 Gross property and equipment $ 752,892 $ 848,286 Less: accumulated depreciation (497,148 ) (471,638 ) Net property and equipment $ 255,744 $ 376,648 | Property and equipment consist of the following: December 31, 2022 2021 Lab equipment $ 682,209 $ 682,209 Leasehold improvements 41,578 8,519 Computer and office equipment 120,774 11,584 Computer software 3,725 3,725 Gross property and equipment $ 848,286 $ 706,037 Less: accumulated depreciation (471,638 ) (325,427 ) Net property and equipment $ 376,648 $ 380,610 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | ||
Schedule of Accrued Expenses | Accrued expenses consist of the following: March 31, December 31 Professional fees $ — $ 608,846 Employee compensation costs 2,150,126 1,364,142 Other liabilities 48,442 65,303 Total accrued expenses and other current liabilities $ 2,198,568 $ 2,038,291 | Accrued expenses consist of the following: December 31, 2022 2021 Contract research and development costs $ — $ 486,795 Professional Fees 608,846 — Employee compensation costs 1,364,142 157,248 Income tax — 107,474 Other liabilities 65,303 238,968 Total accrued expenses and other current liabilities $ 2,038,291 $ 990,485 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Summary of stock option activity | The following table summarizes the stock option activity: Number of Weighted- Weighted average (in years) Aggregate Outstanding at December 31, 2022 1,750,967 $ 5.36 2.9 $ 486,097 Granted — $ — Cancelled/Forfeited — $ — Exercised — $ — Outstanding at March 31, 2023 1,750,967 $ 5.36 2.8 $ 47,326 Exercisable at March 31, 2023 1,504,821 $ 4.93 2.3 $ 47,326 | The following table summarizes the stock option activity: Number of Options Weighted- Weighted average Aggregate Outstanding at December 31, 2021 657,000 $ 5.04 4.1 $ — Granted 135,000 $ 8.05 Allocation of stock options in spin-off (77,000 ) $ 5.40 Cancelled/Forfeited (31,700 ) $ 8.05 Allocation of stock options in business combination 1,067,667 $ 5.36 Outstanding at December 31, 2022 1,750,967 $ 5.36 2.9 $ 486,097 Exercisable at December 31, 2022 1,504,821 $ 4.93 2.3 $ 486,097 |
Schedule of Share-Based Compensation Expense | The following table summarizes information related to share-based compensation expense recognized in the condensed consolidated statements of operations and comprehensive loss related to the equity awards: Three Months Ended March 31, 2023 2022 Research and development $ 102,488 $ 95,657 General and administrative 62,519 12,357 Total equity-based compensation $ 165,007 $ 108,014 | The following table summarizes information related to share-based compensation expense recognized in the statements of operations and comprehensive loss related to the equity awards: Year Ended December 31, 2022 2021 Research and development $ 380,631 $ — General and administrative 179,429 4,890 Total equity-based compensation $ 560,060 $ 4,890 |
Schedule of Fair Value of Share-based Awards Measured with Weighted-Average Assumptions | The fair value of the stock options is estimated on the date of grant and modification using a Black-Scholes option pricing model with the following weighted average assumptions: Three Months Ended March 31, 2023 2022 Expected volatility 79.3 % 75.1 % Risk-free interest rate 4.66 % 1.81 % Expected term (in years) 1.0 7.0 Expected dividend yield 0 % 0 % | The fair value of the stock options granted is estimated on the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 2022 2021 Expected volatility 75.1 % 76.6 % Risk-free interest rate 1.81 % 1.15 % Expected term (in years) 7.0 7.0 Expected dividend yield 0 % 0 % |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Summary of Fair Value of Convertible Notes Payable Previously Measured at Fair Value Determined by Level 3 Inputs and Warrant Liability Measured at Fair Value on Recurring Basis Determined by Level 1 Inputs | The following table presents a roll-forward of the fair value of the convertible notes payable, derivative liability, derivative asset and warrant liability that will continue to be measured at fair value on a recurring basis for which fair value is determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy as of March 31, 2023. The valuation models used to determine the fair value at each reporting date require management judgment and pricing inputs from observable and unobservable markets, including projected share prices and probabilities of success. Significant deviations from these estimates and inputs could result in a material change in fair value. Convertible Derivative Derivative Warrant Balance at December 31, 2022 $ 1,374,698 $ 166,000 $ 13,000 $ 525,000 Fair value adjustments 40,797 (1,000 ) (13,000 ) (525,000 ) Balance at March 31, 2023 $ 1,415,495 $ 165,000 $ — $ — | The following table presents a roll-forward of the fair value of the convertible notes payable, derivative liability, derivative asset and warrant liability that will continue to be measured at fair value on a recurring basis for which fair value is determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy as of December 31, 2022. The valuation models used to determine the fair value at each reporting date require management judgment and pricing inputs from observable and unobservable markets, including projected share prices and probabilities of success. Significant deviations from these estimates and inputs could result in a material change in fair value. Convertible Derivative Derivative Warrant Balance at December 31, 2021 $ — $ — $ — $ — Issuance of convertible note 2,597,500 165,000 — — Assumption of Forward Purchase Agreement — 68,110 — — Assumption of Key Company Stockholder Forward Purchase Agreement — 12,000 — — Initial Measurement of White Lion Purchase Agreement — 1,900,000 — Assumption of warrant liability in Business Combination — — — 450,000 Change in fair value 1,213,998 (1,979,110 ) 13,000 75,000 Conversion to common stock (2,436,800 ) — — — Balance at December 31, 2022 $ 1,374,698 $ 166,000 $ 13,000 $ 525,000 |
Related Party Transactions an_2
Related Party Transactions and Shared Service Costs (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Schedule of Components of Net Transfers from pH Pharma | The components of the net transfers from pH Pharma Ltd as of March 31, 2023 and 2022 are as follows: Three Months Ended March 31, 2023 2022 Corporate allocations Research and development $ — $ 482,160 Selling, general and administrative — 72,345 Accounts payable and general financing activities — 809,469 Net increase in contributions from member $ — $ 1,363,974 | The components of the net transfers from pH Pharma Ltd as of December 31, 2022 and 2021 are as follows: Year Ended December 31, 2022 2021 Corporate allocations Research and development $ 482,160 $ 2,055,839 Selling, general and administrative 72,345 447,506 Accounts payable and general financing activities 809,469 3,925,492 Net increase in contributions from member $ 1,363,974 $ 6,428,837 |
Leases (Tables)
Leases (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Summary of Quantitative Information Regarding Company's Leases | Quantitative information regarding the Company’s leases for the three months ended March 31, 2023 and 2022 is as follows: Three Months Ended March 31, 2023 2022 Operating cash flows paid for amounts included in the measurement of lease liabilities $ 177,111 $ 141,542 Operating lease liabilities arising from obtaining right of use assets $ — $ 4,189,492 Weighted-average remaining lease terms (years) 4.1 5.0 Weighted-average discount rate 10.0 % 10.0 % | Quantitative information regarding the Company’s leases for the year ended December 31, 2022 is as follows: Operating Lease Operating cash flows paid for amounts included in the measurement of lease liabilities $ 786,563 Operating lease liabilities arising from obtaining right of use assets $ 4,189,492 Weighted-average remaining lease terms (years) 4.3 Weighted-average discount rate 10.0 % |
Summary of Future Lease Payments under Noncancelable Leases | Future lease payments under noncancelable leases are as follows at March 31, 2023: Operating 2023 (remaining nine months) $ 979,745 2024 1,189,454 2025 1,223,029 2026 1,257,612 2027 422,107 Thereafter — Total future minimum lease payments $ 5,071,947 Less: imputed interest (917,000 ) Total future minimum lease payments $ 4,154,947 | Future lease payments under noncancelable leases are as follows at December 31, 2022: Operating Lease 2023 $ 1,156,856 2024 1,189,454 2025 1,223,029 2026 1,257,612 2027 422,107 Thereafter — Total future minimum lease payments $ 5,249,058 Less: imputed interest (1,021,213 ) Total future minimum lease payments $ 4,227,845 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | ||
Summary of Company's Outstanding Warrants | A summary of the Company’s outstanding warrants at March 31, 2023 is as follows: Description Number of Exercise price Expiration Private Placement Warrants 2,500,000 $ 11.50 11/1/2027 Public Warrants 2,875,000 $ 11.50 11/1/2027 Other Warrants 492,045 $ 0.01 11/1/2023 Outstanding Warrants 5,867,045 | A summary of the Company’s outstanding warrants at December 31, 2022 is as follows: Description Number of Warrants Exercise price Expiration Date Private Placement Warrants 2,500,000 $ 11.50 11/1/2027 Public Warrants 2,875,000 $ 11.50 11/1/2027 Other Warrants 492,045 $ 0.01 11/1/2023 Outstanding Warrants 5,867,045 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of (loss) income before income taxes are as follows: Year Ended December 31, 2022 2021 Domestic (10,222,781 ) $ 978,993 Foreign (2,939,936 ) (9,189,502 ) Total (13,162,717 ) $ (8,210,509 ) Year Ended December 31, Components of Tax Expense 2022 2021 Current — Federal $ 3,000 $ 16,761 Current — State (42,000 ) 66,306 Total current (39,000 ) 83,067 Deferred — Federal $ (1,984,000 ) $ (1,000 ) Deferred — State (639,000 ) — Deferred — Foreign (1,603,000 ) — Change in Valuation Allowance 4,191,000 — Total deferred (35,000 ) (1,000 ) (Benefit from) provision for income taxes $ (74,000 ) $ 82,067 Effective income tax rate 0.56 % (1.01 )% |
Schedule of Reconciliation of the Federal Income Tax Effective Rate | The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate for the years ended December 31, 2022 and 2021 as follows: Year Ended December 31, 2022 2021 Tax computed at federal statutory rate 21.00 % 21.00 % State Tax Provision/(Benefit) net of federal benefit 4.86 % (0.73 )% Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate 0.36 % 4.43 % Permanent differences (1.91 )% 2.19 % Return to Provision 8.83 % — % Foreign tax credits — % 2.16 % Change in valuation allowance (31.84 )% (30.06 )% Warrants issued on conversion (0.74 )% — % Income Tax Provision/(Benefit) 0.56 % (1.01 )% |
Schedule of Components of Deferred Tax Assets (Liabilities) | Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Significant components of deferred tax assets (liabilities) at December 31, 2022 and 2021 are as follows: December 31, 2022 2021 Deferred tax assets Federal Net Operating Loss 964,000 $ 9,000 State Net Operating Loss 297,000 — Foreign Net Operating Loss 24,965,000 27,414,000 Foreign Tax Credits 379,000 428,000 Foreign Accruals 936,000 — Accruals 615,000 43,000 Capitalized Start up Costs 209,000 — Capitalized Section 174 R&D 437,000 — Right of Use Operating Lease ASC 842 1,183,000 — Total deferred tax assets 29,985,000 27,894,000 Deferred tax liabilities Right of Use Operating Lease ASC 842 (1,030,000 ) — Depreciation (88,000 ) (87,000 ) Total deferred tax liabilities (1,118,000 ) (87,000 ) Total net deferred tax assets 28,867,000 27,807,000 Less: valuation allowance (28,867,000 ) (27,842,000 ) Net deferred tax assets — $ (35,000 ) |
Description of the Business (De
Description of the Business (Details) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 29, 2022 USD ($) $ / shares shares | Nov. 01, 2022 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jun. 23, 2023 $ / shares | Apr. 30, 2023 $ / shares | May 31, 2022 shares | Apr. 30, 2022 $ / shares | |
Organization and Business Operations (Details) [Line Items] | ||||||||||
Share price per units (in Dollars per share) | $ / shares | $ 10 | $ 10 | ||||||||
Share price (in Dollars per share) | $ / shares | $ 10.115 | $ 10.115 | ||||||||
Stock repurchased during period, shares | 375,939 | 375,939 | ||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.6 | $ 0.6 | |||||
Common Stock, Shares, Issued | 22,126,011 | 21,713,248 | 17,162,742 | 63,856 | ||||||
Stock repurchased and retired during period, shares | 375,939 | 375,939 | ||||||||
Class of warrant or right, term from which warrants or rights exercisable | 1 year | |||||||||
Forward Share Purchase Liability | $ | $ 4,551,750 | |||||||||
Escrow deposit | $ | $ 4,551,750 | 4,551,750 | ||||||||
Escrow deposit disbursements related to property acquisition | $ | 749,127 | $ 749,127 | ||||||||
Common stock convertible exchange ratio | 0.020719 | 0.020719 | 0.020719 | |||||||
Net loss | $ | $ (6,766,834) | $ (2,100,435) | $ (13,088,717) | $ (8,292,576) | ||||||
Investor [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Escrow deposit disbursements related to property acquisition | $ | $ 3,802,623 | $ 3,802,623 | ||||||||
Maximum [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Exercise of Investor's Right to Sell Shares of Common Stock | 450,000 | 450,000 | ||||||||
Peak Bio Company Limited [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.0001 | |||||||||
Common Stock, Shares, Issued | 17,295,044 | |||||||||
New Subscriber [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Share price per units (in Dollars per share) | $ / shares | $ 10 | |||||||||
Share price (in Dollars per share) | $ / shares | $ 0.01 | |||||||||
Less: proceeds from issuance of shares to PIPE subscribers | $ | $ 3,025,000 | |||||||||
Class of warrant or right, term from which warrants or rights exercisable | 1 year | |||||||||
New Subscriber [Member] | PIPE Shares [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Number of sale of units | 302,500 | |||||||||
Bridge Loan PIPE Subscriber [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Share price (in Dollars per share) | $ / shares | $ 0.01 | |||||||||
Aggregate amount (in Dollars) | $ | $ 1,750,000 | |||||||||
Bridge Loan PIPE Subscriber [Member] | PIPE Shares [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Number of sale of units | 176,579 | |||||||||
Original Subscriber [Member] | Original PIPE Shares [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Share price per units (in Dollars per share) | $ / shares | $ 10 | |||||||||
Number of sale of units | 50,000 | |||||||||
Less: proceeds from issuance of shares to PIPE subscribers | $ | $ 500,000 | |||||||||
PIPE Financing Warrants [Member] | New Subscriber [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Number of sale of units | 281,325 | |||||||||
PIPE Warrants [Member] | Bridge Loan PIPE Subscriber [Member] | ||||||||||
Organization and Business Operations (Details) [Line Items] | ||||||||||
Number of sale of units | 164,218 |
Description of the Business - S
Description of the Business - Schedule of Number of Shares of Common Stock Issued Immediately Following the Consummation of the Business Combination (Details) | Dec. 31, 2022 shares |
Accounting Policies [Abstract] | |
Common stock redeemable and outstanding prior to business combination | 5,750,000 |
Less: redemption of Ignyte shares | (5,159,287) |
Common stock of Ignyte | 590,713 |
Ignyte founder shares | 1,537,500 |
Shares issued for services and debt settlement | 106,150 |
Total Ignyte shares | 2,234,363 |
Peak Bio shareholders | 17,295,044 |
Total shares of common stock immediately after business combination | 19,529,407 |
Description of the Business -_2
Description of the Business - Schedule of Reconciliation of Cash Flows Relating BusinessCombination (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Plus: restricted cash - Forward Share Purchase Agreement | $ 4,551,750 | |
Total | 3,910,375 | $ 0 |
Recapitalization | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Cash - Ignyte trust and cash, net of redemptions and PIPE proceeds | 13,766 | |
Plus: restricted cash - Forward Share Purchase Agreement | 4,551,750 | |
Less: cash transaction costs allocated to the Company's equity | (655,141) | |
Total | $ 3,910,375 |
Description of the Business -_3
Description of the Business - Schedule of Reconciliation of Changes in Stockholders Equity Deficit Relating Business Combination (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Plus: restricted cash - Forward Share Purchase Agreement | $ 4,551,750 |
Less: fair value of private warrants | (450,000) |
Less: derivative liability on Forward Share Purchase Agreement | (80,110) |
Recapitalization | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Cash - Ignyte trust and cash, net of redemptions and PIPE proceeds | 13,766 |
Plus: restricted cash - Forward Share Purchase Agreement | 4,551,750 |
Less: fair value of private warrants | (450,000) |
Less: derivative liability on Forward Share Purchase Agreement | 80,110 |
Less: transaction costs allocated to the Company's equity | (3,907,245) |
Total | $ 128,161 |
Description of the Business -_4
Description of the Business - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Assets Acquired | |
Cash - Ignyte Trust and Cash, Net of Redemptions | $ 3,538,766 |
Plus: restricted cash - Forward Share Purchase Agreement | 4,551,750 |
Other assets | 692,487 |
Assets acquired | 8,783,003 |
Liabilities Assumed | |
Fair value of private warrants | 450,000 |
Derivative liability on Forward Share Purchase Agreement | 80,110 |
Other liabilities and accrued expenses | 3,944,592 |
Liabilities assumed | 4,474,702 |
Net assets acquired | $ 4,308,301 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||||||||||
Dec. 31, 2022 USD ($) Segment Employees $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jun. 23, 2023 $ / shares | Apr. 30, 2023 $ / shares | Mar. 31, 2023 $ / shares shares | Nov. 30, 2022 $ / shares | Oct. 31, 2022 $ / shares | May 31, 2022 | Apr. 01, 2022 shares | Mar. 01, 2022 shares | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Percentage of related party loan | 50% | ||||||||||
Federal depository insurance coverage | $ 250,000 | ||||||||||
Short term borrowings | $ 5,600,000 | $ 7,700,000 | |||||||||
Short term debt term | 30 days | ||||||||||
Short term debt interest rate | 0% | ||||||||||
Common stock, shares outstanding | shares | 19,782,747 | 17,162,742 | 20,195,510 | 8,283,613 | |||||||
Stock options | shares | 1,750,967 | 657,000 | 1,750,967 | 693,000 | 693,000 | ||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.6 | $ 0.6 | $ 0.0001 | ||||||
Common stock convertible exchange ratio | 0.020719 | 0.020719 | 0.020719 | ||||||||
Goodwill | $ 0 | ||||||||||
Other intangible assets | 0 | ||||||||||
Secured letter of credit | $ 177,000 | $ 177,000 | |||||||||
Restricted cash collateral for secured letter of credit | 177,000 | ||||||||||
Lease expiration month and year | 2027-03 | ||||||||||
Restricted bank account collateral for credit card | $ 60,000 | 60,000 | |||||||||
Proceeds from issuance of convertible promissory notes | $ 1,250,000 | $ 492,375 | |||||||||
Conversion price per share | $ / shares | $ 0.6 | $ 10 | $ 10 | ||||||||
Incremental borrowing rate | 10% | ||||||||||
Number of operating segment | Segment | 1 | ||||||||||
Number of reporting segment | Segment | 1 | ||||||||||
Convertible Promissory Notes | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Proceeds from issuance of convertible promissory notes | $ 1,250,000 | ||||||||||
Conversion price per share | $ / shares | $ 10 | ||||||||||
Minimum [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Number of employees | Employees | 21 | ||||||||||
Maximum [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Number of employees | Employees | 33 | ||||||||||
pH Pharma, Inc. [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Ownership percentage in subsidiary | 100% | ||||||||||
pH Pharma Co., Ltd | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Percentage of equity outstanding | 90% | ||||||||||
Common stock, shares outstanding | shares | 8,283,613 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Dilutive Securities Excluded from Calculation of Net Loss Per Share (Details) - shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares for outstanding warrants (in Shares) | 1,750,967 | 1,750,967 | 657,000 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares for outstanding warrants (in Shares) | 5,867,045 | 5,867,045 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 752,892 | $ 848,286 | $ 706,037 |
Less: accumulated depreciation | (497,148) | (471,638) | (325,427) |
Net property and equipment | 255,744 | 376,648 | 380,610 |
Lab Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 682,209 | 682,209 | 682,209 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 41,578 | 41,578 | 8,519 |
Computer and Office Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 25,380 | 120,774 | 11,584 |
Computer Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 3,725 | $ 3,725 | $ 3,725 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Allocation of depreciation expense | $ 41,409 | $ 41,109 | $ 151,873 | $ 176,649 |
PH Pharma Co Ltd [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Allocation of depreciation expense | $ 41,409 | $ 41,109 | $ 151,873 | $ 176,649 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 31, 2021 | Oct. 31, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Line Items] | ||||||
Operating lease right-of-use asset | $ 0 | $ 3,681,072 | $ 0 | |||
Lease liability | 4,154,947 | 4,227,845 | ||||
Operating lease liability, current | 4,154,947 | 720,577 | 0 | |||
Operating lease, liability, noncurrent | 0 | 3,507,268 | 0 | |||
Base rent for sublease | 300,000 | $ 300,000 | ||||
Annual escalations | 3% | |||||
Impairment loss on operating lease right-of-use asset | (3,513,999) | $ 0 | ||||
PH Pharma Ltd [Member] | ||||||
Leases [Line Items] | ||||||
Base rent for sublease | 1,200,000 | $ 900,000 | ||||
San Francisco, California [Member] | ||||||
Leases [Line Items] | ||||||
Base rent for sublease | $ 66,000 | |||||
Annual escalations | 3% | |||||
Palo Alto, California [Member] | ||||||
Leases [Line Items] | ||||||
Base rent for sublease | $ 89,000 | |||||
Payments for Tenant Improvements | $ 300,000 | |||||
Interest Percentage of Tenant Improvements | 7% | |||||
Lease expiration period | 2027-04 | |||||
Lessee, operating lease, renewal term | 5 years | |||||
Security Deposit | $ 177,000 | |||||
Impairment loss on operating lease right-of-use asset | (3,500,000) | |||||
ASC 842 [Member] | ||||||
Leases [Line Items] | ||||||
Operating lease right-of-use asset | 4,200,000 | 4,200,000 | ||||
Lease liability | 4,400,000 | 4,400,000 | ||||
Deferred rent liability | $ 241,000 | $ 241,000 |
Leases - Summary of Quantitativ
Leases - Summary of Quantitative Information Regarding Company's Leases (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||||
Operating cash flows paid for amounts included in the measurement of lease liabilities | $ 177,111 | $ 141,542 | $ 786,563 | |
Operating lease liabilities arising from obtaining right of use assets | $ 0 | $ 4,189,492 | $ 4,189,492 | $ 0 |
Weighted-average remaining lease terms (years) | 4 years 1 month 6 days | 5 years | 4 years 3 months 18 days | |
Weighted-average discount rate | 10% | 10% | 10% |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments under Noncancelable Leases (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 (remaining nine months) | $ 979,745 | |
2024/2023 | 1,189,454 | $ 1,156,856 |
2025/2024 | 1,223,029 | 1,189,454 |
2026/2025 | 1,257,612 | 1,223,029 |
2027/2026 | 422,107 | 1,257,612 |
2027 | 422,107 | |
Thereafter | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 5,071,947 | 5,249,058 |
Less: imputed interest | (917,000) | (1,021,213) |
Total future minimum lease payments | $ 4,154,947 | $ 4,227,845 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | |||
Contract research and development costs | $ 0 | $ 486,795 | |
Professional fees | $ 0 | 608,846 | 0 |
Employee compensation costs | 2,150,126 | 1,364,142 | 157,248 |
Income tax | 0 | 107,474 | |
Other liabilities | 48,442 | 65,303 | 238,968 |
Total accrued expenses and other current liabilities | $ 2,198,568 | $ 2,038,291 | $ 990,485 |
Accrued Expenses - Additional I
Accrued Expenses - Additional Information (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Other noncurrent liabilities | $ 230,650 | $ 790,800 | $ 186,570 |
Accrued expenses | $ 2,198,568 | 2,038,291 | $ 990,485 |
Venn License Agreement [Member] | |||
Other noncurrent liabilities | 790,800 | ||
Accrued expenses | 1,095,043 | ||
Unpaid compensation | $ 1,885,843 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 01, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share based combensation expense | $ 165,007 | $ 108,014 | $ 560,060 | $ 4,890 | ||
Unvested stock-based compensation arrangements | $ 500,000 | $ 600,000 | ||||
Unvested stock-based compensation arrangements weighted average period of recognition | 9 months 18 days | 1 year 3 days | ||||
Stock options | 693,000 | 1,750,967 | 1,750,967 | 657,000 | 693,000 | |
shares, allocation of stock options in spin-off | (77,000) | |||||
PH Pharma Co Ltd [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
shares, allocation of stock options in spin-off | 77,000 | |||||
Stock Options [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Term of stock option | 7 years | |||||
Grants vest percentage | 100% |
Share-Based Compensation - Summ
Share-Based Compensation - Summary Of Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 01, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward] | ||||
Shares, Outstanding Beginning Balance | 1,750,967 | 657,000 | ||
Shares, Granted | 0 | 135,000 | ||
shares, allocation of stock options in spin-off | (77,000) | |||
Shares, Cancelled/Forfeited | 0 | (31,700) | ||
Shares, Exercised | 0 | |||
Shares, allocation of stock options in business combination | 1,067,667 | |||
Shares, Outstanding Ending Balance | 693,000 | 1,750,967 | 1,750,967 | 657,000 |
Shares,Exercisable | 1,504,821 | 1,504,821 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 5.36 | $ 5.04 | ||
Weighted Average Exercise Price, Granted | 0 | 8.05 | ||
Weighted Average Exercise Price,Allocation of stock options in spin-off | 5.4 | |||
Weighted Average Exercise Price, Cancelled / Forfeited | 0 | 8.05 | ||
Weighted Average Exercise Price, Exercised | 0 | |||
Weighted Average Exercise Price,Allocation of stock options in business combination | 5.36 | |||
Weighted Average Exercise Price, Outstanding Ending Balance | 5.36 | 5.36 | $ 5.04 | |
Weighted Average Exercise Price, Exercisable | $ 4.93 | $ 4.93 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Weighted Average Remaining Contractual Life, Outstanding | 2 years 9 months 18 days | 2 years 10 months 24 days | 4 years 1 month 6 days | |
Weighted Average Remaining Contractual Life, Exercisable | 2 years 3 months 18 days | 2 years 3 months 18 days | ||
Aggregate Intrinsic Value, Outstanding Beginning Balance | $ 486,097 | |||
Aggregate Intrinsic Value, Outstanding Ending Balance | 47,326 | $ 486,097 | ||
Aggregate Intrinsic Value, Exercisable | $ 47,326 | $ 486,097 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Fair Value of Share-based Awards Measured with Weighted-Average Assumptions (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Expected volatility | 79.30% | 75.10% | 75.10% | 76.60% |
Risk-free interest rate | 4.66% | 1.81% | 1.81% | 1.15% |
Expected term (in years) | 1 year | 7 years | 7 years | 7 years |
Expected dividend yield | 0% | 0% | 0% | 0% |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Share-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity-based compensation | $ 165,007 | $ 108,014 | $ 560,060 | $ 4,890 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity-based compensation | 102,488 | 95,657 | 380,631 | |
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity-based compensation | $ 62,519 | $ 12,357 | $ 179,429 | $ 4,890 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Fair Value of Convertible Notes Payable Previously Measured at Fair Value Determined by Level 3 Inputs and Warrant Liability Measured at Fair Value on Recurring Basis Determined by Level 1 Inputs (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Convertible Notes Payable [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at Beginning | $ 1,374,698 | $ 0 |
Issuance of convertible note | 2,597,500 | |
Assumption of warrant liability in Business Combination | 0 | |
Fair value adjustments | 40,797 | 1,213,998 |
Conversion to common stock | (2,436,800) | |
Balance at Ending | 1,415,495 | 1,374,698 |
Derivative Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at Beginning | 166,000 | 0 |
Issuance of convertible note | 165,000 | |
Assumption of warrant liability in Business Combination | 0 | |
Fair value adjustments | (1,000) | (1,979,110) |
Conversion to common stock | 0 | |
Balance at Ending | 165,000 | 166,000 |
Derivative Liability [Member] | Forward Purchase Agreement [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Assumption of Forward Purchase Agreement | 68,110 | |
Derivative Liability [Member] | Key Company Stockholder Forward Purchase Agreement [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Assumption of Forward Purchase Agreement | 12,000 | |
Derivative Liability [Member] | White Lion Purchase Agreement [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Assumption of Forward Purchase Agreement | 1,900,000 | |
Derivative Asset [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at Beginning | 13,000 | |
Fair value adjustments | (13,000) | 13,000 |
Balance at Ending | 0 | 13,000 |
Warrant Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at Beginning | 525,000 | 0 |
Issuance of convertible note | 0 | |
Assumption of warrant liability in Business Combination | 450,000 | |
Fair value adjustments | (525,000) | 75,000 |
Conversion to common stock | 0 | |
Balance at Ending | $ 0 | $ 525,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 29, 2022 | Nov. 30, 2022 | Nov. 03, 2022 | Nov. 01, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||||||||||
Convertible notes payable | $ 1,512,500 | $ 1,415,495 | $ 1,374,698 | $ 1,415,495 | $ 1,374,698 | $ 0 | |||||
Embedded derivative liability fair value | $ 165,000 | $ 165,000 | $ 165,000 | ||||||||
Percentage of Estimated Probability of Maturity | 100% | 100% | 100% | 100% | |||||||
Percentage of Discount Awarded upon Conversion | 10% | 10% | 10% | 10% | |||||||
Percentage of Discount Rate | 10% | 10% | 10% | 10% | |||||||
Common stock, Share | 375,939 | 375,939 | |||||||||
Transfers among the Level 1, Level 2 and Level 3 categories | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Expected volatility | 79.30% | 75.10% | 75.10% | 76.60% | |||||||
Risk-free interest rate | 4.66% | 1.81% | 1.81% | 1.15% | |||||||
Expected term (in years) | 1 year | 7 years | 7 years | 7 years | |||||||
Change in fair value of derivative liability | $ 92,110 | $ 0 | |||||||||
Derivative liability | 165,000 | 166,000 | $ 165,000 | 166,000 | 0 | ||||||
Derivative asset | 0 | $ 13,000 | 0 | $ 13,000 | $ 0 | ||||||
Forward Purchase Agreement [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Common stock, Share | 375,939 | ||||||||||
Stock price | $ 13.05 | $ 13.05 | |||||||||
Expected volatility | 28.10% | ||||||||||
Risk-free interest rate | 4% | ||||||||||
Expected term (in years) | 1 month 28 days | ||||||||||
Change in fair value of derivative liability | $ 68,110 | ||||||||||
Derivative liability | $ 0 | $ 0 | |||||||||
Key Company Stockholder Forward Purchase Agreement [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Percentage of Discount Rate | 0.50% | 0.50% | 0.50% | ||||||||
Stock price | $ 10 | $ 4.21 | $ 4.21 | ||||||||
Expected volatility | 94.50% | 82.20% | |||||||||
Risk-free interest rate | 4.60% | 4.50% | |||||||||
Change in fair value of derivative liability | $ 25,000 | ||||||||||
Derivative asset | $ 13,000 | $ 13,000 | 13,000 | $ 13,000 | |||||||
Number of shares issue (in Shares) | 1,930,501 | 1,930,501 | |||||||||
Fair value of forward purchase agreement | $ 0 | ||||||||||
White Lion Purchase Agreement [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Percentage of Discount Rate | 45% | 5% | 0.25% | 5% | 0.25% | ||||||
Stock price | $ 13.05 | $ 0.65 | $ 4.19 | $ 0.65 | $ 4.19 | ||||||
Expected volatility | 86.50% | 78% | 81% | ||||||||
Risk-free interest rate | 4.53% | 3.84% | 4.16% | ||||||||
Change in fair value of derivative liability | $ 1,000 | $ 1,899,000 | |||||||||
Derivative liability | $ 0 | $ 1,000 | $ 0 | $ 1,000 | |||||||
Number of shares issue (in Shares) | 50,200 | 50,200 | 50,200 | ||||||||
Private Placement Warrants [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Stock price | $ 0.65 | $ 4.19 | $ 0.65 | $ 4.19 | |||||||
Expected volatility | 14% | 30% | |||||||||
Risk-free interest rate | 4.59% | 3.99% | |||||||||
Number of shares issue (in Shares) | 2,500,000 | ||||||||||
Convertible Notes Payable [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Convertible notes payable | $ 1,512,500 | $ 1,512,500 | $ 1,512,500 | $ 1,512,500 | |||||||
Embedded derivative liability fair value | $ 165,000 | $ 165,000 | $ 165,000 | 165,000 | |||||||
Derivative Liability [Member] | Forward Purchase Agreement [Member] | Level 3 [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Issuance of forward purchase agreement | 68,110 | ||||||||||
Derivative Liability [Member] | Key Company Stockholder Forward Purchase Agreement [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Issuance of forward purchase agreement | 13,000 | ||||||||||
Derivative Liability [Member] | Key Company Stockholder Forward Purchase Agreement [Member] | Level 3 [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Issuance of forward purchase agreement | 12,000 | ||||||||||
Derivative Liability [Member] | White Lion Purchase Agreement [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Issuance of forward purchase agreement | 1,000 | ||||||||||
Derivative Liability [Member] | White Lion Purchase Agreement [Member] | Level 3 [Member] | |||||||||||
Short-Term Debt [Line Items] | |||||||||||
Issuance of forward purchase agreement | $ 1,900,000 |
Related Party Transactions an_3
Related Party Transactions and Shared Service Costs - Schedule of Components of Net Transfers from pH Pharma (Details) - PH Pharma Ltd [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||
Research and development | $ 0 | $ 482,160 | $ 482,160 | $ 2,055,839 |
Selling, general and administrative | 0 | 72,345 | 72,345 | 447,506 |
Accounts payable and general financing activities | 0 | 809,469 | 809,469 | 3,925,492 |
Net increase in contributions from member | $ 0 | $ 1,363,974 | $ 1,363,974 | $ 6,428,837 |
Related Party Transactions an_4
Related Party Transactions and Shared Service Costs - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 01, 2022 | Mar. 31, 2022 | Jan. 31, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions (Details) [Line Items] | ||||||
Purchase price of founder shares | $ 250,000 | $ 1,152,163 | ||||
Related party paid amount | $ 250,000 | |||||
Accrued expenses | 2,198,568 | 2,038,291 | $ 990,485 | |||
Related party cost | $ 250,000 | |||||
Founder and Director[ Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
forwent salary | $ 1,500,000 | |||||
Forwent salary repayment period | 4 years | |||||
PH Pharma Ltd [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Purchase price of founder shares | $ 100,000 | |||||
Lease payment | 3,000 | |||||
Related party paid amount | 15,000 | |||||
Accounts payable, related parties, current | 345,808 | 426,673 | ||||
Accrued liabilities | 2,122,710 | 1,885,843 | ||||
Unpaid compensation | 1,892,060 | 1,095,043 | ||||
Accrued expenses | $ 230,650 | $ 790,800 | ||||
Related party cost | $ 15,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | |
Mar. 31, 2022 | Jan. 31, 2022 | |
Commitments and Contingencies (Details) [Line Items] | ||
Related Party Costs | $ 250,000 | |
Founder and Director[ Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
forwent salary | $ 1,500,000 | |
Related Party Transaction, Purchases from Related Party | $ 500,000 | |
Forwent salary repayment period | 4 years | |
Forwent salary and accrued interest yet to be paid | $ 1,000,000 |
Collaborative and Licensing A_2
Collaborative and Licensing Agreements - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
May 31, 2022 | Apr. 30, 2022 | Dec. 31, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Revenue | $ 13,854 | $ 52,950 | $ 607,681 | $ 528,309 | |||
Venn License Agreement [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Upfront payment from collaboration agreement | $ 400,000 | ||||||
Milestone payments | $ 107,100,000 | ||||||
Initial term of collaboration | 3 years | ||||||
Revenue | 0 | 0 | |||||
Reimbursement of costs and expenses | 0 | 0 | |||||
Venn License Agreement [Member] | Founder and Director[ Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Repayments of upfront payments | $ 400,000 | ||||||
Unpaid principal balance rate | 1% | ||||||
Repayment of upfront payments | $ 400,000 | ||||||
Contract liabilities | $ 400,000 | ||||||
Venn License Agreement [Member] | Accrued Expense [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Contract liabilities | $ 400,000 | ||||||
Venn License Agreement [Member] | Related Party Loan [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Contract liabilities | $ 400,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 29, 2022 USD ($) $ / shares shares | Nov. 30, 2022 $ / shares shares | Nov. 03, 2022 USD ($) | Apr. 30, 2023 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Nov. 30, 2022 USD ($) $ / shares shares | May 31, 2022 USD ($) shares | Apr. 30, 2022 USD ($) $ / shares | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jun. 23, 2023 $ / shares | Mar. 01, 2022 shares | |
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Preference shares, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | 0 | 0 | ||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | 0 | 0 | 0 | ||||||||||
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | ||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.6 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.6 | ||||||||
Share price per units (in Dollars per share) | $ / shares | 10 | $ 10 | 10 | ||||||||||||
Purchase price, per share | $ / shares | 5.18 | ||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 4.98 | $ 4.98 | |||||||||||||
Warrant redemption price per share | $ / shares | 0.01 | 0.01 | |||||||||||||
Last sale price of Common Stock | $ / shares | $ 18 | $ 18 | |||||||||||||
Proceeds from related party loan | $ | $ 250,000 | $ 0 | $ 523,640 | $ 1,500,000 | |||||||||||
Common stock, shares issued | 22,126,011 | 21,713,248 | 63,856 | 22,126,011 | 21,713,248 | 17,162,742 | |||||||||
Common stock, shares outstanding | 20,195,510 | 19,782,747 | 20,195,510 | 19,782,747 | 17,162,742 | 8,283,613 | |||||||||
Aggregate gross proceeds | $ | $ 1,200,000 | $ 5,177,163 | $ 0 | ||||||||||||
Share price (in Dollars per share) | $ / shares | $ 10.115 | $ 10.115 | $ 10.115 | ||||||||||||
Stock repurchased and retired during period, shares | 375,939 | 375,939 | |||||||||||||
Stock repurchased during period, shares | 375,939 | 375,939 | |||||||||||||
Escrow deposit | $ | $ 4,551,750 | $ 4,551,750 | $ 4,551,750 | ||||||||||||
Escrow deposit disbursements related to property acquisition | $ | 749,127 | $ 749,127 | |||||||||||||
Common stock convertible exchange ratio | 0.020719 | 0.020719 | 0.020719 | 0.020719 | 0.020719 | ||||||||||
Subsequent Event [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.6 | $ 0.6 | |||||||||||||
Common Stock Shares Forfeiture | 1,930,501 | ||||||||||||||
Private Placement Warrants [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Issuance of common stock, shares | 2,500,000 | ||||||||||||||
Share price (in Dollars per share) | $ / shares | 11.5 | $ 11.5 | |||||||||||||
Public Warrants [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Issuance of common stock, shares | 2,875,000 | ||||||||||||||
Share price (in Dollars per share) | $ / shares | 11.5 | $ 11.5 | |||||||||||||
Bridge Loan PIPE Subscription Agreements [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Aggregate gross proceeds | $ | $ 3,025,000 | ||||||||||||||
Share price (in Dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||||||
Key Company Stockholder Forward Purchase Agreement [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Share price per units (in Dollars per share) | $ / shares | $ 10 | ||||||||||||||
Aggregate amount (in Dollars) | $ | $ 10,000,000 | ||||||||||||||
Purchase price, per share | $ / shares | $ 5.18 | ||||||||||||||
Issuance of common stock, shares | 1,930,501 | 1,930,501 | |||||||||||||
Number of business days to repurchase shares from the closing of the Business Combination | 180 days | ||||||||||||||
Principal amount | $ | $ 10,000,000 | $ 10,000,000 | |||||||||||||
White Lion Purchase Agreement [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Issuance of common stock, shares | 50,200 | 50,200 | 50,200 | ||||||||||||
Weighted average price of common stock | 98% | 98% | |||||||||||||
Aggregate price of purchase notice shares | 50,000,000 | 50,000,000 | |||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 4.98 | $ 4.98 | |||||||||||||
Additional commitment Value | $ | $ 250,000 | ||||||||||||||
Common stock, shares issued | 412,763 | 412,763 | |||||||||||||
Aggregate gross purchase price | $ | $ 100,000,000 | ||||||||||||||
Initial commitment shares | 500,000 | 500,000 | 500,000 | 500,000 | |||||||||||
Aggregate purchase amount of shares | $ | $ 100,000 | ||||||||||||||
Additional commitment shares | 250,000 | 250,000 | |||||||||||||
White Lion Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Issuance of common stock, shares | 50,200 | ||||||||||||||
Additional commitment Value | $ | $ 250,000 | ||||||||||||||
Common stock, shares issued | 412,763 | 412,763 | |||||||||||||
Aggregate purchase amount of shares | $ | $ 100,000 | ||||||||||||||
White Lion Purchase Agreement [Member] | Tranches A [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Additional commitment shares | 250,000 | 250,000 | |||||||||||||
White Lion Purchase Agreement [Member] | Tranches B [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Additional commitment shares | 250,000 | 250,000 | |||||||||||||
Additional PIPE Subscription Agreement [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Share price per units (in Dollars per share) | $ / shares | $ 10 | $ 10 | |||||||||||||
Issuance of shares to PIPE Subscribers, shares | 50,000 | ||||||||||||||
Warrant [Member] | Additional PIPE Subscription Agreement [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Share price (in Dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||||||
Issuance of shares to PIPE Subscribers, shares | 46,500 | ||||||||||||||
PIPE Financing Warrants [Member] | Bridge Loan PIPE Subscription Agreements [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Issuance of shares to PIPE Subscribers, shares | 281,325 | ||||||||||||||
PIPE Shares [Member] | Bridge Loan PIPE Subscription Agreements [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Issuance of shares to PIPE Subscribers, shares | 302,500 | ||||||||||||||
Investor [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Escrow deposit disbursements related to property acquisition | $ | $ 3,802,623 | $ 3,802,623 | |||||||||||||
Maximum [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Exercise of investor's right to sell shares of common stock | 450,000 | 450,000 | |||||||||||||
Maximum [Member] | White Lion Purchase Agreement [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Purchase price percentage | 150% | 150% | |||||||||||||
Weighted average price of common stock | 90% | 97% | 97% | ||||||||||||
Maximum [Member] | White Lion Purchase Agreement [Member] | Tranches A [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Aggregate purchase amount of shares | $ | $ 5,000,000 | $ 5,000,000 | |||||||||||||
Maximum [Member] | White Lion Purchase Agreement [Member] | Tranches B [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Aggregate purchase amount of shares | $ | $ 10,000,000 | $ 10,000,000 | |||||||||||||
Minimum [Member] | White Lion Purchase Agreement [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Purchase price percentage | 200% | 40% | 40% | ||||||||||||
Weighted average price of common stock | 94.50% | 94.50% | |||||||||||||
Aggregate purchase amount of shares | $ | $ 1,000,000 | ||||||||||||||
Percentage of daily volume-weighted average price of common stock | 85% | ||||||||||||||
Minimum [Member] | White Lion Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Aggregate purchase amount of shares | $ | $ 1,000,000 | ||||||||||||||
Minimum [Member] | White Lion Purchase Agreement [Member] | Tranches A [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Aggregate purchase amount of shares | $ | $ 1,000,000 | $ 1,000,000 | |||||||||||||
Minimum [Member] | White Lion Purchase Agreement [Member] | Tranches B [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Aggregate purchase amount of shares | $ | $ 2,000,000 | $ 2,000,000 | |||||||||||||
Founder Shares [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Common stock, shares outstanding | 8,283,613 | 8,283,613 | 8,283,613 | 8,283,613 | |||||||||||
Founder Shares [Member] | Subsequent Event [Member] | |||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||
Proceeds from related party loan | $ | $ 2,031,034 | ||||||||||||||
Common Stock Shares Forfeiture | 1,930,501 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Company's Outstanding Warrants (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 | Nov. 30, 2022 |
Class of Warrant or Right [Line Items] | |||
Exercise price per share | $ 0.01 | ||
Warrants | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants | 5,867,045 | 5,867,045 | |
Private Placement Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants | 2,500,000 | 2,500,000 | |
Exercise price per share | $ 11.5 | $ 11.5 | |
Expiration Date | Nov. 01, 2027 | ||
Public Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants | 2,875,000 | 2,875,000 | |
Exercise price per share | $ 11.5 | $ 11.5 | |
Expiration Date | Nov. 01, 2027 | ||
Other Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants | 492,045 | 492,045 | |
Exercise price per share | $ 0.01 | $ 0.01 | |
Expiration Date | Nov. 01, 2023 |
Grant Revenue - Additional Info
Grant Revenue - Additional Information (Details) - Grant [Member] - US Army Medica Research Acquisition Activity [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Grant revenue | $ 13,854 | $ 52,950 | $ 600,000 | $ 500,000 |
Available remaining fund | 2,900,000 | 2,900,000 | ||
COVID 19 Therapeutic [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Grant revenue | $ 4,000,000 | $ 4,000,000 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Oct. 31, 2023 | Nov. 01, 2022 USD ($) Day | Aug. 31, 2021 | Mar. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | May 31, 2022 USD ($) | Apr. 30, 2022 USD ($) | Jan. 31, 2022 USD ($) | Aug. 31, 2021 USD ($) | May 31, 2021 USD ($) | Apr. 30, 2021 USD ($) | Apr. 30, 2020 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 30, 2023 $ / shares | Oct. 31, 2022 $ / shares | |
Short-Term Debt [Line Items] | ||||||||||||||||||||
Loans Payable to Bank | $ 1,250,000 | $ 23,000 | $ 1,250,000 | |||||||||||||||||
Proceeds from related party loan | $ 250,000 | $ 0 | $ 523,640 | $ 1,500,000 | ||||||||||||||||
Interest rate | 1% | 1% | 1% | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4% | |||||||||||||||||||
Business combination exercise price | $ / shares | $ 0.01 | |||||||||||||||||||
Fair value adjustment to long-term convertible notes payable | (1,186,800) | 0 | ||||||||||||||||||
Loan, maturity date | Jul. 31, 2022 | Jul. 31, 2022 | May 31, 2022 | |||||||||||||||||
Gain on extinguishment of debt | $ 866,332 | (467,073) | 866,332 | |||||||||||||||||
Repayment of related party loan | (173,640) | 0 | ||||||||||||||||||
Long-Term Debt | 0 | 0 | ||||||||||||||||||
Exercise price per share | $ / shares | $ 0.01 | |||||||||||||||||||
Conversion of loan, shares | shares | 50,273 | |||||||||||||||||||
Sale of price per share (in Dollars per share) | $ / shares | $ 10 | $ 0.6 | $ 10 | |||||||||||||||||
Warrants issued (in shares) | shares | 46,754 | |||||||||||||||||||
Convertible notes payable | $ 1,512,500 | $ 1,415,495 | 1,415,495 | 1,374,698 | 0 | |||||||||||||||
Weighted average price of common stock | 90% | |||||||||||||||||||
Trading days | Day | 5 | |||||||||||||||||||
Derivative liability fair value of collateral | $ 165,000 | 165,000 | 165,000 | |||||||||||||||||
Embedded derivative fair value of derivative liability | 165,000 | |||||||||||||||||||
Fair value of derivative liability | 165,000 | 165,000 | ||||||||||||||||||
Total premiums, taxes and fees financed | 1,006,342 | 1,006,342 | 1,006,342 | |||||||||||||||||
Amortization of debt discount premium | $ 40,797 | $ 27,198 | ||||||||||||||||||
Annual interest rate | 7.20% | 7.20% | ||||||||||||||||||
Insurance financing payable | $ 575,985 | $ 575,985 | $ 921,576 | $ 0 | ||||||||||||||||
Liability for the promissory note | 211,643 | |||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Interest rate | 5% | 5% | ||||||||||||||||||
Loan, maturity date | Dec. 31, 2023 | |||||||||||||||||||
Sale of price per share (in Dollars per share) | $ / shares | $ 0.6 | |||||||||||||||||||
Gross proceeds percentage | 15% | |||||||||||||||||||
Director Nominee [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Loans Payable to Bank | $ 500,000 | $ 500,000 | ||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 5% | |||||||||||||||||||
Founder and Director[ Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Loans Payable to Bank | $ 250,000 | $ 250,000 | ||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 5% | |||||||||||||||||||
Employment Agreement | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Proceeds from related party loan | $ 1,000,000 | |||||||||||||||||||
Repayment of debt | 150,000 | 150,000 | ||||||||||||||||||
Repayment of related party loan | 500,000 | |||||||||||||||||||
Venn License Agreement [Member] | Founder and Director[ Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Repayments of upfront payments | $ 400,000 | |||||||||||||||||||
Unpaid principal balance rate | 1% | |||||||||||||||||||
Return from repayment of upfront payments | $ 400,000 | |||||||||||||||||||
Contract liabilities | $ 400,000 | |||||||||||||||||||
Ignyte Sponsor LLC [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Promissory note assumed | $ 211,643 | |||||||||||||||||||
Loans Payable [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Proceeds from related party loan | $ 1,500,000 | $ 750,000 | ||||||||||||||||||
Loans Payable [Member] | Previously Reported [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Proceeds from related party loan | $ 750,000 | |||||||||||||||||||
Loans Payable [Member] | Employment Agreement | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Proceeds from related party loan | $ 1,500,000 | |||||||||||||||||||
Long-Term Debt | $ 1,350,000 | $ 1,350,000 | 1,350,000 | |||||||||||||||||
Silicon Valley Bank | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Loans Payable to Bank | $ 492,375 | $ 367,770 | ||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1% | 1% | ||||||||||||||||||
Loan, maturity date | Apr. 20, 2022 | Apr. 15, 2026 | ||||||||||||||||||
Convertible Promissory Notes | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Loans Payable to Bank | $ 1,250,000 | $ 1,250,000 | ||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 5% | |||||||||||||||||||
Warrant coverage on common stock prior to the consummation of the business combination | 25% | |||||||||||||||||||
Business combination exercise price | $ / shares | $ 0.01 | |||||||||||||||||||
Change in the fair value of the promissory notes | 0 | |||||||||||||||||||
Fair value adjustment to long-term convertible notes payable | $ 1,200,000 | |||||||||||||||||||
Exercise price per share | $ / shares | $ 0.01 | |||||||||||||||||||
Conversion of loan, shares | shares | 126,306 | |||||||||||||||||||
Sale of price per share (in Dollars per share) | $ / shares | $ 10 | |||||||||||||||||||
Warrants issued (in shares) | shares | 117,466 | |||||||||||||||||||
Convertible Promissory Notes | Subsequent Event [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Interest rate | 8% | |||||||||||||||||||
Convertible Promissory Notes | Maximum [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Warrant coverage on common stock | 93% | |||||||||||||||||||
Convertible Promissory Notes | Minimum [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Warrant coverage on common stock | 25% | |||||||||||||||||||
Long Term Convertible Notes Payable | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Interest rate | 8% | |||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 5% | |||||||||||||||||||
Warrant coverage on common stock prior to the consummation of the business combination | 25% | |||||||||||||||||||
Conversion of loan, shares | shares | 126,306 | |||||||||||||||||||
Warrants issued (in shares) | shares | 117,466 | |||||||||||||||||||
Convertible notes payable | $ 1,512,500 | |||||||||||||||||||
Gross proceeds percentage | 15% | |||||||||||||||||||
Weighted average price of common stock | 90% | |||||||||||||||||||
Long Term Convertible Notes Payable | Maximum [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Warrant coverage on common stock | 93% | |||||||||||||||||||
Long Term Convertible Notes Payable | Minimum [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Warrant coverage on common stock | 25% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Domestic | $ (10,222,781) | $ 978,993 | ||
Foreign | (2,939,936) | (9,189,502) | ||
Total | $ (6,766,834) | $ (2,103,935) | $ (13,162,717) | $ (8,210,509) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current Federal, State and Local, Tax Expense (Benefit) [Abstract] | ||||
Current - Federal | $ 3,000 | $ 16,761 | ||
Current - State | (42,000) | 66,306 | ||
Total current | (39,000) | 83,067 | ||
Deferred - Federal | (1,984,000) | (1,000) | ||
Deferred - State | (639,000) | |||
Deferred - Foreign | (1,603,000) | |||
Change in Valuation allowance | 4,191,000 | |||
Total deferred | (35,000) | (1,000) | ||
(Benefit from) provision for income taxes | $ 0 | $ (3,500) | $ (74,000) | $ 82,067 |
Effective income tax rate | 0% | 0.25% | 0.56% | (1.01%) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of the Federal Income Tax Effective Rate (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Tax computed at federal statutory rate | 21% | 21% | ||
State Tax Provision/(Benefit) net of federal benefit | 4.86% | (0.73%) | ||
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate | 0.36% | 4.43% | ||
Permanent differences | (1.91%) | 2.19% | ||
Return to Provision | 8.83% | |||
Foreign tax credits | 2.16% | |||
Change in valuation allowance | (31.84%) | (30.06%) | ||
Warrants issued on conversion | (0.74%) | |||
Income Tax Provision/(Benefit) | 0% | 0.25% | 0.56% | (1.01%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||||
Statutory tax rate | 21% | 21% | ||
Change in Valuation allowance | $ 28,900,000 | $ 27,800,000 | ||
Net operating losses deduction in valuation allowance | $ 3,200,000 | |||
NOLs generated before 2020, carryforward term | 10 years | |||
NOLs generated after 2020, carryforward term | 15 years | |||
Uncertain tax positions | $ 0 | |||
Effective tax rate | 0% | 0.25% | 0.56% | (1.01%) |
Income tax benefit (expense) | $ 0 | $ 3,500 | $ 74,000 | $ (82,067) |
U.S | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 4,600,000 | |||
Open tax year | 2019 2020 2021 2022 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 4,300,000 | |||
Open tax year | 2019 2020 2021 2022 | |||
Korean | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 99,900,000 | |||
Operating loss carryforwards expiration year | 2025 | |||
Open tax year | 2017 2018 2019 2020 2021 2022 |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Tax Assets, Net [Abstract] | ||
Federal Net Operating Loss | $ 964,000 | $ 9,000 |
State Net Operating Loss | 297,000 | 0 |
Foreign Net Operating Loss | 24,965,000 | 27,414,000 |
Foreign Tax Credits | 379,000 | 428,000 |
Foreign Accruals | 936,000 | 0 |
Accruals | 615,000 | 43,000 |
Capitalized Start up Costs | 209,000 | 0 |
Capitalized Section 174 R&D | 437,000 | 0 |
Right of Use Operating Lease ASC 842 | 1,183,000 | 0 |
Total deferred tax assets | 29,985,000 | 27,894,000 |
Deferred Tax Liabilities, Net [Abstract] | ||
Right of Use Operating Lease ASC 842 | (1,030,000) | 0 |
Depreciation | (88,000) | (87,000) |
Total deferred tax liabilities | (1,118,000) | (87,000) |
Total net deferred tax assets | 28,867,000 | 27,807,000 |
Less: valuation allowance | (28,867,000) | (27,842,000) |
Net deferred tax assets | $ 0 | $ (35,000) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | 1 Months Ended | |||||||||||
Jul. 20, 2023 | Jun. 23, 2023 | Aug. 31, 2021 | Apr. 30, 2023 | Mar. 31, 2023 | Aug. 31, 2021 | May 31, 2021 | Oct. 31, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | Oct. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | ||||||||||||
Interest rate | 1% | 1% | 1% | |||||||||
Loan, maturity date | Jul. 31, 2022 | Jul. 31, 2022 | May 31, 2022 | |||||||||
Par value of common shares issued (in Dollars per share) | $ 0.6 | $ 0.6 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Common stock per share | 0.6 | |||||||||||
Conversion price per share | 0.6 | $ 10 | $ 10 | |||||||||
Common Stock, Value, Issued | $ 2,019 | $ 1,978 | $ 1,716 | |||||||||
Class of warrant or rights exercise price | $ 0.01 | |||||||||||
Long Term Convertible Notes Payable | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Interest rate | 8% | |||||||||||
Subsequent Event [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
proceeds from loan | $ 250,000 | |||||||||||
Interest rate | 5% | |||||||||||
Loan, maturity date | Dec. 31, 2023 | |||||||||||
Par value of common shares issued (in Dollars per share) | $ 0.6 | $ 0.6 | ||||||||||
Related party loans | $ 1,130,775 | |||||||||||
Warrant to purchase shares of common stock | 666,667 | 1,884,625 | ||||||||||
Conversion price per share | $ 0.6 | |||||||||||
Commission paid | $ 125,000 | |||||||||||
Common Stock, Value, Issued | $ 400,000 | |||||||||||
Subsequent Event [Member] | Founder and Director[ Member] | Excercise Of Warrants [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock issued during the period shares new issues | 458,333 | |||||||||||
Class of warrant or rights exercise price | $ 0.6 | |||||||||||
Proceeds from the exercise of warrants | $ 275,000 | |||||||||||
Subsequent Event [Member] | Long Term Convertible Notes Payable | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Related party loans | $ 1,130,775 | |||||||||||
Subsequent Event [Member] | Convertible Notes | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock per share | $ 0.6 | |||||||||||
Aggregate purchase amount of shares | $ 2,195,034 | |||||||||||
Subsequent Event [Member] | Unsecured Convertible Promissory Notes | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Par value of common shares issued (in Dollars per share) | $ 0.6 | |||||||||||
Unsecured convertible promissory note | $ 1,130,775 | |||||||||||
Class of warrant or right issued | 1,884,625 | |||||||||||
Subsequent Event [Member] | Warrant Subscription Agreements | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Par value of common shares issued (in Dollars per share) | $ 0.6 | |||||||||||
Warrant to purchase shares of common stock | 209,670 | |||||||||||
Aggregate Principal Amount | $ 3,658,390 |