Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 17, 2023 | Feb. 25, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-15070 | ||
Entity Registrant Name | RegeneRx Biopharmaceuticals, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 52-1253406 | ||
Entity Address, Address Line One | 15245 Shady Grove Road, Suite 470 | ||
Entity Address, City or Town | Rockville | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 20850 | ||
City Area Code | 301 | ||
Local Phone Number | 208-9191 | ||
Title of 12(b) Security | Common | ||
Trading Symbol | RGRX | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 16 | ||
Entity Common Stock, Shares Outstanding | 143,549,735 | ||
Entity Central Index Key | 0000707511 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | CohnReznick LLP | ||
Auditor Firm ID | 596 | ||
Auditor Location | Tysons, Virginia |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 290,890 | $ 1,231,608 |
Prepaid expenses and other current assets | 16,029 | 19,932 |
Total current assets | 306,919 | 1,251,540 |
Operating lease right-of-use asset | 69,506 | 27,673 |
Other assets | 5,752 | 5,752 |
Total assets | 382,177 | 1,284,965 |
Current liabilities | ||
Accounts payable | 63,804 | 63,634 |
Unearned revenue | 76,761 | 76,761 |
Accrued expenses | 369,723 | 261,729 |
Current portion of operating lease liability | 43,385 | 27,809 |
Total current liabilities | 553,673 | 429,933 |
Long-term liabilities | ||
Unearned revenue | 1,871,041 | 1,947,802 |
Operating lease liability | 30,178 | 0 |
Convertible promissory notes, net | 1,372,756 | 1,137,109 |
Total liabilities | 3,827,648 | 3,514,844 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Preferred stock, $.001 par value per share, 1,000,000 shares authorized; no shares issued | 0 | 0 |
Common stock, par value $.001 per share, 300,000,000 shares authorized, 143,549,735 issued and outstanding at December 31, 2022 and 2021 | 143,550 | 143,550 |
Additional paid-in capital | 108,628,147 | 108,116,284 |
Accumulated deficit | (112,217,168) | (110,489,713) |
Total stockholders' deficit | (3,445,471) | (2,229,879) |
Total liabilities and stockholders' deficit | $ 382,177 | $ 1,284,965 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 143,549,735 | 143,549,735 |
Common stock, shares outstanding | 143,549,735 | 143,549,735 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statements of Operations | ||
Revenues | $ 76,761 | $ 76,761 |
Operating expenses | ||
Research and development | 0 | 6,638 |
General and administrative | 1,478,752 | 1,398,634 |
Total operating expenses | 1,478,752 | 1,405,272 |
Loss from operations | (1,401,991) | (1,328,511) |
Other income (expense) | ||
Gain on forgiveness of PPP loan | 0 | 55,400 |
Interest income | 183 | 234 |
Interest expense | (325,647) | (324,878) |
Total other expense | (325,464) | (269,244) |
Loss before income taxes | (1,727,455) | (1,597,755) |
Provision for income taxes | 0 | 0 |
Net loss | (1,727,455) | (1,597,755) |
Deemed dividend related to warrants down round provision | 0 | 0 |
Net loss attributable to common stockholders | $ (1,727,455) | $ (1,597,755) |
Basic net loss per common share | $ (0.01) | $ (0.01) |
Diluted net loss per common share | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - basic | 143,549,735 | 138,592,666 |
Weighted average number of common shares outstanding - diluted | 143,549,735 | 138,592,666 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Deficit - USD ($) | Common stock | Additional paid-in capital | Accumulated deficit | Total |
Balance at Dec. 31, 2020 | $ 133,442 | $ 105,934,572 | $ (108,891,958) | $ (2,823,944) |
Balance (Shares) at Dec. 31, 2020 | 133,441,788 | |||
Private offering of common stock and warrants, net of issuance costs (Shares) | 9,900,000 | |||
Private offering of common stock and warrants, net of issuance costs (values) | $ 9,900 | 1,749,188 | 0 | 1,759,088 |
Issuance of common stock - option exercises (in value) | $ 105 | 21,945 | 0 | $ 22,050 |
Issuance of common stock - option exercises (in shares) | 105,000 | 105,000 | ||
Issuance of common stock - warrant exercises | $ 103 | 12,765 | 0 | $ 12,868 |
Issuance of common stock - warrant exercises (in shares) | 102,947 | |||
Stock-based compensation expense | $ 0 | 397,814 | 0 | 397,814 |
Net loss | 0 | 0 | (1,597,755) | (1,597,755) |
Balance at Dec. 31, 2021 | $ 143,550 | 108,116,284 | (110,489,713) | $ (2,229,879) |
Balance (Shares) at Dec. 31, 2021 | 143,549,735 | |||
Issuance of common stock - option exercises (in shares) | 0 | |||
Stock-based compensation expense | $ 0 | 511,863 | 0 | $ 511,863 |
Net loss | 0 | 0 | (1,727,455) | (1,727,455) |
Balance at Dec. 31, 2022 | $ 143,550 | $ 108,628,147 | $ (112,217,168) | $ (3,445,471) |
Balance (Shares) at Dec. 31, 2022 | 143,549,735 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | ||
Net loss | $ (1,727,455) | $ (1,597,755) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 511,863 | 397,814 |
Non-cash interest expense | 235,647 | 234,878 |
Gain on forgiveness of PPP loan | 0 | (55,400) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 3,903 | 29,977 |
Accounts payable | 170 | 24,314 |
Accrued expenses | 107,994 | 52,872 |
Net change in ROU asset and liability | 3,921 | (234) |
Unearned revenue | (76,761) | (76,762) |
Net cash used in operating activities | (940,718) | (990,296) |
Financing activities: | ||
Proceeds from private offering of common stock and warrants, net of issuance costs | 0 | 1,759,088 |
Proceeds from the exercise of stock options | 0 | 22,050 |
Proceeds from the exercise of stock warrants | 0 | 12,868 |
Net cash provided by financing activities | 0 | 1,794,006 |
Net (decrease) increase in cash and cash equivalents | (940,718) | 803,710 |
Cash and cash equivalents at beginning of year | 1,231,608 | 427,898 |
Cash and cash equivalents at end of year | 290,890 | 1,231,608 |
Supplemental Disclosure of Non-Cash Operating and Financing Activities | ||
Establishment of right-of-use asset | 81,565 | 0 |
Establishment of operating lease liability | $ 81,565 | $ 0 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND BUSINESS | |
ORGANIZATION AND BUSINESS | 1. ORGANIZATION AND BUSINESS Organization and Nature of Operations. RegeneRx Biopharmaceuticals, Inc. (“RegeneRx”, the “Company”, “We”, “Us”, “Our”), a Delaware corporation, was incorporated in 1982. We are focused on the discovery and development of novel molecules to accelerate tissue and organ repair. Our operations are confined to one business segment: the development and marketing of product candidates based on Thymosin Beta 4 (“Tß4”), an amino acid peptide. Management Plans to Address Operating Conditions. Our strategy is aimed at being capital efficient while leveraging our portfolio of clinical assets by seeking strategic relationships with organizations with clinical development capabilities including development capital. Currently, we have active partnerships in four major territories: North America, Europe, China and Pan Asia. In each case, the cost of development is being borne by our partners with no financial obligation for RegeneRx. We still have significant clinical assets to develop, primarily RGN-352 (injectable formulation of Tß4 for cardiac and CNS disorders) in the U.S., Pan Asia, and Europe, and RGN-259 in the EU. Our goal is to wait until satisfactory results are obtained from the current ophthalmic clinical program in the U.S. before moving into the EU. However, we intend to continue to develop RGN-352, our injectable systemic product candidate for cardiac and central nervous system indications, either by obtaining grants to fund a Phase 2a clinical trial in the cardiovascular or central nervous system fields or finding a suitable partner with the resources and capabilities to develop it as we have with RGN-259. Since inception, and through December 31, 2022, we have an accumulated deficit of approximately $112.2 million and we had cash and cash equivalents of $290,890 as of December 31, 2022. We anticipate incurring additional operating losses in the future as we continue to explore the potential clinical benefits of Tß4 based product candidates over multiple indications. We have entered into a series of strategic partnerships under licensing and joint venture agreements where our partners are responsible for advancing development of our product candidates by sponsoring multiple clinical trials. On June 30, 2021, we closed a private placement of common stock and warrants with several institutional investors, including members of management and the board, and received gross proceeds of $1,980,000. At present, we believe that we will have sufficient cash to fund planned operations only into the second quarter of 2023. We will need substantial additional funds in order to significantly advance development of our unlicensed programs and expect to temporarily or permanently curtail our operations at some point in the second quarter of 2023 if we cannot raise additional equity or debt capital. Accordingly, we will continue to evaluate opportunities to raise additional capital and are in the process of exploring various alternatives, including, without limitation, a public or private placement of our securities, debt financing, corporate collaboration and licensing arrangements, mergers, or the sale of our Company or certain of our intellectual property rights. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business. Although we intend to continue to seek additional financing or additional strategic partners, we may not be able to complete a financing or corporate transaction, either on favorable terms or at all. If we are unable to complete a financing or strategic transaction, we may not be able to continue as a going concern after our funds have been exhausted, and we could be required to significantly curtail or cease operations, file for bankruptcy, or liquidate and dissolve. There can be no assurance that we will be able to obtain any sources of funding. In the event the Company is able to raise limited funds, it may use those funds to explore strategic options including but not limited to a sale of its assets, a merger or a reverse stock split transaction. If the Company conducts a reverse stock split transaction and thus meets the requirements to suspend its obligations to file periodic reports with the SEC under the Exchange Act, the Company’s common stock would cease being listed on any stock exchange and there would be no market for the Company’s common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be forced to take any such actions. In addition to our current operational requirements, we continually refine our operating strategy and evaluate alternative clinical uses of Tß4. However, substantial additional resources will be needed before we will be able to achieve sustained profitability. Consequently, we continually evaluate alternative sources of financing such as the sharing of development costs through strategic collaboration agreements. There can be no assurance that our financing efforts will be successful and, if we are not able to obtain sufficient levels of financing, we would delay certain clinical and/or research activities and our financial condition would be materially and adversely affected. Even if we are able to obtain sufficient funding, other factors including competition, dependence on third parties, uncertainty regarding patents, protection of proprietary rights, manufacturing of peptides, and technology obsolescence could have a significant impact on us and our operations. To achieve profitability, we, and/or a partner, must successfully conduct pre-clinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market those pharmaceuticals we wish to commercialize. The time required to reach profitability is highly uncertain, and there can be no assurance that we will be able to achieve sustained profitability, if at all. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates. Cash and Cash Equivalents. Concentration of Credit Risk. Property and Equipment. two Impairment of Long-lived Assets. Convertible Notes with Detachable Warrants. Debt with Conversion and Other Options Revenue Recognition. performance or straight-line method. We recognize revenue using the relative performance method provided that we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and such performance obligations are provided on a best-efforts basis. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the relative performance method, as of each reporting period. The Company’s contracts with customers may at times include multiple promises to transfer products and services. Contracts with multiple promises are analyzed to determine whether the promises, which may include a license together with performance obligations such as providing a clinical supply of product and steering committee services, are distinct and should be accounted for as separate performance obligations or whether they must be accounted for as a single performance obligation. The Company accounts for individual performance obligations separately if they are distinct. Determining whether products and services are considered distinct performance obligations may require significant judgment. If we cannot reasonably estimate when our performance obligation either ceases or becomes inconsequential and perfunctory, then revenue is deferred until we can reasonably estimate when the performance obligation ceases or becomes inconsequential. Revenue is then recognized over the remaining estimated period of performance. Whenever the Company determines that an arrangement should be accounted for as a combined performance obligation, we must determine the period over which the performance obligation will be performed and when revenue will be recognized. Revenue is recognized using either a relative performance or straight-line method. We recognize revenue using the relative performance method provided that we can reasonably estimate the level of effort required to complete our performance obligation under an arrangement and such performance obligation is provided on a best-efforts basis. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the relative performance method, as of each reporting period. If the Company cannot reasonably estimate the level of effort required to complete our performance obligation under an arrangement, the performance obligation is provided on a best-efforts basis and we can reasonably estimate when the performance obligation ceases or the remaining obligations become inconsequential and perfunctory, then the total payments under the arrangement, excluding royalties and payments contingent upon achievement of substantive milestones, would be recognized as revenue on a straight-line basis over the period we expect to complete our performance obligations. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line basis, as of the period ending date. At the inception of each arrangement that includes development milestone payments, the Company evaluates the probability of reaching the milestones and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore revenue recognized is constrained as management is unable to assert that a reversal of revenue would not be possible. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Amounts received prior to satisfying the above revenue recognition criteria are recorded as unearned revenue in our accompanying balance sheets. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. Contract assets represent a conditional right to consideration for satisfied performance obligations that becomes a billed receivable when the conditions are satisfied. There were no contract assets as of December 31, 2022 and 2021. Contract liabilities result from arrangements where we have received payment in advance of performance under the contract. Changes in contract liabilities are generally due to either receipt of additional advance payments or our performance under the contract. We have the following amounts recorded for contract liabilities: December 31 2022 2021 2020 Unearned revenue $ 1,947,802 $ 2,024,563 $ 2,101,325 The contract liabilities amount disclosed above are primarily related to revenue being recognized on a straight-line basis over periods ranging from 23 to 30 years, which, in management’s judgment, is the best measure of progress towards satisfying the performance obligations and represents the Company’s best estimate of the period of the obligation. Revenue recognized from contract liabilities during the years ended December 31, 2022 and 2021, totaled $76,761 and $76,761, respectively. Revenue is expected to be recognized in the future from contract liabilities as the related performance obligations are satisfied. Variable Interest Entities. Because the Company is not obligated to fund the Joint Venture and has not provided any financial support and has no commitment to provide financial support in the future to the Joint Venture, the carrying value of its investment in the Joint Venture is zero at both December 31, 2022 and 2021. As a result, the Company is not recognizing its share (38.5%) of the Joint Venture’s operating losses and will not recognize any such losses until the Joint Venture produces net income (as opposed to net losses) and at that point the Company will reduce its share of the Joint Venture’s net income by its share of previously suspended net losses. As of December 31, 2022, because it has not provided any financial support, the Company has no financial exposure as a result of its variable interest in the Joint Venture. Research and Development Patent Costs. Income Taxes. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making that assessment. We recorded a full valuation allowance against all estimated net deferred tax assets at December 31, 2022 and 2021. We recognize 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. Our policy for recording interest and penalties associated with audits is that penalties and interest expense are recorded in provision for income taxes in our statements of operations. We have significant net operating loss carryforwards to potentially reduce future federal and state taxable income, and research and experimentation tax credit carryforwards available to potentially offset future federal and state income taxes. Use of our net operating loss and research and experimentation credit carryforwards may be limited due to changes in our ownership as defined within Section 382 of the Internal Revenue Code. Net Loss Per Common Share. Share-Based Compensation. Fair Value of Financial Instruments. Adopted accounting standards. Simplifying the Accounting for Income Taxes Impact of recently issued accounting standards. Financial Instruments - Credit Losses The Company has evaluated all other issued and unadopted ASUs and believes the adoption of these standards will not have a material impact on its results of operations, financial position or cash flows. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: ● Level 1 — Quoted prices in active markets for identical assets and liabilities. ● Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities. ● Level 3 — Unobservable inputs. As of December 31, 2022 and 2021, our only qualifying assets that required measurement under the foregoing fair value hierarchy were money market funds included in cash and cash equivalents valued at $200,032 and $1,118,906, respectively, using Level 1 inputs. |
LICENSES, INTELLECTUAL PROPERTY
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | |
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | 4. LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS We have filed numerous additional patent applications covering various compositions, uses, formulations and other components of Tß4, as well as to novel peptides resulting from our research efforts. Some of these patents have been issued, while many patent applications are still pending. We have also entered into an agreement with a university under the terms of which we have received an exclusive license to technology and intellectual property. The agreement, which is generally cancelable by us, provided for the payment of a license issue fee and/or minimum annual payments. The initial license fee of $25,000 was paid in 2010 and no minimum fees were due for the year ended December 31, 2011. Beginning in 2012, minimum annual maintenance fees are $5,000 annually which was paid in 2012 but has not been paid since. In addition, the agreements provide for payments upon the achievement of certain milestones in product development. The agreement also requires us to fund certain costs associated with the filing and prosecution of patent applications. In February 2013, this agreement was amended to include additional technology and intellectual property. The expanded license does not require payment of an initial license fee or additional annual maintenance fees but will be subject to payments upon the achievement of certain milestones for a product developed under the amended license of the additional technology and intellectual property. In 2012, we entered into a license agreement (the “Agreement”) with Lee’s Pharmaceutical (HK) Limited (“Lee’s”), headquartered in Hong Kong, for the license of Thymosin Beta 4 in any pharmaceutical form, including our RGN-259, RGN-352 and RGN-137 product candidates, in China, Hong Kong, Macau and Taiwan. Under the Agreement, we are eligible to receive milestone payments and royalties, ranging from low double digit to high single digit percentages of any commercial sales of the licensed products. Lee’s will pay for all developmental costs associated with each product candidate. We will provide Tß4 to Lee’s at no charge for a Phase 2 ophthalmic clinical trial and will provide Tß4 to Lee’s for all other developmental and clinical work at a price equal to our cost. We will also have the right to exclusively license any improvements made by Lee’s to RegeneRx’s products outside of the licensed territory. Lee’s paid us $200,000 upon signing of a term sheet in March 2012, and Lee’s paid us an additional $200,000 upon signing of the definitive license agreement. The Company is accounting for the license agreement as a revenue arrangement. Since participation in the joint development committee is required, it was deemed to be a material promise. Management has concluded that the participation in the joint development committee is not distinct from other promised goods and services. The Company evaluated the promised goods and services under the agreement and determined that there was one combined performance obligation representing a series of distinct goods and services including the license to research, develop and commercialize Tß4 in any pharmaceutical form and participation in the joint development committee. To date, management has not been able to reasonably measure the outcome of the performance obligation, but still expects to recover the costs incurred in satisfying the performance obligation. Accordingly, the Company has deferred all revenue until such time that it can reasonably measure the outcome of the performance obligation or until the performance obligation becomes onerous. As of December 31, 2022 and 2021, we have unearned revenue totaling $400,000 pursuant to this Agreement. Revenue will be recognized for future royalty payments as they are earned. In February 2019, the license agreement was amended and assigned by Lee’s to their affiliate, Zhaoke Ophthalmology Pharmaceutical Limited. There are no economic changes to the Agreement. On March 7, 2014, we entered into license agreements with HLBT. The two Licensing Agreements are for the license of territorial rights to two of our Thymosin Beta 4-based products candidates, RGN-259 and RGN-137. Under the license agreement for RGN-259, our preservative-free eye drop product candidate, HLBT will have the right to develop and commercialize RGN-259 in Asia (excluding China, Hong Kong, Taiwan, and Macau). The rights will be exclusive in Korea, Japan, Australia, New Zealand, Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Mongolia, Myanmar (Burma), Philippines, Singapore, Thailand, Vietnam, and Kazakhstan, and semi-exclusive in India, Pakistan, Bangladesh, Bhutan, Maldives, Nepal, Sri Lanka, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, collectively, the Territory (the “259 Territory”). Under the 259 license agreement we are eligible to receive aggregate potential milestone payments of up to $3.5 million. In addition, we are eligible to receive royalties of a low double digit percentage of any commercial sales of the licensed product sold by HLBT in the 259 Territory. Under the license agreement for RGN-137, our topical dermal gel product candidate, HLBT will have the exclusive right to develop and commercialize RGN-137 in the U.S. (the “137 Territory”). Under the 137 agreement we are eligible to receive aggregate potential milestone payments of up to $3.5 million. In addition, we are eligible to receive royalties of a low double digit percentage of any commercial sales of the Company’s licensed product sold by HLBT in the 137 Territory. In August 2017, we amended the license agreement for RGN-137 held by HLBT. Under the amendment, the 137 Territory was expanded to include Europe, Canada, South Korea, Australia and Japan. Under the agreement, the Company received a series of non-refundable payments and is entitled to receive royalties on the future sales of products. The Company is accounting for the license agreement as a revenue arrangement. Since participation in the joint development committee is required, it was deemed to be a material promise. Management has concluded that the participation in the joint development committee is not distinct from other promised goods and services. The Company evaluated the promised goods and services under the agreement and determined that there was one combined performance obligation representing a series of distinct goods and services including the license to research, develop and commercialize RGN-137 and participation in the joint development committee. Revenue is being recognized on a straight-line basis over a period of 23 years, which, in management’s judgment, is the best measure of progress towards satisfying the performance obligation and represents the Company’s best estimate of the period of the obligation. As of December 31, 2022 and 2021, we have unearned revenue totaling $614,493 and $649,275, respectively, pursuant to this agreement. Revenue will be recognized for future royalty payments as they are earned. Each license agreement contains diligence provisions that require the initiation of certain clinical trials within certain time periods that, if not met, would result in the loss of rights or exclusivity in certain countries. HLBT will pay for all developmental costs associated with each product candidate. We have the right to exclusively license any improvements made by HLBT to our products outside of the licensed territory on a royalty free basis. The two firms have created a joint development committee and continue to discuss the development of the licensed products and share information relating thereto. Both companies will also share all non-clinical and clinical data and other information related to development of the licensed product candidates. On January 28, 2015, the Company entered into the Joint Venture Agreement with HLBT, a shareholder in the Company. The Joint Venture Agreement provides for the creation of the Joint Venture, jointly owned by the Company and HLBT, which is commercializing RGN-259 for treatment of dry eye and neurotrophic keratitis in the U.S. and Canada. HLBT is solely responsible for funding all the product development and commercialization efforts of the Joint Venture. HLBT made an initial contribution of $3 million in cash and received an initial equity stake of 51%. RegeneRx’s ownership interest in ReGenTree was reduced to 38.5% when the Clinical Study Report was filed for the Phase 2/3 dry eye clinical trial. Based on when, and if, certain additional development milestones are achieved in the U.S. with RGN-259, our equity ownership may be incrementally reduced to between 38.5% and 25%, with 25% being the final equity ownership upon approval of a BLA in the U.S. In addition to our equity ownership, RegeneRx retains a royalty on net sales that varies between single and low double digits, depending on whether commercial sales are made by ReGenTree or a licensee. In the event ReGenTree is acquired or there is a change of control that occurs following achievement of a BLA, RegeneRx shall be entitled to a minimum of 40% of all proceeds paid or payable and will forgo any future royalties. The Company is not required or otherwise obligated to provide financial support to the Joint Venture. The Joint Venture is responsible for executing all development and commercialization activities under the license agreement, which activities will be directed by a joint development committee comprised of representatives of the Company and HLBT. The license agreement has a term that extends to the later of the expiration of the last patent covered by the agreement or 25 years from the first commercial sale under the agreement. The license agreement may be earlier terminated if the Joint Venture fails to meet certain commercialization milestones, if either party breaches the license agreement and fails to cure such breach, as a result of government action that limits the ability of the Joint Venture to commercialize the product, as a result of a challenge to a licensed patent, following termination of the license between the Company and certain agencies of the United States federal government, or upon the bankruptcy of either party. Under the license agreement, the Company received $1.0 million in up-front payments and is entitled to receive royalties on the Joint Venture’s future sales of products. On April 6, 2016, we received $250,000 from ReGenTree and executed an amendment to the license agreement on April 28, 2016. Under the amendment the territorial rights were expanded to include Canada. The Company is accounting for the license agreement with the Joint Venture as a revenue arrangement. Since participation in the joint development committee is required, it was deemed to be a material promise. Management has concluded that the participation in the joint development committee is not distinct from other promised goods and services. The Company evaluated the promised goods and services under the license agreements and determined that there was one combined performance obligation representing a series of distinct goods and services including the license to research, develop and commercialize RGN-259 and participation in the joint development committee. Revenue is being recognized on a straight-line basis over a period of 30 years, which, in management’s judgment, is the best measure of progress towards satisfying the performance obligation and represents the Company’s best estimate of the period of the obligation. As of December 31, 2022 and 2021, we have unearned revenue totaling $933,309 and $975,288, respectively, pursuant to this agreement. Revenue will be recognized for future royalty payments as they are earned. |
COMPOSITION OF CERTAIN FINANCIA
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 12 Months Ended |
Dec. 31, 2022 | |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 5. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Prepaid expenses and other current assets are comprised of the following: December 31, 2022 2021 Prepaid insurance $ 10,028 $ 6,071 Other 6,001 13,861 $ 16,029 $ 19,932 Accrued expenses are comprised of the following: December 31, 2022 2021 Accrued professional fees $ 3,443 $ 2,765 Accrued other 31,578 28,951 Accrued compensation 36,274 21,585 Accrued interest - convertible debt 298,428 208,428 $ 369,723 $ 261,729 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 6. EMPLOYEE BENEFIT PLANS In 2022 and 2021, the Company provided health and dental insurance to an employee under a group plan. No retirement plan was in place for 2022 or 2021. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE NOTES | |
CONVERTIBLE NOTES | 7. CONVERTIBLE NOTES 2019 Convertible Notes In February 2019, we sold a series of convertible promissory notes to management, the Company’s Board of Directors and accredited investors including Essetifin S.p.A., our largest stockholder. The sale of the notes resulted in gross proceeds to the Company of $1,300,000 over two closings (the “2019 Notes”). The first closing in the amount of $650,000 occurred in February 2019 and the second closing, also in the amount of $650,000, occurred on May 13, 2019 after the Company provided notice of the enrollment of the first patent in the ARISE-3 clinical trial in DES sponsored by ReGenTree. The 2019 Notes will mature on March 1, 2024. The 2019 Notes bear interest at a rate of five percent (5%) per annum and are convertible into shares of our common stock at a conversion price of twelve cents ($0.12) per share (subject to adjustment as described in the 2019 Notes) at any time prior to repayment, at the election of the investors. In the aggregate, the 2019 Notes issued in both closings are convertible into up to 10,833,333 shares of our common stock excluding interest. At any time prior to maturity of the 2019 Notes, with the consent of the holders of a majority in interest of the 2019 Notes, we can prepay the outstanding principal amount of the 2019 Notes plus unpaid accrued interest without penalty. The outstanding principal and all accrued interest on the 2019 Notes will accelerate and automatically become immediately due and payable upon the occurrence of certain events of default. In connection with the issuance of the 2019 Notes we also issued warrants to each investor. The warrants are exercisable for an aggregate of 8,125,000 shares of common stock with an exercise price of eighteen cents ($0.18) per share for a period of five years (the “2019 Warrants”). The relative fair value of the 2019 Warrants issued was $348,443 calculated using the Black-Scholes-Merton valuation model value of $0.06 with an expected and contractual life of five years, an assumed volatility of 67.86%, and a risk-free interest rate of 2.49%. The 2019 Warrants are classified in equity. The Company allocated $348,443 of the gross proceeds to the warrants, on a relative fair value basis. In addition, because the effective conversion price of the 2019 Notes was less than the fair value of the underlying common stock on the issuance date, we allocated $348,443, the intrinsic value of that feature to additional paid-in capital. The debt discount created by the 2019 Warrants and beneficial conversion feature is amortized over the term of the 2019 Notes as additional interest expense using the effective interest method. The affiliated investors and the principal amount of their respective 2019 Notes purchase are as set forth below: Investor Note Principal Essetifin S.p.A. $ 1,000,000 Joseph C. McNay $ 25,000 J.J. Finkelstein $ 25,000 Mauro Bove $ 10,000 Allan L. Goldstein $ 5,000 R. Don Elsey $ 5,000 Essetifin S.p.A., our largest stockholder. The other listed investors are members of our Board of Directors including Mr. Finkelstein, who serves as our CEO, and Dr. Goldstein who serves as our Chief Scientific Advisor and Chairman of our Board of Directors. 2020 Convertible Notes In October 2020, we sold a series of convertible promissory notes to management, the Company’s Board of Directors and accredited investors including Essetifin S.p.A., our largest stockholder. The sale of the notes resulted in gross proceeds to the Company of $500,000 (the “2020 Notes”). The 2020 Notes will mature on October 15, 2025. The 2020 Notes bear interest at a rate of five percent (5%) per annum and are convertible into shares of our common stock at a conversion price of thirty-six cents ($0.36) per share (subject to adjustment as described in the 2020 Notes) at any time prior to repayment, at the election of the investors. In the aggregate, the 2020 Notes are convertible into up to 1,391,982 shares of our common stock excluding interest. At any time prior to maturity of the 2020 Notes, with the consent of the holders of a majority in interest of the 2020 Notes, we can prepay the outstanding principal amount of the 2020 Notes plus unpaid accrued interest without penalty. The outstanding principal and all accrued interest on the 2020 Notes will accelerate and automatically become immediately due and payable upon the occurrence of certain events of default. In connection with the issuance of the 2020 Notes we also issued warrants to each investor. The warrants are exercisable for an aggregate of 1,043,988 shares of common stock with an exercise price of forty-five cents ($0.45) per share for a period of five years (the “2020 Warrants”). The relative fair value of the 2020 Warrants issued was $176,573 calculated using the Black-Scholes-Merton valuation model value of $0.26 with an expected and contractual life of five years, an assumed volatility of 74.6%, and a risk-free interest rate of 0.32%. The 2020 Warrants are classified in equity. The Company allocated $176,573 of the gross proceeds to the warrants, on a relative fair value basis. In addition, because the effective conversion price of the 2020 Notes was less than the fair value of the underlying common stock on the issuance date, we allocated $289,045, the intrinsic value of that feature to additional paid-in capital. The debt discount created by the 2020 Warrants and beneficial conversion feature is amortized over the term of the 2020 Notes as additional interest expense using the effective interest method. The affiliated investors and the principal amount of their respective 2020 Notes purchase are as set forth below: Investor Note Principal Essetifin S.p.A. $ 400,000 J.J. Finkelstein $ 10,000 Mauro Bove $ 10,000 Allan L. Goldstein $ 5,000 The Company recorded interest expense and discount accretion as set forth below: For the years ended December 31, 2022 December 31, 2021 2019 Notes $ 207,045 $ 206,274 2020 Notes 118,602 118,604 Total interest expense $ 325,647 $ 324,878 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 8. STOCKHOLDERS’ EQUITY Common Stock On June 28, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with investors and existing stockholders and members of management of the Company (the “Investors”). The Company closed the transactions contemplated under the Purchase Agreement on June 30, 2021. Pursuant to the terms of the Purchase Agreement, the Company sold an aggregate of 9,900,000 shares of its common stock (the “Shares”) to investors at a price of $0.20 per share, for gross proceeds of $1,980,000 before offering expenses (the “Private Placement”). As part of the Private Placement, the Company also issued to investors, for no additional consideration, Series A Warrants to purchase 7,425,000 shares of common stock (the “Warrant Shares”) at an exercise price of $0.24 per share with a two five two five Registration Rights Agreements. The Registration Rights Agreements usually require us to pay penalties for any failure or time delay in filing or maintaining the effectiveness of the required registration statements. These penalties are usually expressed as a fixed percentage, per month, of the original amount we received on issuance of the common shares, options or warrants. While to date we have not incurred any penalties under these agreements, if a penalty is determined to be probable, we would recognize the amount as a contingent liability and not as a derivative instrument. Share-Based Compensation. Stock Option and Incentive Plans. We have previously adopted two equity incentive plans, known as the 2000 Equity Incentive Plan, or the 2000 Plan, and the 2010 Equity Incentive Plan, or the 2010 Plan. Both the 2000 Plan and the 2010 Plan have a term of ten years, with the 2000 Plan already expired and the 2010 Plan expired in July 2020. No further awards may be granted under the 2010 Plan with the approval of the 2018 Plan. All outstanding option awards granted under the 2010 Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such option awards and the terms of the 2010 Plan. Shares remaining available for issuance under the shares reserved under the 2010 Plan will not be subject to future awards under the 2018 Plan, and shares subject to outstanding awards under the 2010 Plan that are terminated or forfeited in the future will not be subject to future awards under the 2018 Plan. All outstanding option awards granted under the 2000 Plan have expired. The following summarizes share-based compensation expense for the years ended December 31, 2022 and 2021, which was allocated as follows: December 31, 2022 2021 General and administrative $ 511,863 $ 397,814 $ 511,863 $ 397,814 The following summarizes stock option activity for the years ended December 31, 2022 and 2021: Options Outstanding Weighted average Shares available for Exercise price exercise grants Number of shares range price December 31, 2020 4,148,966 11,951,250 $ 0.16 - 0.64 $ 0.28 2018 Plan additions 2,868,936 — — — Grants (2,605,000) 2,605,000 0.28 0.28 Exercises — (105,000) 0.21 0.21 Expirations 2010 Plan — (2,075,000) 0.16 - 0.21 0.21 December 31, 2021 4,412,902 12,376,250 0.19 - 0.64 0.29 2018 Plan additions 2,870,995 — — — Grants (3,105,000) 3,105,000 0.19 - 0.27 0.19 Expirations 2010 Plan — (1,707,500) 0.19 - 0.40 0.33 December 31, 2022 4,178,897 13,773,750 $ 0.19 - 0.64 $ 0.27 Vested and expected to vest at December 31, 2022 13,265,540 Exercisable at December 31, 2022 9,990,000 The following summarizes information about stock options outstanding at December 31, 2022: Weighted Average Weighted Average Remaining Aggregate Number of Shares Exercise Price Contractual Life Intrinsic Value Options Outstanding, December 31, 2021 12,376,250 $ 0.29 Granted 3,105,000 $ 0.19 Exercised — $ — Forfeited (1,707,500) $ 0.33 Options Outstanding, December 31, 2022 13,773,750 $ 0.27 7.0 years $ — Vested and unvested but expected to vest, December 31, 2022 13,265,540 $ 0.27 7.0 years $ — Exercisable at December 31, 2022 9,990,000 $ 0.28 6.3 years $ — Determining the Fair Value of Options. forward-looking range of assumptions to value each stock option granted to employees, directors and consultants during the years ended December 31, 2022 and 2021: 2022 2021 Dividend yield 0.0 % 0.0 % Risk-free rate of return 1.61-2.96 % 0.71 % Expected life in years 5.88 5.88 Volatility 87.95-90.43 % 87.68 % Forfeiture rate 2.6 % 2.6 % Our dividend yield assumption is based on the fact that we have never paid cash dividends and do not anticipate paying cash dividends in the foreseeable future. Our risk-free interest rate assumption is based on yields of U.S. Treasury notes in effect at the date of grant. Our expected life represents the period of time that options granted are expected to be outstanding and is calculated in accordance with the Securities and Exchange Commission (“SEC”) guidance provided in the SEC’s Staff Accounting Bulletin (“SAB”) 107 and SAB 110, using a “simplified” method. The Company has used the simplified method and will continue to use the simplified method as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate an expected term. Our volatility assumption is based on reviews of the historical volatility of our common stock. Using Black-Scholes and these factors, the weighted average fair value of stock options granted to employees and directors was $0.15 and $0.20 for the years ended December 31, 2022 and 2021, respectively. We do not record tax-related effects on stock-based compensation given our historical and anticipated operating experience and offsetting changes in our deferred income tax valuation allowance which fully reserves against our deferred tax assets. The following table summarizes our warrant activity for 2022 and 2021: Warrants Outstanding Weighted average Number of Exercise price exercise shares range price December 31, 2020 9,529,288 $ 0.125 - 0.45 $ 0.21 Issuances 16,118,750 0.24 - 0.28 0.26 Exercises (102,947) 0.13 0.13 Forfeitures (257,353) 0.37 0.37 December 31, 2021 25,287,738 0.18 - 0.45 0.24 December 31, 2022 25,287,738 $ 0.18 - 0.45 $ 0.24 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The Company’s provision for income taxes consists of the following for the years ended December 31, 2022 and 2021: 2022 2021 Current income tax provision (benefit): Federal $ — $ — State — — Foreign — — Total — — Deferred income tax provision (benefit): Federal (237,000) (202,000) State (75,000) (63,000) Foreign — — Total (312,000) (265,000) Change in valuation allowance 312,000 265,000 Total provision (benefit) for income taxes $ — $ — Significant components of the Company’s deferred tax assets at December 31, 2022 and 2021 and related valuation allowances are presented below: Year ended December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 14,502,000 $ 14,266,000 Research and experimentation credit carryforwards 2,265,000 2,269,000 Charitable contribution carryforwards 3,000 3,000 Accrued expenses, deferred revenue and other 580,000 547,000 Share-based compensation 894,000 847,000 18,244,000 17,932,000 Less - valuation allowance (18,244,000) (17,932,000) Net deferred tax assets $ — $ — At December 31, 2022, we had net operating loss carryforwards for Federal income tax purposes of approximately $52.7 million and research and research and experimental tax credit carryforwards of approximately $2.3 million, which are available to offset future federal income. Approximately $47.9 million of the net operating loss carryforwards, generated prior to 2018, expires in increments through 2037, while carryforwards generated in 2018 or later do not expire. Section 382 of the Internal Revenue Code (“Section 382”) imposes substantial restrictions on the utilization of net operating losses and tax credits in the event of a corporation’s ownership change. During 2009, the Company completed a preliminary study to compute any limits on the net operating losses and credit carryforwards for purposes of Section 382. It was determined that the Company experienced a cumulative change in ownership, as defined by the regulations, in 2002. This change in ownership triggers an annual limitation on the Company’s ability to utilize certain U.S. federal and state net operating loss carryforwards and research tax credit carryforwards, resulting in the potential loss of approximately $9.8 million of net operating loss carryforwards and $0.2 million in research credit carryforwards. The Company has reduced the deferred tax assets associated with these carryforwards in its balance sheets. The Company believes that the future use of net operating losses and tax credits presented above may be further reduced as a result of additional ownership changes subsequent to 2009. The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate for the years ended December 31, 2022 and 2021, due to the following: 2022 2021 US Federal statutory rate 21.00 % 21.00 % State income tax, net of Federal benefit 6.52 % 6.52 % Share-based compensation (5.46) % (5.27) % Permanent differences and other (4.01) % (5.68) % Change in valuation allowance (18.05) % (16.57) % 0.00 % 0.00 % As discussed in Note 2, we recognize the effect of income tax positions only if those positions are more likely than not of being sustained. At December 31, 2022 and 2021, we had no gross unrecognized tax benefits. We do not expect any significant changes in unrecognized tax benefits over the next 12 months. In addition, we did not recognize any interest or penalties related to uncertain tax positions at December 31, 2022 and 2021. The 2008 through 2022 tax years generally remain subject to examination by federal and most state tax authorities. In addition, we would remain open to examination for earlier years if we were to utilize net operating losses or tax credit carryforwards that originated prior to 2012. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 10. LEASES In July 2022, we amended our office lease agreement, and the term has been extended through July 2024. During the extended term, our rental payments will be approximately $4,500 per month. We had previously amended the office lease to extend through July 2022. Our facility lease is our only existing lease as of December 31, 2022 and is classified as an operating lease. The discount rate used in the calculation of our lease liability is approximately 20%, which is based on our estimate of the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does not provide an implicit rate. The following table summarizes the Company’s recognition of its operating lease as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Assets Operating lease right-of-use asset $ 69,506 $ 27,673 Total lease assets $ 69,506 $ 27,673 Liabilities Current portion of operating lease liability $ 43,385 $ 27,809 Long-term portion of operating lease liability 30,178 — Total lease liabilities $ 73,563 $ 27,809 Rent expense, consisting of minimum operating lease payments and variable lease payments for pass through items such as common area maintenance and real estate taxes for the years ended December 31, 2022 and 2021 is recorded as general and administrative expense and consisted of the following: 2022 2021 Operating lease cost $ 50,592 $ 50,671 Variable lease costs 9,098 1,216 Total lease costs $ 59,690 $ 51,887 A maturity analysis of our operating lease minimum lease payments follows: 2023 $ 54,301 2024 32,223 Total undiscounted cash flows 86,524 Less: imputed interest (12,961) Total lease liability $ 73,563 |
PROMISSORY NOTE
PROMISSORY NOTE | 12 Months Ended |
Dec. 31, 2022 | |
PROMISSORY NOTE | |
PROMISSORY NOTE | 11. PROMISORY NOTE On April 24, 2020, the Company entered into a Promissory Note (the “Loan”) with PNC Bank (the “Bank”) pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. The principal amount of the Loan is $55,400. In accordance with the requirements of the CARES Act, the Company used the proceeds from the Loan in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the Loan at the rate of 1.00% per annum. The Company applied for forgiveness of amount due under the Loan, in an amount equal to the sum of qualified expenses under the PPP, which include payroll costs, rent obligations, and covered utility payments incurred during the forgiveness period following disbursement of the Loan. In April 2021, the Company filed the required documents with the Bank related to forgiveness of the Loan and in July 2021, the Company received a Notice of Paycheck Protection Program Forgiveness Payment stating that the Bank had received payment from the U.S. Small Business Administration on July 9, 2021. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS | |
COMMITMENTS | 12. COMMITMENTS Employment Continuity Agreements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates. | Use of Estimates. |
Cash and Cash Equivalents. | Cash and Cash Equivalents. |
Concentration of Credit Risk. | Concentration of Credit Risk. |
Property and Equipment. | Property and Equipment. two |
Impairment of Long-lived Assets. | Impairment of Long-lived Assets. |
Convertible Notes with Detachable Warrants. | Convertible Notes with Detachable Warrants. Debt with Conversion and Other Options |
Revenue Recognition. | Revenue Recognition. performance or straight-line method. We recognize revenue using the relative performance method provided that we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and such performance obligations are provided on a best-efforts basis. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the relative performance method, as of each reporting period. The Company’s contracts with customers may at times include multiple promises to transfer products and services. Contracts with multiple promises are analyzed to determine whether the promises, which may include a license together with performance obligations such as providing a clinical supply of product and steering committee services, are distinct and should be accounted for as separate performance obligations or whether they must be accounted for as a single performance obligation. The Company accounts for individual performance obligations separately if they are distinct. Determining whether products and services are considered distinct performance obligations may require significant judgment. If we cannot reasonably estimate when our performance obligation either ceases or becomes inconsequential and perfunctory, then revenue is deferred until we can reasonably estimate when the performance obligation ceases or becomes inconsequential. Revenue is then recognized over the remaining estimated period of performance. Whenever the Company determines that an arrangement should be accounted for as a combined performance obligation, we must determine the period over which the performance obligation will be performed and when revenue will be recognized. Revenue is recognized using either a relative performance or straight-line method. We recognize revenue using the relative performance method provided that we can reasonably estimate the level of effort required to complete our performance obligation under an arrangement and such performance obligation is provided on a best-efforts basis. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the relative performance method, as of each reporting period. If the Company cannot reasonably estimate the level of effort required to complete our performance obligation under an arrangement, the performance obligation is provided on a best-efforts basis and we can reasonably estimate when the performance obligation ceases or the remaining obligations become inconsequential and perfunctory, then the total payments under the arrangement, excluding royalties and payments contingent upon achievement of substantive milestones, would be recognized as revenue on a straight-line basis over the period we expect to complete our performance obligations. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line basis, as of the period ending date. At the inception of each arrangement that includes development milestone payments, the Company evaluates the probability of reaching the milestones and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore revenue recognized is constrained as management is unable to assert that a reversal of revenue would not be possible. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Amounts received prior to satisfying the above revenue recognition criteria are recorded as unearned revenue in our accompanying balance sheets. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. Contract assets represent a conditional right to consideration for satisfied performance obligations that becomes a billed receivable when the conditions are satisfied. There were no contract assets as of December 31, 2022 and 2021. Contract liabilities result from arrangements where we have received payment in advance of performance under the contract. Changes in contract liabilities are generally due to either receipt of additional advance payments or our performance under the contract. We have the following amounts recorded for contract liabilities: December 31 2022 2021 2020 Unearned revenue $ 1,947,802 $ 2,024,563 $ 2,101,325 The contract liabilities amount disclosed above are primarily related to revenue being recognized on a straight-line basis over periods ranging from 23 to 30 years, which, in management’s judgment, is the best measure of progress towards satisfying the performance obligations and represents the Company’s best estimate of the period of the obligation. Revenue recognized from contract liabilities during the years ended December 31, 2022 and 2021, totaled $76,761 and $76,761, respectively. Revenue is expected to be recognized in the future from contract liabilities as the related performance obligations are satisfied. |
Variable Interest Entities. | Variable Interest Entities. Because the Company is not obligated to fund the Joint Venture and has not provided any financial support and has no commitment to provide financial support in the future to the Joint Venture, the carrying value of its investment in the Joint Venture is zero at both December 31, 2022 and 2021. As a result, the Company is not recognizing its share (38.5%) of the Joint Venture’s operating losses and will not recognize any such losses until the Joint Venture produces net income (as opposed to net losses) and at that point the Company will reduce its share of the Joint Venture’s net income by its share of previously suspended net losses. As of December 31, 2022, because it has not provided any financial support, the Company has no financial exposure as a result of its variable interest in the Joint Venture. |
Research and Development. | Research and Development |
Patent Costs. | Patent Costs. |
Income Taxes. | Income Taxes. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making that assessment. We recorded a full valuation allowance against all estimated net deferred tax assets at December 31, 2022 and 2021. We recognize 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. Our policy for recording interest and penalties associated with audits is that penalties and interest expense are recorded in provision for income taxes in our statements of operations. We have significant net operating loss carryforwards to potentially reduce future federal and state taxable income, and research and experimentation tax credit carryforwards available to potentially offset future federal and state income taxes. Use of our net operating loss and research and experimentation credit carryforwards may be limited due to changes in our ownership as defined within Section 382 of the Internal Revenue Code. |
Net Loss Per Common Share. | Net Loss Per Common Share. |
Share-Based Compensation. | Share-Based Compensation. |
Fair Value of Financial Instruments. | Fair Value of Financial Instruments. |
Adopted accounting standards and Impact of recently issued accounting standards. | Adopted accounting standards. Simplifying the Accounting for Income Taxes Impact of recently issued accounting standards. Financial Instruments - Credit Losses The Company has evaluated all other issued and unadopted ASUs and believes the adoption of these standards will not have a material impact on its results of operations, financial position or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of contract liabilities | We have the following amounts recorded for contract liabilities: December 31 2022 2021 2020 Unearned revenue $ 1,947,802 $ 2,024,563 $ 2,101,325 |
COMPOSITION OF CERTAIN FINANC_2
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | |
Schedule of prepaid expenses and other current assets | December 31, 2022 2021 Prepaid insurance $ 10,028 $ 6,071 Other 6,001 13,861 $ 16,029 $ 19,932 |
Schedule of accrued expenses | December 31, 2022 2021 Accrued professional fees $ 3,443 $ 2,765 Accrued other 31,578 28,951 Accrued compensation 36,274 21,585 Accrued interest - convertible debt 298,428 208,428 $ 369,723 $ 261,729 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE NOTES | |
Schedule of recorded interest expense and discount accretion | For the years ended December 31, 2022 December 31, 2021 2019 Notes $ 207,045 $ 206,274 2020 Notes 118,602 118,604 Total interest expense $ 325,647 $ 324,878 |
2019 Notes | |
CONVERTIBLE NOTES | |
Schedule of principal amount of their respective notes purchase | The affiliated investors and the principal amount of their respective 2019 Notes purchase are as set forth below: Investor Note Principal Essetifin S.p.A. $ 1,000,000 Joseph C. McNay $ 25,000 J.J. Finkelstein $ 25,000 Mauro Bove $ 10,000 Allan L. Goldstein $ 5,000 R. Don Elsey $ 5,000 |
2020 Notes | |
CONVERTIBLE NOTES | |
Schedule of principal amount of their respective notes purchase | The affiliated investors and the principal amount of their respective 2020 Notes purchase are as set forth below: Investor Note Principal Essetifin S.p.A. $ 400,000 J.J. Finkelstein $ 10,000 Mauro Bove $ 10,000 Allan L. Goldstein $ 5,000 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
Schedule of share-based compensation expense | December 31, 2022 2021 General and administrative $ 511,863 $ 397,814 $ 511,863 $ 397,814 |
Summary of stock option activity | Options Outstanding Weighted average Shares available for Exercise price exercise grants Number of shares range price December 31, 2020 4,148,966 11,951,250 $ 0.16 - 0.64 $ 0.28 2018 Plan additions 2,868,936 — — — Grants (2,605,000) 2,605,000 0.28 0.28 Exercises — (105,000) 0.21 0.21 Expirations 2010 Plan — (2,075,000) 0.16 - 0.21 0.21 December 31, 2021 4,412,902 12,376,250 0.19 - 0.64 0.29 2018 Plan additions 2,870,995 — — — Grants (3,105,000) 3,105,000 0.19 - 0.27 0.19 Expirations 2010 Plan — (1,707,500) 0.19 - 0.40 0.33 December 31, 2022 4,178,897 13,773,750 $ 0.19 - 0.64 $ 0.27 Vested and expected to vest at December 31, 2022 13,265,540 Exercisable at December 31, 2022 9,990,000 |
Schedule of the Company's stock options | Weighted Average Weighted Average Remaining Aggregate Number of Shares Exercise Price Contractual Life Intrinsic Value Options Outstanding, December 31, 2021 12,376,250 $ 0.29 Granted 3,105,000 $ 0.19 Exercised — $ — Forfeited (1,707,500) $ 0.33 Options Outstanding, December 31, 2022 13,773,750 $ 0.27 7.0 years $ — Vested and unvested but expected to vest, December 31, 2022 13,265,540 $ 0.27 7.0 years $ — Exercisable at December 31, 2022 9,990,000 $ 0.28 6.3 years $ — |
Schedule of forward-looking range of assumptions to value the stock options issue | 2022 2021 Dividend yield 0.0 % 0.0 % Risk-free rate of return 1.61-2.96 % 0.71 % Expected life in years 5.88 5.88 Volatility 87.95-90.43 % 87.68 % Forfeiture rate 2.6 % 2.6 % |
Summary of warrant activity | Warrants Outstanding Weighted average Number of Exercise price exercise shares range price December 31, 2020 9,529,288 $ 0.125 - 0.45 $ 0.21 Issuances 16,118,750 0.24 - 0.28 0.26 Exercises (102,947) 0.13 0.13 Forfeitures (257,353) 0.37 0.37 December 31, 2021 25,287,738 0.18 - 0.45 0.24 December 31, 2022 25,287,738 $ 0.18 - 0.45 $ 0.24 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of provision for income taxes | 2022 2021 Current income tax provision (benefit): Federal $ — $ — State — — Foreign — — Total — — Deferred income tax provision (benefit): Federal (237,000) (202,000) State (75,000) (63,000) Foreign — — Total (312,000) (265,000) Change in valuation allowance 312,000 265,000 Total provision (benefit) for income taxes $ — $ — |
Schedule of components of the Company's deferred tax assets related valuation allowances | Year ended December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 14,502,000 $ 14,266,000 Research and experimentation credit carryforwards 2,265,000 2,269,000 Charitable contribution carryforwards 3,000 3,000 Accrued expenses, deferred revenue and other 580,000 547,000 Share-based compensation 894,000 847,000 18,244,000 17,932,000 Less - valuation allowance (18,244,000) (17,932,000) Net deferred tax assets $ — $ — |
Schedule of provision for income taxes on earnings subject to income taxes differs from the statutory federal rate | 2022 2021 US Federal statutory rate 21.00 % 21.00 % State income tax, net of Federal benefit 6.52 % 6.52 % Share-based compensation (5.46) % (5.27) % Permanent differences and other (4.01) % (5.68) % Change in valuation allowance (18.05) % (16.57) % 0.00 % 0.00 % |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of company's recognition of its operating lease | December 31, 2022 December 31, 2021 Assets Operating lease right-of-use asset $ 69,506 $ 27,673 Total lease assets $ 69,506 $ 27,673 Liabilities Current portion of operating lease liability $ 43,385 $ 27,809 Long-term portion of operating lease liability 30,178 — Total lease liabilities $ 73,563 $ 27,809 |
Schedule of minimum operating lease payments and variable lease payments | 2022 2021 Operating lease cost $ 50,592 $ 50,671 Variable lease costs 9,098 1,216 Total lease costs $ 59,690 $ 51,887 |
Schedule of maturity operating lease payment | 2023 $ 54,301 2024 32,223 Total undiscounted cash flows 86,524 Less: imputed interest (12,961) Total lease liability $ 73,563 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) | 12 Months Ended | ||
Jun. 28, 2021 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
ORGANIZATION AND BUSINESS | |||
Number of operating segments | segment | 1 | ||
Accumulated deficit | $ 112,217,168 | $ 110,489,713 | |
Cash and cash equivalents | $ 290,890 | $ 1,231,608 | |
Gross proceeds issuance of private placement | $ 1,980,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of contract liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Unearned revenue | $ 1,947,802 | $ 2,024,563 | $ 2,101,325 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Impairment losses | $ 0 | $ 0 |
Contract assets | 0 | 0 |
Revenue recognized from contract liabilities | 76,761 | 76,761 |
Investments in joint ventures | $ 0 | $ 0 |
Percentage of joint venture operating loss used In share calculation | 38.50% | |
Income tax examination, likelihood of unfavorable settlement | greater than 50% | |
Potentially dilutive securities | 51,286,803 | 49,889,304 |
Share-based compensation | $ 511,863 | $ 397,814 |
Debt instrument, interest rate, effective percentage | 5% | |
Maximum | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Property and equipment, useful life | 5 years | |
Management judgement period of obligation | 30 years | |
Minimum | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Property and equipment, useful life | 2 years | |
Management judgement period of obligation | 23 years |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
FAIR VALUE MEASUREMENTS | ||
Money market funds included in cash and cash equivalents | $ 200,032 | $ 1,118,906 |
LICENSES, INTELLECTUAL PROPER_2
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |||||
Apr. 06, 2016 | Mar. 31, 2012 | Dec. 31, 2022 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2021 | |
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Cost of goods and services sold | $ 25,000 | |||||
Annual maintenance fees on technology and intellectual property | $ 5,000 | |||||
Unearned revenue | $ 1,871,041 | $ 1,947,802 | ||||
Initial contribution received In related to joint venture | $ 3,000,000 | |||||
Initial equity stake | 51% | |||||
Description of equity ownership interest | RegeneRx’s ownership interest in ReGenTree was reduced to 38.5% when the Clinical Study Report was filed for the Phase 2/3 dry eye clinical trial. Based on when, and if, certain additional development milestones are achieved in the U.S. with RGN-259, our equity ownership may be incrementally reduced to between 38.5% and 25%, with 25% being the final equity ownership upon approval of a BLA in the U.S. In addition to our equity ownership, RegeneRx retains a royalty on net sales that varies between single and low double digits, depending on whether commercial sales are made by ReGenTree or a licensee. In the event ReGenTree is acquired or there is a change of control that occurs following achievement of a BLA, RegeneRx shall be entitled to a minimum of 40% of all proceeds paid or payable and will forgo any future royalties. | |||||
Additional proceeds from license fees received | $ 1,000,000 | |||||
Revenue, judgment | Revenue is being recognized on a straight-line basis over a period of 30 years | |||||
Maximum | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Management judgement period of obligation | 30 years | |||||
Minimum | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Management judgement period of obligation | 23 years | |||||
ReGen Tree | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Proceeds from royalties received | $ 250,000 | |||||
Unearned revenue | $ 933,309 | 975,288 | ||||
Management judgement period of obligation | 30 years | |||||
Percentage of proceeds paid or payable | 40% | |||||
RGN-259 Agreement | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Milestone payments | $ 3,500,000 | |||||
RGN-137 Agreement | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Unearned revenue | 614,493 | 649,275 | ||||
Milestone payments | $ 3,500,000 | |||||
Management judgement period of obligation | 23 years | |||||
Lees Pharmaceutical | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Proceeds from royalties received | $ 200,000 | |||||
Definitive License Agreement | ||||||
LICENSES, INTELLECTUAL PROPERTY, AND RELATED PARTY TRANSACTIONS | ||||||
Proceeds from royalties received | $ 200,000 | |||||
Unearned revenue | $ 400,000 | $ 400,000 |
COMPOSITION OF CERTAIN FINANC_3
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS - Prepaid expenses and other current assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ||
Prepaid insurance | $ 10,028 | $ 6,071 |
Other | 6,001 | 13,861 |
Prepaid expenses and other current assets | $ 16,029 | $ 19,932 |
COMPOSITION OF CERTAIN FINANC_4
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS - Accrued expenses (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ||
Accrued professional fees | $ 3,443 | $ 2,765 |
Accrued other | 31,578 | 28,951 |
Accrued compensation | 36,274 | 21,585 |
Accrued interest - convertible debt | 298,428 | 208,428 |
Accrued expenses, total | $ 369,723 | $ 261,729 |
CONVERTIBLE NOTES - Principal a
CONVERTIBLE NOTES - Principal amount and number of shares of common stock issuable upon exercise of warrants (Details) | Dec. 31, 2022 USD ($) |
Essetifin S.p.A. | 2020 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | $ 400,000 |
Essetifin S.p.A. | 2019 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 1,000,000 |
Joseph C. McNay | 2019 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 25,000 |
J.J. Finkelstein | 2020 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 10,000 |
J.J. Finkelstein | 2019 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 25,000 |
Mauro Bove | 2020 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 10,000 |
Mauro Bove | 2019 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 10,000 |
Allan L. Goldstein | 2020 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 5,000 |
Allan L. Goldstein | 2019 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | 5,000 |
R. Don Elsey | 2019 Notes | |
CONVERTIBLE NOTES | |
Principal amount of respective notes purchase | $ 5,000 |
CONVERTIBLE NOTES - Recorded in
CONVERTIBLE NOTES - Recorded interest expense and discount accretion (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONVERTIBLE NOTES | ||
Total interest expense | $ 325,647 | $ 324,878 |
Two Thousand Nineteen Notes [Member] | ||
CONVERTIBLE NOTES | ||
Total interest expense | 207,045 | 206,274 |
Two Thousand Twenty Notes [Member] | ||
CONVERTIBLE NOTES | ||
Total interest expense | $ 118,602 | $ 118,604 |
CONVERTIBLE NOTES - Additional
CONVERTIBLE NOTES - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
May 13, 2019 USD ($) | Oct. 31, 2020 USD ($) $ / shares shares | Feb. 28, 2019 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) Y $ / shares shares | |
First closing | Two Thousand Nineteen Notes [Member] | ||||
CONVERTIBLE NOTES | ||||
Proceeds from convertible debt | $ 650,000 | |||
Second Closing | Two Thousand Nineteen Notes [Member] | ||||
CONVERTIBLE NOTES | ||||
Proceeds from convertible debt | $ 650,000 | |||
2019 Convertible Notes | ||||
CONVERTIBLE NOTES | ||||
Number of shares of common stock purchased | shares | 8,125,000 | |||
Warrants exercisable price of common stock | $ / shares | $ 0.18 | |||
Warrants issued of related fair value | $ 348,443 | |||
Fair value of warrant per share | $ / shares | $ 0.06 | |||
Gross proceeds from issuance of warrants | $ 348,443 | |||
Intrinsic value of conversion allocated to additional paid up capital | $ 348,443 | |||
2019 Convertible Notes | Price volatility | Black Scholes | ||||
CONVERTIBLE NOTES | ||||
Warrants exercisable for a period | 67.86 | |||
2019 Convertible Notes | Expected term | Black Scholes | ||||
CONVERTIBLE NOTES | ||||
Warrants exercisable for a period | Y | 5 | |||
2019 Convertible Notes | Risk free interest rate | Black Scholes | ||||
CONVERTIBLE NOTES | ||||
Warrants exercisable for a period | 2.49 | |||
2019 Convertible Notes | Two Thousand Nineteen Notes [Member] | ||||
CONVERTIBLE NOTES | ||||
Proceeds from convertible debt | $ 1,300,000 | |||
Debt instrument maturity date | The 2019 Notes will mature on March 1, 2024 | |||
Debt instrument interest rate at percentage | 5% | |||
Debt instrument convertible price | $ / shares | $ 0.12 | |||
Debt convertible into common stock shares issued | shares | 10,833,333 | |||
2020 Convertible Notes | ||||
CONVERTIBLE NOTES | ||||
Number of shares of common stock purchased | shares | 1,043,988 | |||
Warrants exercisable price of common stock | $ / shares | $ 0.45 | |||
Warrants issued of related fair value | $ 176,573 | |||
Fair value of warrant per share | $ / shares | $ 0.26 | |||
Gross proceeds from issuance of warrants | $ 176,573 | |||
Intrinsic value of conversion allocated to additional paid up capital | $ 289,045 | |||
2020 Convertible Notes | Price volatility | Black Scholes | ||||
CONVERTIBLE NOTES | ||||
Warrants exercisable for a period | 74.6 | |||
2020 Convertible Notes | Expected term | Black Scholes | ||||
CONVERTIBLE NOTES | ||||
Warrants exercisable for a period | Y | 5 | |||
2020 Convertible Notes | Risk free interest rate | Black Scholes | ||||
CONVERTIBLE NOTES | ||||
Warrants exercisable for a period | 0.32 | |||
2020 Convertible Notes | Two Thousand Twenty Notes [Member] | ||||
CONVERTIBLE NOTES | ||||
Proceeds from convertible debt | $ 500,000 | |||
Debt instrument interest rate at percentage | 5% | |||
Debt instrument convertible price | $ / shares | $ 0.36 | |||
Debt convertible into common stock shares issued | shares | 1,391,982 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock (Details) - USD ($) | Jun. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 12, 2021 | Oct. 27, 2021 |
STOCKHOLDERS' EQUITY | |||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 301,000,000 | 201,000,000 | |
Gross proceeds issuance of private placement | $ 1,980,000 | ||||
Securities purchase agreement | Series A Warrants | |||||
STOCKHOLDERS' EQUITY | |||||
Number of shares of common stock purchased | 7,425,000 | ||||
Exercise price | $ 0.24 | ||||
Term of warrant | 2 years | ||||
Securities purchase agreement | Series A Warrants | Placement Agent | |||||
STOCKHOLDERS' EQUITY | |||||
Number of shares of common stock purchased | 634,375 | ||||
Exercise price | $ 0.24 | ||||
Term of warrant | 2 years | ||||
Securities purchase agreement | Series B Warrants | |||||
STOCKHOLDERS' EQUITY | |||||
Number of shares of common stock purchased | 7,425,000 | ||||
Exercise price | $ 0.28 | ||||
Term of warrant | 5 years | ||||
Securities purchase agreement | Series B Warrants | Placement Agent | |||||
STOCKHOLDERS' EQUITY | |||||
Number of shares of common stock purchased | 634,375 | ||||
Exercise price | $ 0.28 | ||||
Term of warrant | 5 years | ||||
Common stock | Securities purchase agreement | |||||
STOCKHOLDERS' EQUITY | |||||
Aggregate shares sold | 9,900,000 | ||||
Share price | $ 0.20 | ||||
Common stock | Private Placement | Securities purchase agreement | |||||
STOCKHOLDERS' EQUITY | |||||
Gross proceeds issuance of private placement | $ 1,980,000 | ||||
Common stock | Private Placement | Securities purchase agreement | Investors | |||||
STOCKHOLDERS' EQUITY | |||||
Gross proceeds issuance of private placement | $ 0 |
STOCKHOLDERS' EQUITY - Summary
STOCKHOLDERS' EQUITY - Summary of share-based compensation expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | ||
Share-based compensation | $ 511,863 | $ 397,814 |
General and administrative | ||
STOCKHOLDERS' EQUITY | ||
Share-based compensation | $ 511,863 | $ 397,814 |
STOCKHOLDERS' EQUITY - Summar_2
STOCKHOLDERS' EQUITY - Summary of stock option activity (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2022 | Jul. 01, 2021 | |
STOCKHOLDERS' EQUITY | ||||
Shares available for grant, Beginning | 4,412,902 | 4,148,966 | ||
Shares available for grant, 2018 plan approved | 2,870,995 | 2,868,936 | 2,870,995 | 2,868,936 |
Shares available for grant, Grants | (3,105,000) | (2,605,000) | ||
Shares available for grant, Ending | 4,178,897 | 4,412,902 | ||
Number of shares, Beginning | 12,376,250 | 11,951,250 | ||
Number of shares, Granted | 3,105,000 | 2,605,000 | ||
Number of shares, Exercises | 0 | (105,000) | ||
Number of shares, Expirations 2010 Plan | (1,707,500) | (2,075,000) | ||
Number of shares, Ending | 13,773,750 | 12,376,250 | ||
Vested and expected to vest at December 31, 2021 | 13,265,540 | |||
Exercisable at December 31, 2021 | 9,990,000 | |||
Weighted Average Exercise price, Beginning | $ 0.29 | $ 0.28 | ||
Weighted-average exercise price, Grants | 0.19 | 0.28 | ||
Weighted-average exercise price, Exercises | 0 | 0.21 | ||
Weighted-average exercise price, Expirations 2010 Plan | 0.33 | 0.21 | ||
Weighted Average Exercise price, Ending | 0.27 | 0.29 | ||
Minimum | ||||
STOCKHOLDERS' EQUITY | ||||
Weighted Average Exercise price, Beginning | 0.19 | 0.16 | ||
Weighted-average exercise price, Grants | 0.28 | |||
Weighted-average exercise price, Expirations 2010 Plan | 0.19 | |||
Weighted Average Exercise price, Ending | 0.19 | 0.19 | ||
Maximum | ||||
STOCKHOLDERS' EQUITY | ||||
Weighted Average Exercise price, Beginning | 0.64 | 0.64 | ||
Weighted-average exercise price, Expirations 2010 Plan | 0.40 | |||
Weighted Average Exercise price, Ending | $ 0.64 | $ 0.64 |
STOCKHOLDERS' EQUITY - Summar_3
STOCKHOLDERS' EQUITY - Summary of the Company's stock options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | ||
Number of shares, Beginning | 12,376,250 | 11,951,250 |
Outstanding options, Number of shares Granted | 3,105,000 | 2,605,000 |
Number of shares, Exercised | 0 | (105,000) |
Outstanding options, Number of shares Forfeited | (1,707,500) | |
Number of shares, Ending | 13,773,750 | 12,376,250 |
Number of Shares, Vested and unvested but expected to vest | 13,265,540 | |
Number of shares, Exercisable | 9,990,000 | |
Weighted Average Exercise price, Beginning | $ 0.29 | $ 0.28 |
Weighted Average Exercise Price Granted | 0.19 | 0.28 |
Weighted Average Exercise Price Exercised | 0 | 0.21 |
Outstanding options, Weighted-average exercise price Forfeited | 0.33 | |
Weighted Average Exercise price, Ending | 0.27 | $ 0.29 |
Vested and unvested but expected to vest, Weighted-average exercise price | 0.27 | |
Exercisable options, Weighted-average exercise price | $ 0.28 | |
Outstanding options, Weighted-average remaining contractual life (in years) | 7 years | |
Weighted Average Remaining Contractual Life Vested and unvested but expected to vest | 7 years | |
Exercisable options, Weighted-average remaining contractual life (in years) | 6 years 3 months 18 days | |
Outstanding options, Intrinsic value of in-the-money options | $ 0 | |
Aggregate Intrinsic Value Vested and unvested but expected to vest | 0 | |
Exercisable options, Intrinsic value of in-the-money options | $ 0 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of forward-looking range of assumptions to value the stock options issue (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | ||
Dividend yield | 0% | 0% |
Risk-free rate of return | 0.71% | |
Expected life in years | 5 years 10 months 17 days | 5 years 10 months 17 days |
Volatility | 87.68% | |
Forfeiture rate | 2.60% | 2.60% |
Minimum | ||
STOCKHOLDERS' EQUITY | ||
Risk-free rate of return | 1.61% | |
Volatility | 87.95% | |
Maximum | ||
STOCKHOLDERS' EQUITY | ||
Risk-free rate of return | 2.96% | |
Volatility | 90.43% |
STOCKHOLDERS' EQUITY - Summar_4
STOCKHOLDERS' EQUITY - Summary of warrant activity (Details) - Warrant - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |||
Number of shares, Beginning | 25,287,738 | 9,529,288 | |
Number of shares, Issuances | 16,118,750 | ||
Number of shares, Exercises | (102,947) | ||
Number of shares, Forfeitures | (257,353) | ||
Number of shares, Ending | 25,287,738 | 25,287,738 | 9,529,288 |
Weighted Average exercise price, Beginning | $ 0.24 | $ 0.21 | |
Weighted Average exercise price, Issuances | 0.26 | ||
Weighted Average exercise price, Exercises | 0.13 | ||
Weighted Average exercise price, Forfeitures | 0.37 | ||
Weighted Average exercise price, Ending | 0.24 | 0.24 | $ 0.21 |
Maximum | |||
STOCKHOLDERS' EQUITY | |||
Weighted Average exercise price, Beginning | 0.45 | ||
Weighted Average exercise price, Issuances | 0.28 | ||
Weighted Average exercise price, Exercises | 0.45 | 0.45 | |
Weighted Average exercise price, Ending | 0.45 | ||
Minimum | |||
STOCKHOLDERS' EQUITY | |||
Weighted Average exercise price, Beginning | 0.18 | ||
Weighted Average exercise price, Issuances | 0.24 | ||
Weighted Average exercise price, Exercises | $ 0.18 | $ 0.125 | |
Weighted Average exercise price, Ending | $ 0.18 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |||
Proceeds from the exercise of stock warrants | $ 0 | $ 12,868 | |
Stock-based compensation expense | 511,863 | $ 397,814 | |
Compensation cost related to non-vested options | $ 503,000 | ||
Weighted average remaining recognition period | 1 year 1 month 28 days | ||
Common stock reserved for issuance | 4,178,897 | 4,412,902 | 4,148,966 |
Outstanding shares of common stock | 2% | ||
Employee and Director | |||
STOCKHOLDERS' EQUITY | |||
Weighted average fair value of stock options granted | $ 0.15 | $ 0.20 | |
Stock Option and Incentive Plans | |||
STOCKHOLDERS' EQUITY | |||
Common stock reserved for issuance | 5,000,000 |
INCOME TAXES - Company's provis
INCOME TAXES - Company's provision (benefit) for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current income tax provision (benefit): | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Foreign | 0 | 0 |
Total | 0 | 0 |
Deferred income tax provision (benefit): | ||
Federal | (237,000) | (202,000) |
State | (75,000) | (63,000) |
Foreign | 0 | 0 |
Total | (312,000) | (265,000) |
Change in valuation allowance | 312,000 | 265,000 |
Total provision (benefit) for income taxes | $ 0 | $ 0 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets and related valuation allowances (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 14,502,000 | $ 14,266,000 |
Research and experimentation credit carryforwards | 2,265,000 | 2,269,000 |
Charitable contribution carryforwards | 3,000 | 3,000 |
Accrued expenses, deferred revenue and other | 580,000 | 547,000 |
Share-based compensation | 894,000 | 847,000 |
Deferred tax assets, gross | 18,244,000 | 17,932,000 |
Less - valuation allowance | (18,244,000) | (17,932,000) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES - Effective income
INCOME TAXES - Effective income tax rate reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
US Federal statutory rate | 21% | 21% |
State income tax, net of Federal benefit | 6.52% | 6.52% |
Share-based compensation | (5.46%) | (5.27%) |
Permanent differences and other | (4.01%) | (5.68%) |
Change in valuation allowance | (18.05%) | (16.57%) |
Effective income tax rate | 0% | 0% |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2009 |
INCOME TAXES | ||||
Operating loss carryforwards | $ 52,700,000 | $ 47,900,000 | $ 9,800,000 | |
Unrecognized tax benefits | 0 | $ 0 | ||
Unrecognized tax benefits accrued for interest and penalties | 0 | $ 0 | ||
Research Tax Credit Carryforward | ||||
INCOME TAXES | ||||
Tax credit carryforward, amount | $ 2,300,000 | $ 200,000 |
LEASES - Company's recognition
LEASES - Company's recognition of its operating lease (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease right-of-use asset | $ 69,506 | $ 27,673 |
Total lease assets | 69,506 | 27,673 |
Current | ||
Current portion of operating lease liability | 43,385 | 27,809 |
Long-term portion of operating lease liability | 30,178 | |
Total lease liabilities | $ 73,563 | $ 27,809 |
LEASES - Minimum operating leas
LEASES - Minimum operating lease payments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | ||
Operating lease cost | $ 50,592 | $ 50,671 |
Variable lease costs | 9,098 | 1,216 |
Total lease costs | $ 59,690 | $ 51,887 |
LEASES - Maturity operating lea
LEASES - Maturity operating lease payment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
LEASES | ||
2023 | $ 54,301 | |
2024 | 32,223 | |
Total undiscounted cash flows | 86,524 | |
Less: imputed interest | (12,961) | |
Total lease liabilities | $ 73,563 | $ 27,809 |
LEASES - Additional information
LEASES - Additional information (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Jul. 31, 2022 | Dec. 31, 2022 | |
LEASES | ||
Lease rent per month | $ 4,500 | |
Lessee, operating lease, discount rate | 20% | |
Lease expiration term | July 2024 |
PROMISSORY NOTE (Details)
PROMISSORY NOTE (Details) | Aug. 24, 2020 USD ($) |
Paycheck Protection Program Loan | |
PROMISSORY NOTE | |
Principal amount of loan | $ 55,400 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Commitments | |
COMMITMENTS | |
Severance costs | $ 170,000 |