Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 11, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40652 | |
Entity Registrant Name | Indaptus Therapeutics, Inc. | |
Entity Central Index Key | 0001857044 | |
Entity Tax Identification Number | 86-3158720 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 3 Columbus Circle | |
Entity Address, Address Line Two | 15th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | +(347) | |
Local Phone Number | 480 9760 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | INDP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,193,579 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 41,857,222 | $ 1,637,499 |
Assets held for sale | 600,000 | |
Prepaid expenses and other current assets | 1,397,669 | 94,500 |
Total current assets | 43,854,891 | 1,731,999 |
Non-current assets | ||
Property and equipment, net | 4,335 | 1,349 |
Other assets | 44,445 | |
Total non-current assets | 4,335 | 45,794 |
Total assets | 43,859,226 | 1,777,793 |
Current liabilities | ||
Accounts payable and other current liabilities | 5,780,184 | 598,365 |
SAFE agreements | 1,417,129 | |
Total current liabilities | 5,780,184 | 2,015,494 |
Commitments and contingent liabilities (Note 7) | ||
Stockholders’ equity (deficit) | ||
Preferred stock; Series Seed; $0.01 par value; 5,000,000 and 972,335 shares authorized as of September 30, 2021 and December 31, 2020, respectively, 0 and 835,928 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 8,359 | |
Common stock; $0.01 par value, 200,000,000 and 3,185,224 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 8,133,243 and 1,944,672 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 81,332 | 19,447 |
Additional paid in capital | 50,452,275 | 7,693,994 |
Accumulated deficit | (12,454,565) | (7,959,501) |
Total stockholders’ equity (deficit) | 38,079,042 | (237,701) |
Total liabilities and stockholders’ equity (deficit) | $ 43,859,226 | $ 1,777,793 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par value | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 5,000,000 | 972,335 |
Preferred Stock, Shares Issued | 0 | 835,928 |
Preferred Stock, Shares Outstanding | 0 | 835,928 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 200,000,000 | 3,185,224 |
Common Stock, Shares, Issued | 8,133,243 | 1,944,672 |
Common Stock, Shares, Outstanding | 8,133,243 | 1,944,672 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating expenses | ||||
Research and development | $ 697,674 | $ 1,349,835 | $ 1,578,512 | $ 2,302,883 |
General and administrative | 2,670,317 | 196,578 | 2,932,100 | 527,830 |
Total operating expenses | 3,367,991 | 1,546,413 | 4,510,612 | 2,830,713 |
Loss from operations | (3,367,991) | (1,546,413) | (4,510,612) | (2,830,713) |
Other income, net | 827 | 3,680 | 15,548 | 16,781 |
Net loss | $ (3,367,164) | $ (1,542,733) | $ (4,495,064) | $ (2,813,932) |
Net loss available to common stockholders per share of common stock, basic and diluted | $ (0.81) | $ (0.79) | $ (1.67) | $ (1.45) |
Weighted average number of shares used in calculating net loss per share, basic and diluted | 4,180,744 | 1,944,672 | 2,692,770 | 1,944,672 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 8,359 | $ 19,447 | $ 7,557,991 | $ (4,375,350) | $ 3,210,447 |
Beginning balance, shares at Dec. 31, 2019 | 835,928 | 1,944,672 | |||
Stock-based compensation | 38,883 | 38,883 | |||
Net loss | (558,581) | (558,581) | |||
Ending balance, value at Mar. 31, 2020 | $ 8,359 | $ 19,447 | 7,596,874 | (4,933,931) | 2,690,749 |
Ending balance, shares at Mar. 31, 2020 | 835,928 | 1,944,672 | |||
Beginning balance, value at Dec. 31, 2019 | $ 8,359 | $ 19,447 | 7,557,991 | (4,375,350) | 3,210,447 |
Beginning balance, shares at Dec. 31, 2019 | 835,928 | 1,944,672 | |||
Net loss | (2,813,932) | ||||
Ending balance, value at Sep. 30, 2020 | $ 8,359 | $ 19,447 | 7,674,863 | (7,189,282) | 513 |
Ending balance, shares at Sep. 30, 2020 | 835,928 | 1,944,672 | |||
Beginning balance, value at Mar. 31, 2020 | $ 8,359 | $ 19,447 | 7,596,874 | (4,933,931) | 2,690,749 |
Beginning balance, shares at Mar. 31, 2020 | 835,928 | 1,944,672 | |||
Stock-based compensation | 38,781 | 38,781 | |||
Net loss | (712,618) | (712,618) | |||
Ending balance, value at Jun. 30, 2020 | $ 8,359 | $ 19,447 | 7,635,655 | (5,646,549) | 2,016,912 |
Ending balance, shares at Jun. 30, 2020 | 835,928 | 1,944,672 | |||
Stock-based compensation | 39,208 | 39,208 | |||
Net loss | (1,542,733) | (1,542,733) | |||
Ending balance, value at Sep. 30, 2020 | $ 8,359 | $ 19,447 | 7,674,863 | (7,189,282) | 513 |
Ending balance, shares at Sep. 30, 2020 | 835,928 | 1,944,672 | |||
Beginning balance, value at Dec. 31, 2020 | $ 8,359 | $ 19,447 | 7,693,994 | (7,959,501) | (237,701) |
Beginning balance, shares at Dec. 31, 2020 | 835,928 | 1,944,672 | |||
Stock-based compensation | 20,445 | 20,445 | |||
Net loss | (612,421) | (612,421) | |||
Ending balance, value at Mar. 31, 2021 | $ 8,359 | $ 19,447 | 7,714,439 | (8,571,922) | (829,677) |
Ending balance, shares at Mar. 31, 2021 | 835,928 | 1,944,672 | |||
Beginning balance, value at Dec. 31, 2020 | $ 8,359 | $ 19,447 | 7,693,994 | (7,959,501) | (237,701) |
Beginning balance, shares at Dec. 31, 2020 | 835,928 | 1,944,672 | |||
Net loss | (4,495,064) | ||||
Ending balance, value at Sep. 30, 2021 | $ 81,332 | 50,452,275 | (12,454,565) | 38,079,042 | |
Ending balance, shares at Sep. 30, 2021 | 8,133,243 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 8,359 | $ 19,447 | 7,714,439 | (8,571,922) | (829,677) |
Beginning balance, shares at Mar. 31, 2021 | 835,928 | 1,944,672 | |||
Stock-based compensation | 20,673 | 20,673 | |||
Net loss | (515,479) | (515,479) | |||
Ending balance, value at Jun. 30, 2021 | $ 8,359 | $ 19,447 | 7,735,112 | (9,087,401) | (1,324,483) |
Ending balance, shares at Jun. 30, 2021 | 835,928 | 1,944,672 | |||
Conversion of preferred stock | $ (8,359) | $ 8,359 | |||
Conversion of preferred stock, Shares | (835,928) | 835,928 | |||
Conversion of SAFE agreements | $ 7,666 | 6,409,463 | 6,417,129 | ||
Conversion of SAFE agreements, shares | 766,627 | ||||
Issuance of common stock upon merger, net of Decoy’s transaction costs in the amount of $665,627 | $ 18,587 | 8,246,233 | 8,264,820 | ||
Issuance of common stock upon merger, net of Decoy's transaction costs, shares | 1,858,743 | ||||
Issuance of pre-funded warrants and warrants, net of issuance costs in the amount of $2,706,598 | 27,266,129 | 27,266,129 | |||
Exercise of pre-funded warrants | $ 27,273 | 27,273 | |||
Exercise of prepaid warrants, shares | 2,727,273 | ||||
Stock-based compensation | 795,338 | 795,338 | |||
Net loss | (3,367,164) | (3,367,164) | |||
Ending balance, value at Sep. 30, 2021 | $ 81,332 | $ 50,452,275 | $ (12,454,565) | $ 38,079,042 | |
Ending balance, shares at Sep. 30, 2021 | 8,133,243 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) (Parenthetical) | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Private Placement [Member] | |
Issuance expense | $ 2,706,598 |
Merger Transaction [Member] | |
Decoy's transaction costs | $ 665,627 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (4,495,064) | $ (2,813,932) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 868 | 639 |
Stock-based compensation | 836,456 | 116,872 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,128,933) | (19,418) |
Accounts payable and other current liabilities | (2,964,147) | 348,241 |
Net cash used in operating activities | (7,750,820) | (2,367,598) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,854) | |
Net cash used in investing activities | (3,854) | |
Cash flows from financing activities: | ||
Proceeds from merger | 16,346,622 | |
Decoy’s transaction costs | (665,627) | |
Issuance of pre-funded warrants and warrants | 29,972,727 | |
Issuance costs of Private Placement | (2,706,598) | |
Exercise of pre-funded warrants | 27,273 | |
Proceeds from SAFEs | 5,000,000 | 1,167,129 |
Net cash provided by financing activities | 47,974,397 | 1,167,129 |
Net increase (decrease) in cash and cash equivalents | 40,219,723 | (1,200,469) |
Cash and cash equivalents at beginning of period | 1,637,499 | 3,798,955 |
Cash and cash equivalents at end of period | 41,857,222 | 2,598,486 |
Noncash investing and financing activities | ||
Conversion of preferred stock | 8,359 | |
Conversion of SAFEs | 6,417,129 | |
Liabilities assumed, net of non-cash assets received in reverse merger | 7,616,175 | |
Release of deposit upon closing of Merger | 200,000 | |
Supplemental cash flow disclosures | ||
Cash paid for income taxes | 800 | 800 |
Cash received for interest earned on deposits | $ 2,362 | $ 12,365 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 2021 | |
General | |
GENERAL | GENERAL a. Indaptus Therapeutics, Inc. and its wholly owned subsidiaries, Decoy Biosystems, Inc. and Intec Pharma Ltd., collectively (the “Company”), is a biotechnology company dedicated to enhancing and expanding curative cancer immunotherapy for patients with unresectable or metastatic solid tumors and lymphomas, which are responsible for more than 90% of all cancer deaths. The Company is developing a novel, multi-targeted product that activates both innate and adaptive anti-tumor and anti-viral immune responses. Indaptus Therapeutics, Inc. (“Indaptus”), formerly “Intec Parent Inc.”, was established and incorporated in Delaware on February 24, 2021, as a private Delaware corporation and wholly owned subsidiary of Intec Pharma Ltd., (“Intec Israel”), a former publicly traded company. b. On August 3, 2021, Indaptus completed its merger with Decoy Biosystems, Inc., (“Decoy”), following the satisfaction or waiver of the conditions set forth in the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 15, 2021 among Indaptus, Decoy, Intec Israel, Domestication Merger Sub Ltd., an Israeli company and a wholly-owned subsidiary of Indaptus (“Domestication Merger Sub”), and Dillon Merger Subsidiary Inc., a Delaware corporation and wholly owned subsidiary of Indaptus (“the Merger Sub”), pursuant to which Merger Sub merged with and into Decoy, with Decoy surviving as a wholly owned subsidiary of Indaptus (“the Merger”) and the business conducted by Decoy became the business conducted by Indaptus. Previously, on July 26, 2021, Intec Israel implemented a 1-for-4 of its outstanding ordinary shares, options and warrants and proportionate adjustments were made to its exercise prices. In addition, on July 27, 2021, Intec Israel, Indaptus and the Domestication Merger Sub, completed the domestication merger pursuant to the terms and conditions of the Agreement and Plan of Merger and Reorganization, dated April 27, 2021, whereby Domestication Merger Sub merged with and into Intec Israel, with Intec Israel being the surviving entity and a wholly-owned subsidiary of Indaptus. Also, in connection with the Merger, Indaptus changed its name from “Intec Parent, Inc.” to “Indaptus Therapeutics, Inc.”. Following completion of the Merger, shares of Indaptus common stock commenced trading at market open on August 4, 2021, on the Nasdaq Capital Market under the name “Indaptus Therapeutics, Inc.” and under the symbol “INDP”. In connection with the completion of the Merger, on August 4, 2021, the Company’s board determined to wind down the Accordion Pill business of Intec Israel. The Company expects that the winding down of the Accordion Pill business will be completed by the end of 2021. For accounting purposes, Decoy is considered to have acquired Indaptus based on the terms of the Merger and an analysis of the criteria outlined in Accounting Standards Codification 805. The Merger has been accounted for as an asset acquisition (reverse merger transaction) rather than a business combination, as the net assets acquired/assumed by Decoy do not meet the definition of a business under U.S. GAAP. Accordingly, the historical financial statements of Decoy became the historical financial statements of the combined company upon the consummation of the Merger and the net assets acquired in connection with the Merger were recorded at their estimated fair market value as of August 3, 2021, the date of completion of the Merger. Prior to the Merger Decoy’s capitalization was comprised of 732,635 314,928 314,928 288,818 As of the effective time of the Merger each outstanding share of Decoy Common Stock was converted into 2.654353395 shares of Indaptus common stock, par value $ 0.01 per share. Accordingly, 1,336,381 3,547,227 77,639 206,079 The accompanying unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements give retroactive effect to the exchange ratio for all periods presented. Any difference is recognized as an adjustment to additional paid in capital. On August 3, 2021, immediately prior to the effectiveness of the Merger, Indaptus had 1,858,743 shares of common stock outstanding and a market capitalization of $ 17.9 million. The estimated fair value of the net assets of Indaptus on August 3, 2021, prior to the Merger, was approximately $ 8.7 million. The fair value of common stock on the Merger closing date, prior to the Merger, was above the fair value of the Indaptus’ net assets. As Indaptus’ net assets were predominantly composed of cash offset against current liabilities, the fair value of Indaptus’ net assets as of August 3, 2021, prior to the Merger, is considered to be the best indicator of the fair value and, therefore, the estimated preliminary purchase consideration. The following table summarizes the net assets acquired based on their estimated fair values as of August 3, 2021, immediately prior to completion of the Merger: ESTIMATED FAIR VALUE OF ASSETS ACQUIRED Cash and cash equivalents $ 16,346,622 Assets held for sale 600,000 Prepaid and other assets 129,791 Accrued liabilities (8,345,966 ) Acquired net assets $ 8,730,447 c. In connection with the Merger, on July 23, 2021, Indaptus entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional investor, pursuant to which Indaptus agreed to sell and issue, in a private placement (the “Private Placement”), pre-funded warrants and warrants for total net proceeds of approximately $ 27.3 million, after deducting the placement agent’s fees and other offering expenses payable by Indaptus in the amount of approximately $ 2.7 million. In September 2021, the pre-funded warrant was fully exercised. In addition, in connection with the Private Placement, Indaptus issued to the placement agent a warrant to purchase 136,364 shares of Indaptus’ common stock at an exercise price of $ 13.75 . For further details see note 6c. Risks and uncertainties The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional capital (or financing) to fund operating losses (see below), competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, and dependence on key individuals. The COVID-19 pandemic, that has spread globally, has resulted in significant financial market volatility and uncertainty in the past year. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies, including by causing disruptions in the supply of its product candidates and the conduct future clinical trials. The COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to the Company’s product candidates. Additionally, while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact its short-term and long-term liquidity. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity, or results of operations is uncertain. Going concern and management’s plans The Company has incurred net losses and utilized cash in operations since inception, has an accumulated deficit as of September 30, 2021, of $ 12.5 million, and expects to incur future additional losses as clinical testing and commercialization of the Company’s product candidates will require significant additional financing. Prior to the closing of the Merger, on August 3, 2021, Indaptus closed a private placement to raise gross cash proceeds of $ 30.0 million. The Company believes it has adequate cash to fund its operations for at least one year after the date of issuance of these consolidated financial statements. Management plans to raise additional capital through equity and/or debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and S-X Article 10 for interim financial statements. Accordingly, they do not contain all information and notes required by US GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2021, the consolidated results of operations, changes in stockholders’ equity for the three and nine-month periods ended September 30, 2021, and 2020 and cash flows for the nine-month periods ended September 30, 2021 and 2020. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Decoy’s annual financial statements for the year ended December 31, 2020, and their accompanying notes included in the Form S-4 filed with the SEC in connection with the Merger. The condensed balance sheet data as of December 31, 2020, included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2020, but does not include all disclosures required by US GAAP for annual financial statements. The results for the nine-month period ended September 30, 2021, are not necessarily indicative of the results expected for the year ending December 31, 2021. Principles of consolidation The consolidated financial statements include the accounts of Indaptus and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. Use of estimates The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. The most significant estimates relate to the determination of the fair value of stock-based compensation and the determination of period-end obligations to certain contract research organizations. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates. Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of common stock outstanding during the period. Diluted loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options, warrants and pre-funded warrants which are included under the treasury stock method when dilutive. The following stock options, warrants and pre-funded warrants were excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive for the periods presented (share data): SCHEDULE OF ANTI-DILUTIVE SECURITIES Weighted average Three months ended Nine months ended 2021 2020 2021 2020 Outstanding stock options 237,109 206,079 216,461 206,079 Warrants and Pre-funded warrants 3,678,244 - 1,230,589 - Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2021, and December 31, 2020, cash and cash equivalents consist primarily of checking and money market deposits. The Company’s cash balances exceed those that are federally insured; however, the Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. To date, the Company has not recognized any losses caused by uninsured balances. Assets held for sale In connection with the Merger, the Company determined certain equipment held for use by pre-Merger Intec Israel was no longer useful to the Company’s operations and entered into an agreement with an unrelated party to sell the equipment. The Company recognizes assets held for sale at estimated fair value. The fair value of the equipment as of September 30, 2021, was approximately $ 600,000 based on purchase offers that the unrelated party received from certain buyers in November 2021. Property and equipment Property and equipment assets are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company uses an estimated useful life of three years five years Patents The Company expenses patent costs, including related legal costs, as incurred and records such costs within general and administrative expense in the accompanying consolidated statements of operations. Accrued research and development costs The Company records the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred. These costs are a significant component of the Company’s research and development expenses, with a substantial portion of the Company’s on-going research and development activities conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which services or materials are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset, which will be amortized or expensed as the contracted services are performed. Research and development expenses Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development expenses consist primarily of fees paid to CROs as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs. General and administrative expenses General and administrative expenses include compensation, employee benefits, and stock-based compensation for executive management, finance administration and human resources, facility costs (including rent), professional service fees, and other general overhead costs, including depreciation, to support the Company’s operations. Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized in the foreseeable future. As of September 30, 2021, and December 31, 2020, the Company has recorded a full valuation allowance against its deferred tax assets. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses. Stock-based compensation The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined using the Black-Scholes-Merton (“Black-Scholes”) option pricing model as of the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis. The Black-Scholes model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of options granted by using the Black-Scholes model with the following assumptions: Expected Volatility Expected Term Risk-Free Interest Rate Dividend Yield The Company has elected to recognize forfeitures as they occur. Fair value measurements Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company follows the established framework for measuring fair value and providing disclosures about fair value measurements. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Accounting Standards Codification (“ASC”) 820 – Fair Value Measurement requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to estimate fair value, and defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2021 and December 31, 2020, the recorded values of cash and cash equivalents, assets held for sale, prepaid expenses, and accounts payable and other current liabilities approximate their fair values due to the short-term nature of these items. As of December 31, 2020, the carrying value of outstanding SAFEs approximates the estimated aggregate fair value of the instruments as the valuation cap provided in the SAFEs is a reasonable approximation of the Company’s enterprise value. On August 3, 2021, the SAFEs converted into common stock of the post-Merger entity. Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2018-13 as of January 1, 2020 with no impact on the financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 31, 2020 and interim periods within that year. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements or related disclosures. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expenses And Other Current Assets | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3: PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets are comprised of the following: SCHEDULE OF PREPAID EXPENSE AND OTHER CURRENT ASSETS September 30, December 31, 2021 2020 Prepaid insurance $ 1,060,054 $ 6,972 Prepaid research and development 79,980 83,550 Other prepaid expenses 213,190 3,978 Short term deposits 44,445 - Total prepaid expenses and other current assets $ 1,397,669 $ 94,500 |
ACCOUNTS PAYABLE AND OTHER CURR
ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES | NOTE 4: ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES Accounts payable and other current liabilities are comprised of the following: SCHEDULE OF ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES September 30, December 31, 2021 2020 Accounts payable $ 3,340,766 $ 155,957 Accrued employee costs 1,772,122 - Other accrued expenses 355,514 7,025 Accrued research and development 190,218 63,753 Accrued legal fees 121,564 171,630 Deposit - 200,000 Total accounts payable and other current liabilities $ 5,780,184 $ 598,365 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 5: STOCK-BASED COMPENSATION In 2018, Decoy adopted the Decoy Biosystems, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan, pursuant to which the board of directors may grant nonstatutory stock options to purchase shares of the Company’s common stock to outside directors and consultants and either nonstatutory or incentive stock options to purchase shares of the Company’s common stock to employees. In June 2021, the Intec Israel shareholders voted to approve the Indaptus 2021 Stock Incentive Plan, a share option plan for grants to employees, officers, consultants, directors and other service providers, (the “2021 Plan”), that became effective upon the closing of the Merger. The 2021 Plan provides for up to 1,864,963 shares of the Company’s common stock. Immediately after the Merger, all Decoy’s outstanding options under the 2018 Plan were converted to 206,079 options under the 2021 Plan. In addition, immediately after the Merger, all Intec Israel’s outstanding options were converted into 57,701 options of Indaptus under the 2021 Plan. Future awards may be made only under the 2021 Plan. The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, unrestricted stock awards, stock appreciation rights and other forms of stock-based compensation. The 2021 Plan permits the Company’s board to change the type, terms and conditions of awards as circumstances may change. This flexibility to adjust the type of compensation to be granted is particularly important given current economic and world events. On August 4, 2021, Indaptus’ board approved a grant of an aggregate of options to purchase 1,049,750 shares of common stock to Indaptus’ directors, executive officers and employees as follows: SCHEDULE OF OPTIONS GRANTED TO DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Number of options granted Exercise price Vesting period Expiration Executive officers and employees 940,000 $ 8.87 1 3 5 10 Directors 109,750 $ 8.87 1 10 A summary of the stock option activity during the nine months ended September 30, 2021, is presented in the table below: SCHEDULE OF SHARE BASED-COMPANSATION Weighted average Shares Exercise price Remaining contractual life Intrinsic value Outstanding as of January 1, 2021 206,079 $ 2.86 8.2 $ 28,003 Granted 1,049,750 $ 8.87 Options converted upon Merger 57,701 $ 237.10 Forfeited and cancelled (9,175 ) 204.28 Outstanding as of September 30, 2021 1,304,355 $ 16.49 9.2 $ 1,025,114 Exercisable as of September 30, 2021 238,074 $ 41.83 6.9 $ 1,007,439 Vested and expected to vest September 30, 2021 1,301,486 $ 15.49 9.2 $ 1,025,114 The Company recognized stock-based compensation expense of $ 795,338 and $ 39,208 during the three months ended September 30, 2021 and 2020, respectively. The Company recognized stock-based compensation expense of $ 836,456 and $ 116,872 during the nine months ended September 30, 2021, and 2020, respectively. As of September 30, 2021, total compensation cost not yet recognized related to unvested stock options was approximately $ 6.6 million, which is expected to be recognized over a weighted-average period of 2.2 years. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The weighted average inputs used to measure the value of the options granted in August 2021 are presented in the table below. The weighted average grant date fair value of stock option issued during the three and nine months ended September 30, 2021, was $ 8.45 SCHEDULE OF WEIGHTED AVERAGE INPUTS USED TO MEASURE VALUE OF OPTIONS GRANTED August 4, 2021 Stock price $ 8.87 Exercise price $ 8.87 Expected term 5.5 Volatility 103.4 % Risk free rate 0.71 % Dividend yield 0.00 % The following table presents the exercise price of outstanding stock options as of September 30, 2021: SCHEDULE OF EXERCISE PRICE OF OUTSTANDING STOCK OPTIONS Exercise price Options outstanding $ 0.01 8.00 206,079 $ 8.01 16.00 1,049,750 $ 16.00 48,526 Total 1,304,355 Outstanding options, number of outstanding options at the end of period 1,304,355 |
CAPITALIZATION
CAPITALIZATION | 9 Months Ended |
Sep. 30, 2021 | |
Capitalization | |
CAPITALIZATION | NOTE 6: CAPITALIZATION a. In August 2018, Decoy entered into the Series Seed Preferred Stock Purchase Agreement (“Series Seed SPA”), under which 835,928 (“Series Seed Preferred”) shares were purchased in exchange for cash consideration of $ 6.0 million. The purchase price of Series Seed Preferred shares was $ 7.20 per share. In connection with the Merger, all outstanding shares of Series Seed Preferred stock were converted into common stock on August 3, 2021, the date of closing of the Merger. b. Decoy issued a series of SAFEs with accredited investors between December 2019 and April 2021. The total carrying value of the SAFEs was $ 1.4 million as of December 31, 2020, and $ 6.4 million immediately before the Merger. On August 3, 2021, the date of the closing of the Merger, the SAFEs were converted into 766,627 shares of common stock of the Company. As of December 31, 2020, the SAFEs were potentially settleable in cash, and accordingly, the Company presented the instruments as liabilities. c. Pre-funded Warrants and Warrants: (1) Immediately after the Merger, all Intec Israel’s warrants were converted into 227,150 (2) On July 23, 2021, Indaptus entered into a Purchase Agreement with a certain institutional investor, pursuant to which Indaptus agreed to sell and issue, in a Private Placement, Pre-Funded Warrants to purchase 2,727,237 2,727,237 10.99 0.01 11.00 27.3 million, after deducting the placement agent’s fees and other offering expenses payable by Indaptus in the amount of approximately $ 2.7 million. On August 3, 2021, the Private Placement closed and in September 2021, the Pre-Funded Warrant was fully exercised for consideration of $ 27,273 136,364 shares of Indaptus’ common stock at an exercise price of $ 13.75 . The fair value of a warrant to purchase one share of Indaptus’ common stock that was issued to the placement agent was $ 7.16 The following table summarizes the number of warrants outstanding with exercise price and remaining contractual life for the nine-month period ended September 30, 2021: SUMMARY OF WARRANTS OUTSTANDING WITH EXERCISE PRICE AND REMAINING CONTRACTUAL LIFE Weighted average Shares Exercise price Remaining contractual life Outstanding January 1, 2021 - - - Warrants converted upon Merger 227,150 $ 29.8 Warrants issued in the Private Placement 2,863,637 $ 11.1 Outstanding and exercisable as of September 30, 2021 3,090,787 $ 12.5 5.2 As of September 30, 2021, the Company had 200,000,000 shares of common stock authorized and 8,133,243 shares of common stock issued and outstanding. As of December 31, 2020, Decoy had 3,185,224 shares of common stock authorized and 1,944,672 shares of common stock issued and outstanding. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7: COMMITMENTS AND CONTINGENCIES Litigation As of the date of issuance of these consolidated financial statements there were no pending legal proceedings against the Company that are expected to have a material adverse effect on cash flows, financial condition or results of operations. From time to time, the Company could become involved in disputes and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. Leases The Company leases office space under a short-term operating lease agreement that automatically renews for successive three-month periods. Either the Company or the landlord can terminate the lease with 60 days written notice, whereupon the lease agreement termination will be effective the last day of the last three-month extension period. The Company accounts for the lease pursuant to the short-term practical expedient available under ASC 842-20. The Company recognized rent expense of $ 6,701 9,272 19,432 20,159 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8: SUBSEQUENT EVENTS The Company evaluated subsequent events from September 30, 2021, the date of these financial statements, through November 15, 2021, which represents the date the financial statements were issued, for events requiring recognition or disclosure in the financial statements for the period ended September 30, 2021. The Company concluded that no events have occurred that would require recognition or disclosure in the financial statements, except as described below: a. On October 1, 2021, the Company entered into a two -year lease agreement for approximately 1,975 square feet of office space in San Diego, California. The base rent is $ 7,999 per month and the lease term commenced November 1, 2021. b. In October 2021, options to purchase 60,336 shares of common stocks were exercised for consideration of approximately $ 180,000 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and S-X Article 10 for interim financial statements. Accordingly, they do not contain all information and notes required by US GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2021, the consolidated results of operations, changes in stockholders’ equity for the three and nine-month periods ended September 30, 2021, and 2020 and cash flows for the nine-month periods ended September 30, 2021 and 2020. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Decoy’s annual financial statements for the year ended December 31, 2020, and their accompanying notes included in the Form S-4 filed with the SEC in connection with the Merger. The condensed balance sheet data as of December 31, 2020, included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2020, but does not include all disclosures required by US GAAP for annual financial statements. The results for the nine-month period ended September 30, 2021, are not necessarily indicative of the results expected for the year ending December 31, 2021. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of Indaptus and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. The most significant estimates relate to the determination of the fair value of stock-based compensation and the determination of period-end obligations to certain contract research organizations. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates. |
Loss per share | Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of common stock outstanding during the period. Diluted loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options, warrants and pre-funded warrants which are included under the treasury stock method when dilutive. The following stock options, warrants and pre-funded warrants were excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive for the periods presented (share data): SCHEDULE OF ANTI-DILUTIVE SECURITIES Weighted average Three months ended Nine months ended 2021 2020 2021 2020 Outstanding stock options 237,109 206,079 216,461 206,079 Warrants and Pre-funded warrants 3,678,244 - 1,230,589 - |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2021, and December 31, 2020, cash and cash equivalents consist primarily of checking and money market deposits. The Company’s cash balances exceed those that are federally insured; however, the Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. To date, the Company has not recognized any losses caused by uninsured balances. |
Assets held for sale | Assets held for sale In connection with the Merger, the Company determined certain equipment held for use by pre-Merger Intec Israel was no longer useful to the Company’s operations and entered into an agreement with an unrelated party to sell the equipment. The Company recognizes assets held for sale at estimated fair value. The fair value of the equipment as of September 30, 2021, was approximately $ 600,000 based on purchase offers that the unrelated party received from certain buyers in November 2021. |
Property and equipment | Property and equipment Property and equipment assets are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company uses an estimated useful life of three years five years |
Patents | Patents The Company expenses patent costs, including related legal costs, as incurred and records such costs within general and administrative expense in the accompanying consolidated statements of operations. |
Accrued research and development costs | Accrued research and development costs The Company records the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred. These costs are a significant component of the Company’s research and development expenses, with a substantial portion of the Company’s on-going research and development activities conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which services or materials are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset, which will be amortized or expensed as the contracted services are performed. |
Research and development expenses | Research and development expenses Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development expenses consist primarily of fees paid to CROs as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs. |
General and administrative expenses | General and administrative expenses General and administrative expenses include compensation, employee benefits, and stock-based compensation for executive management, finance administration and human resources, facility costs (including rent), professional service fees, and other general overhead costs, including depreciation, to support the Company’s operations. |
Income taxes | Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized in the foreseeable future. As of September 30, 2021, and December 31, 2020, the Company has recorded a full valuation allowance against its deferred tax assets. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses. |
Stock-based compensation | Stock-based compensation The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined using the Black-Scholes-Merton (“Black-Scholes”) option pricing model as of the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis. The Black-Scholes model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of options granted by using the Black-Scholes model with the following assumptions: Expected Volatility Expected Term Risk-Free Interest Rate Dividend Yield The Company has elected to recognize forfeitures as they occur. |
Fair value measurements | Fair value measurements Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company follows the established framework for measuring fair value and providing disclosures about fair value measurements. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Accounting Standards Codification (“ASC”) 820 – Fair Value Measurement requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to estimate fair value, and defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2021 and December 31, 2020, the recorded values of cash and cash equivalents, assets held for sale, prepaid expenses, and accounts payable and other current liabilities approximate their fair values due to the short-term nature of these items. As of December 31, 2020, the carrying value of outstanding SAFEs approximates the estimated aggregate fair value of the instruments as the valuation cap provided in the SAFEs is a reasonable approximation of the Company’s enterprise value. On August 3, 2021, the SAFEs converted into common stock of the post-Merger entity. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2018-13 as of January 1, 2020 with no impact on the financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 31, 2020 and interim periods within that year. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements or related disclosures. |
GENERAL (Tables)
GENERAL (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
General | |
ESTIMATED FAIR VALUE OF ASSETS ACQUIRED | The following table summarizes the net assets acquired based on their estimated fair values as of August 3, 2021, immediately prior to completion of the Merger: ESTIMATED FAIR VALUE OF ASSETS ACQUIRED Cash and cash equivalents $ 16,346,622 Assets held for sale 600,000 Prepaid and other assets 129,791 Accrued liabilities (8,345,966 ) Acquired net assets $ 8,730,447 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ANTI-DILUTIVE SECURITIES | The following stock options, warrants and pre-funded warrants were excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive for the periods presented (share data): SCHEDULE OF ANTI-DILUTIVE SECURITIES Weighted average Three months ended Nine months ended 2021 2020 2021 2020 Outstanding stock options 237,109 206,079 216,461 206,079 Warrants and Pre-funded warrants 3,678,244 - 1,230,589 - |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expenses And Other Current Assets | |
SCHEDULE OF PREPAID EXPENSE AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets are comprised of the following: SCHEDULE OF PREPAID EXPENSE AND OTHER CURRENT ASSETS September 30, December 31, 2021 2020 Prepaid insurance $ 1,060,054 $ 6,972 Prepaid research and development 79,980 83,550 Other prepaid expenses 213,190 3,978 Short term deposits 44,445 - Total prepaid expenses and other current assets $ 1,397,669 $ 94,500 |
ACCOUNTS PAYABLE AND OTHER CU_2
ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES | Accounts payable and other current liabilities are comprised of the following: SCHEDULE OF ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES September 30, December 31, 2021 2020 Accounts payable $ 3,340,766 $ 155,957 Accrued employee costs 1,772,122 - Other accrued expenses 355,514 7,025 Accrued research and development 190,218 63,753 Accrued legal fees 121,564 171,630 Deposit - 200,000 Total accounts payable and other current liabilities $ 5,780,184 $ 598,365 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF OPTIONS GRANTED TO DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES | SCHEDULE OF OPTIONS GRANTED TO DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Number of options granted Exercise price Vesting period Expiration Executive officers and employees 940,000 $ 8.87 1 3 5 10 Directors 109,750 $ 8.87 1 10 |
SCHEDULE OF SHARE BASED-COMPANSATION | A summary of the stock option activity during the nine months ended September 30, 2021, is presented in the table below: SCHEDULE OF SHARE BASED-COMPANSATION Weighted average Shares Exercise price Remaining contractual life Intrinsic value Outstanding as of January 1, 2021 206,079 $ 2.86 8.2 $ 28,003 Granted 1,049,750 $ 8.87 Options converted upon Merger 57,701 $ 237.10 Forfeited and cancelled (9,175 ) 204.28 Outstanding as of September 30, 2021 1,304,355 $ 16.49 9.2 $ 1,025,114 Exercisable as of September 30, 2021 238,074 $ 41.83 6.9 $ 1,007,439 Vested and expected to vest September 30, 2021 1,301,486 $ 15.49 9.2 $ 1,025,114 |
SCHEDULE OF WEIGHTED AVERAGE INPUTS USED TO MEASURE VALUE OF OPTIONS GRANTED | SCHEDULE OF WEIGHTED AVERAGE INPUTS USED TO MEASURE VALUE OF OPTIONS GRANTED August 4, 2021 Stock price $ 8.87 Exercise price $ 8.87 Expected term 5.5 Volatility 103.4 % Risk free rate 0.71 % Dividend yield 0.00 % |
SCHEDULE OF EXERCISE PRICE OF OUTSTANDING STOCK OPTIONS | The following table presents the exercise price of outstanding stock options as of September 30, 2021: SCHEDULE OF EXERCISE PRICE OF OUTSTANDING STOCK OPTIONS Exercise price Options outstanding $ 0.01 8.00 206,079 $ 8.01 16.00 1,049,750 $ 16.00 48,526 Total 1,304,355 Outstanding options, number of outstanding options at the end of period 1,304,355 |
CAPITALIZATION (Tables)
CAPITALIZATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Capitalization | |
SUMMARY OF WARRANTS OUTSTANDING WITH EXERCISE PRICE AND REMAINING CONTRACTUAL LIFE | The following table summarizes the number of warrants outstanding with exercise price and remaining contractual life for the nine-month period ended September 30, 2021: SUMMARY OF WARRANTS OUTSTANDING WITH EXERCISE PRICE AND REMAINING CONTRACTUAL LIFE Weighted average Shares Exercise price Remaining contractual life Outstanding January 1, 2021 - - - Warrants converted upon Merger 227,150 $ 29.8 Warrants issued in the Private Placement 2,863,637 $ 11.1 Outstanding and exercisable as of September 30, 2021 3,090,787 $ 12.5 5.2 |
GENERAL - ESTIMATED FAIR VALUE
GENERAL - ESTIMATED FAIR VALUE OF ASSETS ACQUIRED (Details) | Aug. 03, 2021USD ($) |
General | |
Cash and cash equivalents | $ 16,346,622 |
Assets held for sale | 600,000 |
Prepaid and other assets | 129,791 |
Accrued liabilities | (8,345,966) |
Acquired net assets | $ 8,730,447 |
GENERAL (Details Narrative)
GENERAL (Details Narrative) - USD ($) | Aug. 03, 2021 | Jul. 26, 2021 | Jul. 23, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||||
Accumulated deficit | $ (12,454,565) | $ (7,959,501) | |||
Merger Agreement [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Exchange Ratio in Merger Share Exchange | 2.654353395 | ||||
Indaptus common stock, par value | $ 0.01 | ||||
Indaptus Common stock, shares, outstanding immediately prior to the Merger | 1,858,743 | ||||
Decoy's Capitalization Prior to the Merger [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of Decoy's Common Stock prior to the merger | 732,635 | ||||
Number of Decoy's Common Stock after giving affect to the conversion of Decoy's preferred shares into Decoy Common Stock | 314,928 | ||||
Number of Decoy's preferred stock prior to the merger | 314,928 | ||||
Number of Decoy's Common Stock after giving affect to the conversion of Decoy's SAFE's into Decoy Common Stock | 288,818 | ||||
Conversion of Decoy's Outstanding Shares of Common Stock [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of Decoy's outstanding shares of common stock before the merger | 1,336,381 | ||||
Number of Indaptus shares of common stock issued in the conversion of Decoy's outstanding shares of common stock in the merger transaction | 3,547,227 | ||||
Conversion of Decoy's Outstanding Options [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of Decoy's outstanding options before the merger | 77,639 | ||||
Number of Indaptus stock options issued in the conversion of Decoy's outstanding options in the merger transaction | 206,079 | ||||
Shareholders Equity Post Reverse Share Split [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Intec Israel, Reverse Share Split Conversion Ratio | 1-for-4 | ||||
Market Capitalization amount | $ 17,900,000 | ||||
Estimated fair value of net assets of Indaptus | 8,700,000 | ||||
Private Placement [Member] | Purchase Agreements [Member] | Indaptus [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Total net proceeds from issuance of pre-funded warrants and warrants to purchase Indaptus common stock | $ 27,300,000 | ||||
Issuance expenses | $ 2,700,000 | ||||
Number of warrants issued to the placement agent | 136,364 | ||||
Exercise price of warrant issued to the placement agent | $ 13.75 | ||||
Gross cash proceeds from private placement | $ 30,000,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF ANTI-DILUTIVE SECURITIES (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 237,109 | 206,079 | 216,461 | 206,079 |
Warrant And Prefunded Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 3,678,244 | 1,230,589 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
SignificantAccountingPoliciesLineItems [Line Items] | ||
Assets held for sale | $ 600,000 | |
Property, Plant and Equipment [Member] | Computers And Other Office Equipment [Member] | ||
SignificantAccountingPoliciesLineItems [Line Items] | ||
Estimated useful life | 3 years | |
Property, Plant and Equipment [Member] | Furniture [Member] | ||
SignificantAccountingPoliciesLineItems [Line Items] | ||
Estimated useful life | 5 years |
SCHEDULE OF PREPAID EXPENSE AND
SCHEDULE OF PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Prepaid Expenses And Other Current Assets | ||
Prepaid insurance | $ 1,060,054 | $ 6,972 |
Prepaid research and development | 79,980 | 83,550 |
Other prepaid expenses | 213,190 | 3,978 |
Short term deposits | 44,445 | |
Total prepaid expenses and other current assets | $ 1,397,669 | $ 94,500 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 3,340,766 | $ 155,957 |
Accrued employee costs | 1,772,122 | |
Other accrued expenses | 355,514 | 7,025 |
Accrued research and development | 190,218 | 63,753 |
Accrued legal fees | 121,564 | 171,630 |
Deposit | 200,000 | |
Total accounts payable and other current liabilities | $ 5,780,184 | $ 598,365 |
SCHEDULE OF OPTIONS GRANTED TO
SCHEDULE OF OPTIONS GRANTED TO DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES (Details) - $ / shares | Aug. 04, 2021 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options granted | 1,049,750 | 1,049,750 |
Executive Officers and Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options granted | 940,000 | |
Exercise price | $ 8.87 | |
Executive Officers and Employees [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Expiration | 5 years | |
Executive Officers and Employees [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Expiration | 10 years | |
Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options granted | 109,750 | |
Exercise price | $ 8.87 | |
Vesting period | 1 year | |
Expiration | 10 years |
SCHEDULE OF SHARE BASED-COMPANS
SCHEDULE OF SHARE BASED-COMPANSATION (Details) - USD ($) | Aug. 04, 2021 | Sep. 30, 2021 |
Share-based Payment Arrangement [Abstract] | ||
Outstanding at beginning of the period | 206,079 | |
Outstanding at beginning of the period, Exercise price | $ 2.86 | |
Outstanding at beginning of the period, Weighted average remaining contractual life | 8 years 2 months 12 days | |
Outstanding at beginning of the period, Intrinsic value | $ 28,003 | |
Granted | 1,049,750 | 1,049,750 |
Granted, exercise price | $ 8.87 | |
Options converted upon merger | 57,701 | |
Options converted upon merger, Exercise price | $ 237.10 | |
Forfeited and cancelled | (9,175) | |
Forfeited and cancelled, exercise price | $ 204.28 | |
Outstanding at end of period | 1,304,355 | |
Outstanding at end of period, Exercise price | $ 16.49 | |
Outstanding at end of period, Weighted average remaining contractual life | 9 years 2 months 12 days | |
Outstanding at end of period, intrinsic value | $ 1,025,114 | |
Exercisable at end of period | 238,074 | |
Exercisable at end of period, Exercise price | $ 41.83 | |
Exercisable at end of period, Weighted average remaining contractual life | 6 years 10 months 24 days | |
Exercisable at end of period, intrinsic value | $ 1,007,439 | |
Vested and expected to vest | 1,301,486 | |
Vested and expected to vest, Exercise price | $ 15.49 | |
Vested and expected to vest, Weighted average remaining contractual life | 9 years 2 months 12 days | |
Vested and expected to vest, intrinsic value | $ 1,025,114 |
SCHEDULE OF WEIGHTED AVERAGE IN
SCHEDULE OF WEIGHTED AVERAGE INPUTS USED TO MEASURE VALUE OF OPTIONS GRANTED (Details) | Aug. 04, 2021$ / shares |
Share-based Payment Arrangement [Abstract] | |
Stock Price | $ 8.87 |
Exercise price | $ 8.87 |
Expected term | 5 years 6 months |
Volatility rate | 103.40% |
Risk-free rate | 0.71% |
Dividend yield | 0.00% |
SCHEDULE OF EXERCISE PRICE OF O
SCHEDULE OF EXERCISE PRICE OF OUTSTANDING STOCK OPTIONS (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding options, number of outstanding options at the end of period | shares | 1,304,355 |
Exercise Price Range One [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding options, number of outstanding options at the end of period | shares | 206,079 |
Exercise price range lower range limit | $ 0.01 |
Exercise price range upper range limit | $ 8 |
Exercise Price Range Two [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding options, number of outstanding options at the end of period | shares | 1,049,750 |
Exercise price range lower range limit | $ 8.01 |
Exercise price range upper range limit | $ 16 |
Exercise Price Range Three [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding options, number of outstanding options at the end of period | shares | 48,526 |
Exercise price range lower range limit | $ 16 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Aug. 04, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted | 1,049,750 | 1,049,750 | ||||
Share-based Payment Arrangement, Expense | $ 795,338 | $ 39,208 | $ 836,456 | $ 116,872 | ||
Compensation cost not yet recognized related to unvested stock options | $ 6,600,000 | $ 6,600,000 | ||||
Weighted-average period over which unrecognized compensation expense is expected to be recognized | 2 years 2 months 12 days | |||||
Weighted average grant date fair value of options granted | $ 8.45 | $ 8.45 | ||||
2021 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,864,963 | |||||
Conversion of Decoy's outstanding options to Indaptus' options under 2021 Plan | 206,079 | |||||
Conversion of Intec Israel's outstanding options to Indaptus' options under 2021 Plan | 57,701 |
SUMMARY OF WARRANTS OUTSTANDING
SUMMARY OF WARRANTS OUTSTANDING WITH EXERCISE PRICE AND REMAINING CONTRACTUAL LIFE (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Beginning balance, Warrant Outstanding | shares | |
Weighted Average Exercise Price | $ / shares | |
Warrants converted upon Merger | shares | 227,150 |
Warrants converted upon Merger, Exercise price | $ / shares | $ 29.8 |
Warrants issued in the Private Placement | shares | 2,863,637 |
Warrants issued in the Private Placement, Exercise price | $ / shares | $ 11.1 |
Ending balance, Warrant Outstanding | shares | 3,090,787 |
Weighted Average Exercise Price | $ / shares | $ 12.5 |
Weighted average, Remaining contractual life | 5 years 2 months 12 days |
CAPITALIZATION (Details Narrati
CAPITALIZATION (Details Narrative) - USD ($) | Aug. 03, 2021 | Jul. 23, 2021 | Sep. 30, 2021 | Aug. 31, 2018 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Common Stock, Shares Authorized | 200,000,000 | 3,185,224 | |||
Common Stock, Shares, Outstanding | 8,133,243 | 1,944,672 | |||
Private Placement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Number of pre-funded warrants issued | 2,727,237 | ||||
Number of warrants issued | 2,727,237 | ||||
Purchase price | $ 10.99 | ||||
Pre-funded warrant, exercise price | 0.01 | ||||
Warrants, exercise price | $ 11 | ||||
Total net proceeds from issuance of pre-funded warrants and warrants to purchase Indaptus common stock | $ 27,300,000 | ||||
Issuance expenses | $ 2,700,000 | ||||
Proceeds from exercise of pre-funded warrants | $ 27,273 | ||||
Warrants issued to the placement agent | 136,364 | ||||
Exercise price of warrant issued to the placement agent | $ 13.75 | ||||
Fair value of a warrant that was issued to the placement agent | $ 7.16 | ||||
Conversion Of Intec Israels Warrants To Indaptus Warrants [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Warrants converted upon Merger | 227,150 | ||||
Series Seed Preferred Stock Purchase Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Series seed preferred shares purchased | 835,928 | ||||
Series seed preferred shares purchased amount | $ 6,000,000 | ||||
Purchase price | $ 7.20 | ||||
Simple Agreements For Future Equity [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Carrying Value of Shares Issued | $ 6,400,000 | $ 1,400,000 | |||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 766,627 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rental expense | $ 6,701 | $ 9,272 | $ 19,432 | $ 20,159 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | 1 Months Ended | |
Oct. 31, 2021USD ($)shares | Oct. 01, 2021USD ($)ft² | |
Exercise of Options [Member] | ||
Subsequent Event [Line Items] | ||
Number of options exercised | shares | 60,336 | |
Proceeds from exercise of options | $ 180,000 | |
Lease Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Lease term | 2 years | |
Area of Land | ft² | 1,975 | |
Lessee operating lease not yet commenced base rent | $ 7,999 |