Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Apr. 27, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Protagenic Therapeutics, Inc.\new | ||
Entity Central Index Key | 0001022899 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15,392,129 | ||
Entity Common Stock, Shares Outstanding | 10,261,419 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 798,623 | $ 362,486 |
Marketable securities | 250,388 | |
Prepaid expenses | 43,354 | 83,399 |
TOTAL CURRENT ASSETS | 841,977 | 696,273 |
Equipment - net | 296 | 611 |
TOTAL ASSETS | 842,273 | 696,884 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 865,047 | 231,688 |
Derivative liability | 332,222 | 676,079 |
TOTAL CURRENT LIABILITIES | 1,197,269 | 907,767 |
PIK convertible notes payable, net of debt discount | 174,821 | |
PIK convertible notes payable, net of debt discount - related party | 104,549 | |
TOTAL LIABILITIES | 1,476,639 | 907,767 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock value | ||
Common stock, $.0001 par value, 100,000,000 shares authorized, 10,261,419 shares issued and outstanding at December 31, 2019, and December 31, 2018 | 1,026 | 1,026 |
Additional paid-in-capital | 14,687,172 | 13,357,920 |
Accumulated deficit | (15,150,201) | (13,399,290) |
Accumulated other comprehensive loss | (172,364) | (170,540) |
TOTAL STOCKHOLDERS' DEFICIT | (634,366) | (210,883) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 842,273 | 696,884 |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock value | $ 1 | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ .0001 | $ .0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 10,261,419 | 10,261,419 |
Common stock, shares outstanding | 10,261,419 | 10,261,419 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 18,000,000 | 18,000,000 |
Preferred stock, shares issued | 872,766 | 872,766 |
Preferred stock, shares outstanding | 872,766 | 872,766 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING AND ADMINISTRATIVE EXPENSES | ||
Research and development | $ 807,947 | $ 881,186 |
General and administrative | 1,278,183 | 1,432,941 |
TOTAL OPERATING AND ADMINISTRATIVE EXPENSES | 2,086,130 | 2,314,127 |
LOSS FROM OPERATIONS | (2,086,130) | (2,314,127) |
OTHER (EXPENSE) INCOME | ||
Interest income | 2,813 | 2,790 |
Interest expense | (15,886) | |
Realized gain on marketable securities | 4,435 | 4,047 |
Change in fair value of derivative liability | 343,857 | (250,241) |
TOTAL OTHER INCOME (EXPENSES) | 335,219 | (243,404) |
LOSS BEFORE TAX | (1,750,911) | (2,557,531) |
INCOME TAX EXPENSE | ||
NET LOSS | (1,750,911) | (2,557,531) |
Other Comprehensive Loss - net of tax | ||
Net unrealized loss on marketable securities | 6,250 | |
Foreign exchange translation loss | (6,647) | (8,985) |
TOTAL COMPREHENSIVE LOSS | $ (1,757,558) | $ (2,560,266) |
Net loss per common share - Basic and Diluted | $ (0.17) | $ (0.25) |
Weighted average common shares - Basic and Diluted | 10,261,419 | 10,261,419 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Deficit - USD ($) | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated (Deficit) [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2017 | $ 1 | $ 1,026 | $ 12,227,849 | $ (10,841,759) | $ (167,805) | $ 1,219,312 | |
Balance, shares at Dec. 31, 2017 | 872,766 | 10,261,419 | |||||
Unrealized gain (loss) on marketable securities | 6,250 | 6,250 | |||||
Foreign currency translation gain | (8,985) | (8,985) | |||||
Stock compensation - stock options | 1,130,071 | 1,130,071 | |||||
Net loss | (2,557,531) | (2,557,531) | |||||
Balance at Dec. 31, 2018 | $ 1 | $ 1,026 | 13,357,920 | (13,399,290) | (170,540) | (210,883) | |
Balance, shares at Dec. 31, 2018 | 872,766 | 10,261,419 | |||||
Unrealized gain (loss) on marketable securities | 4,823 | 4,823 | |||||
Foreign currency translation gain | (6,647) | (6,647) | |||||
Stock compensation - stock options | 797,761 | 797,761 | |||||
Debt discount from beneficial conversion feature | 402,000 | 402,000 | |||||
Issuance of options for settlement of accounts payable | 129,491 | 129,491 | |||||
Net loss | (1,750,911) | (1,750,911) | |||||
Balance at Dec. 31, 2019 | $ 1 | $ 1,026 | $ 14,687,172 | $ (15,150,201) | $ (172,364) | $ (634,366) | |
Balance, shares at Dec. 31, 2019 | 872,766 | 10,261,419 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,750,911) | $ (2,557,531) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation expense | 339 | 347 |
Stock based compensation | 797,761 | 1,130,071 |
Change in fair value of the derivative liability | (343,857) | 250,241 |
Gain on sale of marketable securities | (4,435) | (4,047) |
Amortization of debt discount | 11,370 | |
Loss on settlement of accounts payable | 99,541 | |
Changes in operating assets and liabilities | ||
Prepaid expenses | 40,044 | 11,143 |
Accounts payable and accrued expenses | 662,158 | 98,588 |
NET CASH USED IN OPERATING ACTIVITIES | (487,990) | (1,071,188) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Sale of marketable securities | 250,000 | 3,790,000 |
Purchase of marketable securities | (2,744,338) | |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 250,000 | 1,045,662 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from convertible notes | 420,000 | |
Proceeds from convertible notes - related party | 250,000 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 670,000 | |
Effect of exchange rate on cash and cash equivalents | 4,127 | (11,675) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 436,137 | (37,201) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 362,486 | 399,687 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 798,623 | 362,486 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest expense | ||
Cash paid for income taxes | ||
NONCASH FINANCING AND INVESTING TRANSACTIONS | ||
Unrealized (gain) loss on marketable securities | 4,823 | (6,250) |
Debt discount from beneficial conversion feature | 252,000 | |
Debt discount from beneficial conversion feature - related party | 150,000 | |
Issuance of options for settlement of accounts payable | $ 29,950 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS Company Background Protagenic Therapeutics, Inc. (“we,” “our,” “Protagenic” or “the Company”), is a Delaware corporation with one subsidiary named Protagenic Therapeutics Canada (2006) Inc. (“PTI Canada”), a corporation formed in 2006 under the laws of the Province of Ontario, Canada. The Company was previously known as Atrinsic, Inc., a company that was once a reporting company under the Securities Exchange Act of 1934, but that, in 2012 and 2013, reorganized under Chapter 11 of the United States Bankruptcy Code and emerged from bankruptcy. On February 12, 2016, the Company acquired Protagenic Therapeutics, Inc. (“Prior Protagenic”) through a reverse merger. On February 12, 2016, Protagenic Acquisition Corp., a wholly-owned subsidiary of the Company (which at the time was named Atrinsic, Inc.), merged (the “Merger”) with and into Prior Protagenic. Prior Protagenic was the surviving corporation of the Merger. As a result of the Merger, the Company acquired the business of Prior Protagenic and has continued the existing business operations of Prior Protagenic as a wholly-owned subsidiary. On June 17, 2016, Prior Protagenic merged with and into the Company with the Company as the surviving corporation in the merger. Immediately thereafter, the Company changed its name from Atrinsic, Inc. to Protagenic Therapeutics, Inc. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 - GOING CONCERN As shown in the accompanying consolidated financial statements, the Company has incurred significant reoccurring losses resulting in an accumulated deficit. The Company anticipates further losses in the development of its business. The Company had a net working capital deficit and negative cash flows used in operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Based on its current forecast and budget, management believes that its cash resources will be sufficient to fund its operations at least until the end of the third quarter of 2020. Absent generation of sufficient revenue from the execution of the Company’s business plan, the Company will need to obtain debt or equity financing by the fourth quarter of 2020. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - SUMMARY OF SIGNFICANT ACCOUNTING POLICIES Basis of presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of consolidation The consolidated financial statements include the accounts of Protagenic Therapeutics, Inc., and its wholly owned Canadian subsidiary, PTI Canada. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the consolidated financial statements include the allocation of the fair value of acquired assets and liabilities, income tax provisions, valuation of stock options and warrants and assessment of deferred tax asset valuation allowance. Concentrations of Credit Risk The Company maintains its cash accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation. At times, the Company may have deposits in excess of federally insured limits. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. While the Company’s marketable securities are cash equivalents it is the Company’s policy to present them separately on the balance sheet. As of December 31, 2019 and 2018, the Company did not have any cash equivalents. Equipment Equipment is stated at cost less accumulated depreciation. Cost includes expenditures for computer equipment. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of equipment is depreciated using the straight-line method over the estimated useful lives of the related assets which is three years. Depreciation expense was nominal for the years ended December 31, 2019 and 2018. Marketable Securities The Company accounts for marketable debt securities, the only type of securities it owns, in accordance with sub-topic 320-10 of the FASB Accounting Standards Codification (“Sub-topic 320-10”). Pursuant to Paragraph 320-10-35-1, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized. During the year ended December 31, 2019, the Company purchased $0 and sold $250,000 in marketable securities with a realized gain of $4,435 and $4,047 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the Company owned marketable securities with a total value of $0 and $250,388, respectively. The company recorded an unrealized gain (loss) on marketable securities of $4,823 and ($6,250) for the years ended December 31, 2019 and 2018 respectively. As of December 31, 2019, the Company held no marketable securities. Fair Value Measurements ASC 820, “Fair Value Measurements and Disclosure,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are described below: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company; Level 2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants. The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value as of December 31, 2019. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Marketable securities — — — — — Derivative warrants liabilities $ (332,222 ) $ — $ — $ (332,222 ) $ (332,222 ) The following table provides a summary of financial instruments that are measured at fair value as of December 31, 2018. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Marketable securities 250,388 250,388 — — 250,388 Derivative warrants liabilities $ (676,079 ) $ — $ — $ (676,079 ) $ (676,079 ) The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2019 and the year ended December 31, 2018: Fair Value Measurement Using Level 3 Inputs Total Balance, December 31, 2017 $ 425,838 Change in fair value of derivative warrants liabilities 250,241 Balance, December 31, 2018 676,079 Change in fair value of derivative warrants liabilities (343,857 ) Balance, December 31, 2019 $ 332,222 The fair value of the derivative feature of the 127,346 and 295,945 warrants issued to the placement agent of the Company’s 2016 private offering and to a holder of its debt for debt cancellation in connection with the Merger, respectively on the issuance dates and at the balance sheet date were calculated using a Black-Scholes option model valued with the following assumptions: December 31, 2018 December 31, 2019 Exercise price 1.25 1.25 Risk free interest rate 2.46 % 1.59 % Dividend yield 0.00 % 0.00 % Expected volatility 152 % 133 % Contractual term 2.15 Years 1.15 Years Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar expected term on the date of measurement. Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future. Volatility: The Company calculates the expected volatility of the stock price based on the corresponding volatility of the Company’s peer group stock price for a period consistent with the warrants’ expected term. Expected term: The Company’s expected term is based on the remaining contractual maturity of the warrants. During the year ended December 31, 2019 and 2018, the Company marked the derivative feature of the warrants to fair value and recorded a loss of $343,857 and a gain of $250,241 relating to the change in fair value, respectively. Derivative Liability The Company evaluates its options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10-05-4 and 815-40-25. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. Stock-Based Compensation The Company accounts for stock based compensation costs under the provisions of ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense related to the fair value of stock based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC. 718 is also applied to awards modified, repurchased, or canceled during the periods reported. If any award granted under the Company’s 2016 Equity Compensation Plan (the “2016 Plan”) payable in shares of common stock is forfeited, cancelled, or returned for failure to satisfy vesting requirements, otherwise terminates without payment being made, or if shares of common stock are withheld to cover withholding taxes on options or other awards, the number of shares of common stock as to which such option or award was forfeited, or which were withheld, will be available for future grants under the 2016 Plan. The Company recognizes the impact of forfeitures when they occur. Stock-Based Compensation for Non-Employees The Company accounts for warrants and options issued to non-employees under AUS 2018-07, Equity – Equity Based Payments to Non-Employees, Basic and Diluted Net (Loss) per Common Share Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The effect of dilution on net loss becomes anti-dilutive and therefore is not reflected on the income statement. Potentially Outstanding For the Year Ended For the Year Ended Conversion Feature Shares Common shares issuable under the conversion feature of preferred shares 872,766 872,766 Stock Options 3,835,366 3,846,299 Warrants 3,826,658 3,826,658 Convertible Notes 536,000 - Total potentially outstanding dilutive common shares 9,070,790 8,545,723 Research and Development Research and development expenses are charged to operations as incurred. Foreign Currency Translation The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash. The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of income and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of income and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of income and comprehensive income (loss). Based on an assessment of the factors discussed above, the management of the Company determined its subsidiary’s local currency (i.e. the Canadian dollar) to be the functional currency for its foreign subsidiary. Leases In February 2016, FASB issued Accounting Standards Update (“ASU”) 2016-02: Leases (Topic 842). The new guidance generally requires an entity to recognize on its balance sheet operating and financing lease liabilities and corresponding right-of-use assets. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The new standard requires a modified retrospective transition for existing leases to each prior reporting period presented or entered into after, the beginning of the earliest comparative period presented in the financial statements. This standard was adopted by the Company on January 1, 2018. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following at: December 31, 2019 December 31, 2018 Accounting $ 36,161 $ 52,365 Research and development 650,584 137,114 Legal 15,273 32,161 Other 163,029 10,048 Total $ 865,047 $ 231,688 On October 1 2019, the Company entered into an agreement with a consultant for toxicology studies. The consultant quoted a commitment of approximately $988,000 as an estimate for the study. 50% of the total price is to be paid upon the signing of the agreement, 35% of the total price is to be upon completion of the in-life study, and the remaining 15% of the total price is to be paid upon the issuance of the report. If the Company cancels the study the Company will be required to pay a cancelation fee. If the cancelation happens prior to the arrival of the test animals then the Company will need to pay between 20% and 50% of the animal fees depending on when the cancellation happens. If the cancellation occurs after the animals arrive but before the study begins then the company will be responsible for paying 50% of the protocol price plus a fee of $7,000 per room/week for animal husbandry until the animals can be relocated or disposed of. If the Company cancels the study after it has begun then the Company will need to pay any fees for procured items for the study and any nonrecoverable expenses incurred by the vendor. As of December 31, 2019, the Company has paid $0 and there is a balance of $493,905 due. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | NOTE 5 - DERIVATIVE LIABILITIES Upon closing of the private placement transactions in 2016, the Company issued 127,346 and 295,945 warrants, respectively, to the placement agent of the private offering and to Strategic Bio Partners, a holder of the Company’s debt, for debt cancellation, respectively, to purchase the Company’s Series B Preferred Stock with an exercise price of $1.25 and a five-year term. Upon the effectiveness of our reverse stock split in July 2016, these became warrants to purchase our common stock on the same terms and conditions. The warrants have a cashless exercise feature that requires the Company to classify the warrants as a derivative liability. |
Convertible Note Payable (PIK N
Convertible Note Payable (PIK Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable (PIK Notes) | NOTE 6 – CONVERTIBLE NOTE PAYABLE (PIK NOTES) Convertible Notes Payable During the fourth quarter of 2019, the Company entered into a series of unsecured convertible notes. The convertible notes have a total principle of $420,000. The notes accrue 6% interest per year, payable by a corresponding increase in the principal amount of each note, that increases to 12% per year in the case of the notes entering default. The Company will pay (a “PIK Payment”) the interest due by adding such interest (including interest at the Default Rate) to the then-outstanding principal amount of the Notes on each interest payment date and on the Maturity Date. Each PIK Payment will be preceded by written notice from the Company to the Note holder setting forth in reasonable detail the amount of such PIK Payment and the principal amount of the Note following such PIK Payment. The notes are due on November 6, 2023. The notes are convertible into shares of the Company’s common stock with an exercise price of $1.25 per share. The Company has evaluated the terms of the notes and determined that there are no derivative features in the note. These notes did have a beneficial conversion feature and recorded a debt discount of $252,000. During the year ended December 31, 2019, the Company amortized $6,821 of the debt discount. At December 31, 2019, the Company had an unamortized debt discount of 245,179. As of December 31, 2019 and 2018, the Company owes $420,000 and $0 on the outstanding notes, respectively. Convertible Notes Payable – Related Party During the fourth quarter of 2019, the Company entered into a series of unsecured convertible notes with related parties. The convertible notes have a total principle of $250,000. The notes accrue 6% interest per year, payable by a corresponding increase in the principal amount of each note, that increases to 12% per year in the case of the notes entering default. The Company will pay (a “PIK Payment”) the interest due by adding such interest (including interest at the Default Rate) to the then-outstanding principal amount of the Notes on each interest payment date and on the Maturity Date. Each PIK Payment will be preceded by written notice from the Company to the Note holder setting forth in reasonable detail the amount of such PIK Payment and the principal amount of the Note following such PIK Payment. The notes are due on November 6, 2023. The notes are convertible into shares of the Company’s common stock with an exercise price of $1.25 per share. The Company has evaluated the terms of the notes and determined that there are no derivative features in the note. These notes did have a beneficial conversion feature and recorded a debt discount of $150,000. During the year ended December 31, 2019, the Company amortized $4,549 of the debt discount. At December 31, 2019, the Company had an unamortized debt discount of $154,451. As of December 31, 2019 and 2018, the Company owes $250,000 and $0 on the outstanding notes, respectively. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 7 - STOCKHOLDERS’ DEFICIT Stock-Based Compensation In connection with the consummation of the Merger completed on February 12, 2016, we adopted Prior Protagenic’s 2006 Employee, Director and Consultant Stock Plan (the “2006 Plan”). On June 17, 2016, our stockholders adopted the 2016 Plan and, as a result, we terminated the 2006 Plan. We will not grant any further awards under the 2006 Plan. All outstanding grants under the 2006 Plan will continue in effect in accordance with the terms of the particular grant and the 2006 Plan. Pursuant to the 2016 Plan, the Company’s Compensation Committee may grant awards to any employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary. On each of January 1, 2017 and January 1, 2019, pursuant to an annual “evergreen” provision contained in the 2016 Plan, the number of shares reserved for future grants was increased by 564,378 shares, or a total of 1,693,134 shares. As a result of this increase, as of December 31, 2019, the aggregate number of shares of common stock available for awards under the 2016 Plan was 4,304,245 shares. Options issued under the 2016 Plan are exercisable for up to ten years from the date of issuance. There were 3,835,366 options outstanding as of December 31, 2019. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 1.00 - $1.75 Expected dividend yield 0 % Risk free interest rate 2.09% - 2.70 % Expected life in years 10 Expected volatility 137% - 140 % There were 3,846,299 options outstanding as of December 31, 2018. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 1.25 - $1.75 Expected dividend yield 0 % Risk free interest rate 2.73% - 2.85 % Expected life in years 3.75-9.40 Expected volatility 139% - 146 % The following is an analysis of the stock option grant activity under the Plan: Weighted Weighted Number Exercise Price Life Stock Options Outstanding December 31, 2017 3,566,299 $ 1.33 8.05 Granted 280,000 $ 1.75 9.15 Expired - Outstanding December 31, 2018 3,846,299 $ 1.36 7.20 Granted 126,567 $ 1.15 9.20 Expired (137,500 ) $ 1.75 Outstanding December 31, 2019 3,835,366 $ 1.34 6.02 A summary of the status of the Company’s nonvested options as of December 31, 2019, and changes during the year ended December 31, 2019, is presented below: Nonvested Options Options Weighted- Nonvested at December 31, 2017 1,492,861 $ 1.54 Granted 280,000 $ 1.75 Vested (972,651 ) $ 1.29 Forfeited - - Nonvested at December 31, 2018 800,210 $ 1.63 Granted 126,567 $ 1.15 Vested (584,895 ) $ 1.46 Forfeited (137,500 ) 1.75 Nonvested at December, 2019 204,382 $ 1.74 As of December 31, 2019, the Company had 3,835,366 shares issuable under options outstanding at a weighted average exercise price of $1.34 and an intrinsic value of $635,536. As of December 31, 2019, the Company had 3,846,299 shares issuable under options outstanding at a weighted average exercise price of $1.36 and an intrinsic value of $2,150,912. The total number of options granted during the year ended December, 2019 and 2018 was 126,567 and 280,000, respectively. The exercise price for these options was $1.00 per share, $1.25 per share, or $1.75 per share. The Company recognized compensation expense related to options issued of $797,761 and $1,130,071 during the year ended December 31, 2019 and 2018, respectively, which is included in general and administrative expenses and research and development expenses. For the year ended December 31, 2019, $562,734 of the stock compensation was related to employees and $235,027 was related to non-employees. On January 24, 2018, the Company entered into a consulting agreement (the “Agreement”) with NeuroAssets Sàrl (“Consultant”), a Swiss company. As part of the agreement, on February 20, 2018, the Compensation Committee of the Company’s Board of Directors approved a grant of 200,000 options under our 2016 Equity Compensation Plan. The options vest over 48 months in equal monthly installments with the first monthly vesting event scheduled to occur on March 20, 2018, have a term of ten years and are exercisable at a price of $1.75 per share. The vesting of the options will accelerate if a corporate partnership results from an introduction made by Consultant. During the first quarter of 2018 the Company granted 80,000 stock options to four consultants. 50,000 of these options vest immediately and the remaining 30,000 options vest monthly over 48 months, have an exercise price of $1.75, and have a term of ten years. As of December 31, 2019, the unamortized stock option expense was $287,905 with $144,423 being related to employees and $143,482 being related to non-employees. As of December 31, 2019, the weighted average period for the unamortized stock compensation to be recognized is 3.98 years. On February 25, 2019, the Company granted 101,567 options with an exercise price of $1.00 and a ten year term. 59,900 of these options vest immediately and 41,667 vest bi-weekly over two months. These options have a Black-Scholes value of $199,807. The Company issued 59,900 options for settlement of accounts payable totaling $29,850 and recorded a loss of $99,541 on the settlement of the accounts payable. On June 17, 2019, the Company granted 25,000 options with an exercise price of $1.75 and a ten year term. These options vest immediately and have a Black-Scholes value of $36,374. Warrants: In connection with the Merger, all of the issued and outstanding warrants to purchase shares of Prior Protagenic common stock, converted, on a 1 for 1 basis, into new warrants (the “ New Warrants Simultaneous with the Merger and the Private Offering, New Warrants to purchase 3,403,367 shares of Series B Preferred Stock at an average exercise price of approximately $1.05 per share were issued to holders of Prior Protagenic warrants; additionally, the holder of $665,000 of our debt and $35,000 of accrued interest exchanged such debt for five-year warrants to purchase 295,945 shares of Series B Preferred Stock at $1.25 per share. Placement Agent Warrants to purchase 127,346 shares of Series B Preferred Stock at an exercise price of $1.25 per share were issued in connection with the Private offering. These warrants to purchase 423,291 shares of Series B Preferred Stock have been recorded as derivative liabilities. All of these warrants automatically converted into warrants to purchase our common stock upon the effectiveness of our reverse stock split in July 2016. See Note 5. A summary of warrant issuances are as follows: Weighted Weighted Number Exercise Price Life Warrants Outstanding December 31, 2017 3,826,658 $ 1.05 4.69 Granted - - - Outstanding December 31, 2018 3,826,658 $ 1.05 3.69 Granted - - - Outstanding December 31, 2019 3,826,658 $ 1.05 2.69 As of December 31, 2019, the Company had 3,826,658 shares issuable under warrants outstanding at a weighted average exercise price of $1.05 and an intrinsic value of $1,375,990. As of December 31, 2018 the Company had 3,826,658 shares issuable under warrants outstanding at a weighted average exercise price of $1.05 and an intrinsic value of $3,633,335. |
Collaborative Agreements
Collaborative Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Agreements | NOTE 8 - COLLABORATIVE AGREEMENTS The Company and the University of Toronto, a stockholder of the Company (the “University”) entered into an agreement effective December 14, 2004 (the “Research Agreement”) for the performance of a research project titled “Evidence for existence of TCAP receptors in neurons” (the “Project”). The Research Agreement expired on March 31, 2013. The Company and the University entered into an agreement effective April 1, 2014 (the “New Research Agreement”) for the performance of a research project titled “Teneurin C-terminal Associated Peptide (“TCAP”) mediated stress attenuation in vertebrates: Establishing the role of organismal and intracellular energy and glucose regulation and metabolism” (the “New Project”). The New Project is to perform research related to work done by Dr. David A. Lovejoy, a professor at the University and stockholder of the Company, in regard to TCAP mediated stress attenuation in vertebrates: Establishing the role of organismal and intracellular energy and glucose regulation and metabolism. In addition to the New Research Agreement, Dr. Lovejoy entered into an agreement with the University in order to commercialize certain technologies. The New Research Agreement expired on March 30, 2016. In February 2017, the New Research Agreement was extended to December 31, 2016. The extension allowed for further development of the technologies and use of their applications. On April 10, 2018, the agreement was amended and the research agreement has been further extended to December 31, 2023. Prior to January 1, 2016, the University has been granted 25,000 stock options which are fully vested at the exercise price of $1.00 exercisable over a ten year period which ends on April 1, 2022. As of December 31, 2019, Dr. David Lovejoy of the University has been granted 533,299 stock options, of which 510,903 are fully vested. These have an exercise price of $1.00, $1.25 or 1.75 and are exercisable over ten or thirteen year periods which end either on March 30, 2021, December 1, 2022, April 15, 2026, March 1, 2027 or on October 16, 2027. The sponsorship research and development expenses pertaining to the Research Agreements were $63,905 and $107,868 for the year ended December 31, 2019 and 2018, respectively. |
Licensing Agreements
Licensing Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Licensing Agreements | NOTE 9 - LICENSING AGREEMENTS On July 31, 2005, the Company had entered into a Technology License Agreement (“License Agreement”) with the University pursuant to which the University agreed to license to the Company patent rights and other intellectual property, among other things (the “Technologies”). The Technology License Agreement was amended on February 18, 2015 and currently does not provide for an expiration date. Pursuant to the License Agreement and its amendment, the Company obtained an exclusive worldwide license to make, have made, use, sell and import products based upon the Technologies, or to sublicense the Technologies in accordance with the terms of the License Agreement and amendment. In consideration, the Company agreed to pay to the University a royalty payment of 2.5% of net sales of any product based on the Technologies. If the Company elects to sublicense any rights under the License Agreement and amendment, the Company agrees to pay to the University 10% of any up-front sub-license fees for any sub-licenses that occurred on or after September 9, 2006, and, on behalf of the sub-licensee, 2.5% of net sales by the sub-licensee of all products based on the Technologies. The Company had no sales revenue for the year ended December 31, 2019 and 2018 and therefore was not subject to paying any royalties. In the event the Company fails to provide the University with semi-annual reports on the progress or fails to continue to make reasonable commercial efforts towards obtaining regulatory approval for products based on the Technologies, the University may convert our exclusive license into a non-exclusive arrangement. Interest on any amounts owed under the License Agreement and amendment will be at 3% per annum. All intellectual property rights resulting from the Technologies or improvements thereon will remain the property of the other inventors and/or Dr. Lovejoy, and/or the University, as the case may be. The Company has agreed to pay all out-of- pocket filing, prosecution and maintenance expenses in connection with any patents relating to the Technologies. In the case of infringement upon any patents relating to the Technologies, the Company may elect, at its own expense, to bring a cause of action asserting such infringement. In such a case, after deducting any legal expenses the Company may incur, any settlement proceeds will be subject to the 2.5% royalty payment owed to the University under the License Agreement and amendment. The patent applications were made in the name of Dr. Lovejoy and other inventors, but the Company’s exclusive, worldwide rights to such patent applications are included in the License Agreement and its amendment with the University. The Company maintains exclusive licensing agreements and it currently controls the five intellectual patent properties. Legal Proceedings From time to time we may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business and financial condition. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS The Company is provided free office space consisting of a conference room by the Company Executive Chairman, Dr. Armen. The Company does not pay any rent for the use of this space. This space is used for quarterly board meetings and our annual shareholder meeting. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 – INCOME TAXES The components of loss before income taxes are as follows: 2019 2018 Domestic (1,698,689 ) (2,468,805 ) Foreign (52,222 ) (88,726 ) Loss before income taxes (1,750,911 ) (2,557,531 ) The Company had no income tax expense due to operating losses incurred for the years ended December 31, 2019 and 2018. For the years ended December 31, 2019 and 2018, a reconciliation of the Company’s effective tax rate to the statutory U.S. Federal rate is as follows: 2019 2018 Income taxes at Federal statutory rate (21.0 )% (21.0 )% State income taxes, net of Federal income tax effect (8.6 )% (8.6 )% Perm difference 0.0 % 0.0 )% Foreign tax rate differential (0.6 )% (0.6 )% Change in valuation allowance 30.2 % 30.2 % Other 0.0 % 0.0 % Income tax provision 0.0 % 0.0 % The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows: 2019 2018 U.S. net operating loss carryforwards 2,894,000 2,627,000 Stock compensation 784,000 359,000 Canadian Provincial income tax losses 29,000 56,000 Canadian Provincial scientific investment tax credits (4,000 ) - 3,703,000 3,042,000 Valuation allowance (3,703,000 ) (3,042,000 ) Net deferred tax assets - - As of December 31, 2019 and 2018, the Company had federal net operating loss carryforwards (“NOL”) of approximately $7,161,000 and $6,617,000, respectively. The losses expire beginning in 2024. The Company has not performed a detailed analysis to determine whether an ownership change under IRC Section 382 has occurred. The effect of an ownership change would be the imposition of annual limitation on the use of NOL carryforwards attributable to periods before the change Any limitation may result in expiration of a portion of the NOL before utilization. As of December 31, 2019 and 2018, the Company had state and local net operating loss carryforwards of approximately $7,153,000 and $6,609,000, respectively, to reduce future state tax liabilities also through 2035. As of December 31, 2019 and 2018, the Company had Canadian NOL of approximately $1,111,000 and $1,070,000, respectively. The Canadian losses expire in stages beginning in 2026. As of December 31, 2019 and 2018, the Company also has unclaimed Canadian federal scientific research and development investment tax credits, which are available to reduce future federal taxes payable of approximately $0 and $0 respectively. As a result of losses and uncertainty of future profit, the net deferred tax asset has been fully reserved. The net change in the valuation allowance during the years ended December 31, 2019 and 2018 was an increase of $661,000 and $457,000, respectively. Foreign earnings are assumed to be permanently reinvested. U.S. Federal income taxes have not been provided on undistributed earnings of our foreign subsidiary. The Company recognizes interest and penalties related to uncertain tax positions in selling, general and administrative expenses. The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2019 and 2018. The Company is required to file U.S. federal and state income tax returns. These returns are subject to audit by tax authorities beginning with the year ended December 31, 2014. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 - SUBSEQUENT EVENTS During 2020, the Company issued 12 convertible notes with a total principle of $425,000. The notes accrue 6% interest per year, payable by a corresponding increase in the principal amount of each note, that increases to 12% per year in the case of the notes entering default. The notes are due on November 6, 2023. The notes are convertible into shares of the Company’s common stock with an exercise price of $1.25 per share. On February 21, 2020, the Company extended the expiration date for 100,000 warrants to purchase shares of the Company’s common stock. The expiration date was extended by two years from January 2, 2020 to January 2, 2022. These warrants have exercise price of $1.25 and are fully vested. On February 21, 2020, the Company issued a total of 1,387,497 options to purchase shares of the Company’s common stock to sixteen individuals with 1,362,497 option going to twelve related parties. These options have an exercise price of $1.75. 187,497 of the options vest immediately, 510,000 of the options vest monthly over 12 months, 5,000 of the options vest monthly over 24 months, 420,000 of the options vest monthly over 36 months, and 265,000 of the options vest monthly over 48 months. These options were approved by the board of directors on February 13, 2020 and the final agreements are in process. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). |
Principles of Consolidation | Principles of consolidation The consolidated financial statements include the accounts of Protagenic Therapeutics, Inc., and its wholly owned Canadian subsidiary, PTI Canada. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. |
Use of Estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the consolidated financial statements include the allocation of the fair value of acquired assets and liabilities, income tax provisions, valuation of stock options and warrants and assessment of deferred tax asset valuation allowance. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company maintains its cash accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation. At times, the Company may have deposits in excess of federally insured limits. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. While the Company’s marketable securities are cash equivalents it is the Company’s policy to present them separately on the balance sheet. As of December 31, 2019 and 2018, the Company did not have any cash equivalents. |
Equipment | Equipment Equipment is stated at cost less accumulated depreciation. Cost includes expenditures for computer equipment. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of equipment is depreciated using the straight-line method over the estimated useful lives of the related assets which is three years. Depreciation expense was nominal for the years ended December 31, 2019 and 2018. |
Marketable Securities | Marketable Securities The Company accounts for marketable debt securities, the only type of securities it owns, in accordance with sub-topic 320-10 of the FASB Accounting Standards Codification (“Sub-topic 320-10”). Pursuant to Paragraph 320-10-35-1, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized. During the year ended December 31, 2019 the Company purchased $0 and sold $250,000 in marketable securities with a realized gain of $4,435 and $4,047 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the Company owned marketable securities with a total value of $0 and $250,388, respectively. The company recorded an unrealized gain (loss) on marketable securities of $4,823 and ($6,250) for the years ended December 31, 2019 and 2018 respectively. As of December 31, 2019, the Company held no marketable securities. |
Fair Value Measurements | Fair Value Measurements ASC 820, “Fair Value Measurements and Disclosure,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are described below: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company; Level 2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants. The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value as of December 31, 2019. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Marketable securities — — — — — Derivative warrants liabilities $ (332,222 ) $ — $ — $ (332,222 ) $ (332,222 ) The following table provides a summary of financial instruments that are measured at fair value as of December 31, 2018. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Marketable securities 250,388 250,388 — — 250,388 Derivative warrants liabilities $ (676,079 ) $ — $ — $ (676,079 ) $ (676,079 ) The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2019 and the year ended December 31, 2018: Fair Value Measurement Using Level 3 Inputs Total Balance, December 31, 2017 $ 425,838 Change in fair value of derivative warrants liabilities 250,241 Balance, December 31, 2018 676,079 Change in fair value of derivative warrants liabilities (343,857 ) Balance, December 31, 2019 $ 332,222 The fair value of the derivative feature of the 127,346 and 295,945 warrants issued to the placement agent of the Company’s 2016 private offering and to a holder of its debt for debt cancellation in connection with the Merger, respectively on the issuance dates and at the balance sheet date were calculated using a Black-Scholes option model valued with the following assumptions: December 31, 2018 December 31, 2019 Exercise price 1.25 1.25 Risk free interest rate 2.46 % 1.59 % Dividend yield 0.00 % 0.00 % Expected volatility 152 % 133 % Contractual term 2.15 Years 1.15 Years Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar expected term on the date of measurement. Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future. Volatility: The Company calculates the expected volatility of the stock price based on the corresponding volatility of the Company’s peer group stock price for a period consistent with the warrants’ expected term. Expected term: The Company’s expected term is based on the remaining contractual maturity of the warrants. During the year ended December 31, 2019 and 2018, the Company marked the derivative feature of the warrants to fair value and recorded a loss of $343,857 and a gain of $250,241 relating to the change in fair value, respectively. |
Derivative Liability | Derivative Liability The Company evaluates its options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10-05-4 and 815-40-25. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock based compensation costs under the provisions of ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense related to the fair value of stock based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC. 718 is also applied to awards modified, repurchased, or canceled during the periods reported. If any award granted under the Company’s 2016 Equity Compensation Plan (the “2016 Plan”) payable in shares of common stock is forfeited, cancelled, or returned for failure to satisfy vesting requirements, otherwise terminates without payment being made, or if shares of common stock are withheld to cover withholding taxes on options or other awards, the number of shares of common stock as to which such option or award was forfeited, or which were withheld, will be available for future grants under the 2016 Plan. The Company recognizes the impact of forfeitures when they occur. |
Stock-Based Compensation for Non-Employees | Stock-Based Compensation for Non-Employees The Company accounts for warrants and options issued to non-employees under AUS 2018-07, Equity – Equity Based Payments to Non-Employees, |
Basic and Diluted Net (Loss) Per Common Share | Basic and Diluted Net (Loss) per Common Share Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The effect of dilution on net loss becomes anti-dilutive and therefore is not reflected on the income statement. Potentially Outstanding For the Year Ended For the Year Ended Conversion Feature Shares Common shares issuable under the conversion feature of preferred shares 872,766 872,766 Stock Options 3,835,366 3,846,299 Warrants 3,826,658 3,826,658 Convertible Notes 536,000 - Total potentially outstanding dilutive common shares 9,070,790 8,545,723 |
Research and Development | Research and Development Research and development expenses are charged to operations as incurred. |
Foreign Currency Translation | Foreign Currency Translation The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash. The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of income and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of income and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of income and comprehensive income (loss). Based on an assessment of the factors discussed above, the management of the Company determined its subsidiary’s local currency (i.e. the Canadian dollar) to be the functional currency for its foreign subsidiary. |
Leases | Leases In February 2016, FASB issued Accounting Standards Update (“ASU”) 2016-02: Leases (Topic 842). The new guidance generally requires an entity to recognize on its balance sheet operating and financing lease liabilities and corresponding right-of-use assets. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The new standard requires a modified retrospective transition for existing leases to each prior reporting period presented or entered into after, the beginning of the earliest comparative period presented in the financial statements. This standard was adopted by the Company on January 1, 2018. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value as of December 31, 2019. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Marketable securities — — — — — Derivative warrants liabilities $ (332,222 ) $ — $ — $ (332,222 ) $ (332,222 ) The following table provides a summary of financial instruments that are measured at fair value as of December 31, 2018. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Marketable securities 250,388 250,388 — — 250,388 Derivative warrants liabilities $ (676,079 ) $ — $ — $ (676,079 ) $ (676,079 ) |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2019 and the year ended December 31, 2018: Fair Value Measurement Using Level 3 Inputs Total Balance, December 31, 2017 $ 425,838 Change in fair value of derivative warrants liabilities 250,241 Balance, December 31, 2018 676,079 Change in fair value of derivative warrants liabilities (343,857 ) Balance, December 31, 2019 $ 332,222 |
Schedule of Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | December 31, 2018 December 31, 2019 Exercise price 1.25 1.25 Risk free interest rate 2.46 % 1.59 % Dividend yield 0.00 % 0.00 % Expected volatility 152 % 133 % Contractual term 2.15 Years 1.15 Years |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The effect of dilution on net loss becomes anti-dilutive and therefore is not reflected on the income statement. Potentially Outstanding For the Year Ended For the Year Ended Conversion Feature Shares Common shares issuable under the conversion feature of preferred shares 872,766 872,766 Stock Options 3,835,366 3,846,299 Warrants 3,826,658 3,826,658 Convertible Notes 536,000 - Total potentially outstanding dilutive common shares 9,070,790 8,545,723 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following at: December 31, 2019 December 31, 2018 Accounting $ 36,161 $ 52,365 Research and development 650,584 137,114 Legal 15,273 32,161 Other 163,029 10,048 Total $ 865,047 $ 231,688 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 1.00 - $1.75 Expected dividend yield 0 % Risk free interest rate 2.09% - 2.70 % Expected life in years 10 Expected volatility 137% - 140 % The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 1.25 - $1.75 Expected dividend yield 0 % Risk free interest rate 2.73% - 2.85 % Expected life in years 3.75-9.40 Expected volatility 139% - 146 % |
Schedule of Share-based Compensation, Stock Options, Activity | The following is an analysis of the stock option grant activity under the Plan: Weighted Weighted Number Exercise Price Life Stock Options Outstanding December 31, 2017 3,566,299 $ 1.33 8.05 Granted 280,000 $ 1.75 9.15 Expired - Outstanding December 31, 2018 3,846,299 $ 1.36 7.20 Granted 126,567 $ 1.15 9.20 Expired (137,500 ) $ 1.75 Outstanding December 31, 2019 3,835,366 $ 1.34 6.02 |
Schedule of Share-based Compensation Nonvested Shares | A summary of the status of the Company’s nonvested option as of December 31, 2019, and changes during the year ended December 31, 2019, is presented below: Nonvested Options Options Weighted- Nonvested at December 31, 2017 1,492,861 $ 1.54 Granted 280,000 $ 1.75 Vested (972,651 ) $ 1.29 Forfeited - - Nonvested at December 31, 2018 800,210 $ 1.63 Granted 126,567 $ 1.15 Vested (584,895 ) $ 1.46 Forfeited (137,500 ) 1.75 Nonvested at December, 2019 204,382 $ 1.74 |
Summary of Warrant Issuances | A summary of warrant issuances are as follows: Weighted Weighted Number Exercise Price Life Warrants Outstanding December 31, 2017 3,826,658 $ 1.05 4.69 Granted - - - Outstanding December 31, 2018 3,826,658 $ 1.05 3.69 Granted - - - Outstanding December 31, 2019 3,826,658 $ 1.05 2.69 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Tax | The components of loss before income taxes are as follows: 2019 2018 Domestic (1,698,689 ) (2,468,805 ) Foreign (52,222 ) (88,726 ) Loss before income taxes (1,750,911 ) (2,557,531 ) |
Schedule of Effective Income Tax Rate Reconciliation | For the years ended December 31, 2019 and 2018, a reconciliation of the Company’s effective tax rate to the statutory U.S. Federal rate is as follows: 2019 2018 Income taxes at Federal statutory rate (21.0 )% (21.0 )% State income taxes, net of Federal income tax effect (8.6 )% (8.6 )% Perm difference 0.0 % 0.0 )% Foreign tax rate differential (0.6 )% (0.6 )% Change in valuation allowance 30.2 % 30.2 % Other 0.0 % 0.0 % Income tax provision 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows: 2019 2018 U.S. net operating loss carryforwards 2,894,000 2,627,000 Stock compensation 784,000 359,000 Canadian Provincial income tax losses 29,000 56,000 Canadian Provincial scientific investment tax credits (4,000 ) - 3,703,000 3,042,000 Valuation allowance (3,703,000 ) (3,042,000 ) Net deferred tax assets - - |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash equivalents | ||
Payments to acquire marketable securities | 2,744,338 | |
Proceeds from sale of marketable securities | 250,000 | 3,790,000 |
Marketable securities, gross realized (gain) loss | 4,435 | 4,047 |
Marketable securities | 250,388 | |
Marketable securities, gross unrealized gain (loss) | 4,823 | 6,250 |
Derivative, gain (loss) on derivative, net | $ (343,857) | $ 250,241 |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair value measurements, input percentage | 0.00% | |
Private Placement [Member] | ||
Fair value of derivative feature | 127,346 | |
Class of warrant or right, issued | 295,945 | |
Equipment [Member] | ||
Property, plant and equipment, useful life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Reported Value Measurement [Member] | ||
Marketable securities | $ 250,388 | |
Derivative warrants liabilities | (332,222) | (676,079) |
Estimate of Fair Value Measurement [Member] | ||
Marketable securities | 250,388 | |
Derivative warrants liabilities | (332,222) | (676,079) |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Marketable securities | 250,388 | |
Derivative warrants liabilities | ||
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Marketable securities | ||
Derivative warrants liabilities | ||
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Marketable securities | ||
Derivative warrants liabilities | $ (332,222) | $ (676,079) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Balance at beginning | $ 676,079 | $ 425,838 |
Change in fair value of derivative warrants liabilities | (343,857) | 250,241 |
Balance at end | $ 332,222 | $ 676,079 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Measurement Input, Exercise Price [Member] | ||
Fair value assumptions, exercise price | $ 1.25 | $ 1.25 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair value assumptions, percentage | 1.59% | 2.46% |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair value assumptions, percentage | 0.00% | 0.00% |
Measurement Input, Price Volatility [Member] | ||
Fair value assumptions, percentage | 133.00% | 152.00% |
Measurement Input, Contractual Term [Member] | ||
Fair value assumptions contractual term | 1 year 1 month 24 days | 2 years 1 month 24 days |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total potentially outstanding dilutive common shares | 9,070,790 | 8,545,723 |
Conversion Feature Shares [Member] | ||
Total potentially outstanding dilutive common shares | 872,766 | 872,766 |
Stock Option [Member] | ||
Total potentially outstanding dilutive common shares | 3,835,366 | 3,846,299 |
Warrant [Member] | ||
Total potentially outstanding dilutive common shares | 3,826,658 | 3,826,658 |
Convertible Notes [Member] | ||
Total potentially outstanding dilutive common shares | 536,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Oct. 02, 2019 | |
Toxicology Studies [Member] | ||
Estimate for study description | On October 1 2019, the Company entered into an agreement with a consultant for toxicology studies. The consultant quoted a commitment of approximately $988,000 as an estimate for the study. 50% of the total price is to be paid upon the signing of the agreement, 35% of the total price is to be upon completion of the in-life study, and the remaining 15% of the total price is to be paid upon the issuance of the report. If the Company cancels the study the Company will be required to pay a cancelation fee. If the cancelation happens prior to the arrival of the test animals then the Company will need to pay between 20% and 50% of the animal fees depending on when the cancellation happens. If the cancellation occurs after the animals arrive but before the study begins then the company will be responsible for paying 50% of the protocol price plus a fee of $7,000 per room/week for animal husbandry until the animals can be relocated or disposed of. If the Company cancels the study after it has begun then the Company will need to pay any fees for procured items for the study and any nonrecoverable expenses incurred by the vendor. | |
Commitment cost paid | $ 0 | |
Balance due amount | $ 493,905 | |
Consultant [Member] | ||
Estimate commitment amount | $ 988,000 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounting | $ 36,161 | $ 52,365 |
Research and development | 650,584 | 137,114 |
Legal | 15,273 | 32,161 |
Other | 163,029 | 10,048 |
Total | $ 865,047 | $ 231,688 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - Private Placement [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2016 | |
Class of warrant or right, issued during period | 295,945 | |
Series B Preferred Stock [Member] | ||
Class of warrant or right, issued during period | 127,346 | |
Class of warrant or right, exercise price of warrants or rights | $ 1.25 | |
Class of warrant or right, expiration period | 5 years | |
Series B Preferred Stock [Member] | Debt Settlement [Member] | Strategic Bio Partners [Member] | ||
Class of warrant or right, issued during period | 295,945 | |
Class of warrant or right, exercise price of warrants or rights | $ 1.25 | |
Class of warrant or right, expiration period | 5 years |
Convertible Note Payable (PIK_2
Convertible Note Payable (PIK Notes) (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Convertible note principle amount | $ 665,000 | $ 665,000 | |
Debt amortized debt discount | 11,370 | ||
Unsecured Convertible Notes [Member] | |||
Convertible note principle amount | $ 420,000 | $ 420,000 | |
Debt interest percentage | 6.00% | 6.00% | |
Increase in interest rate | 12.00% | ||
Maturity date | Nov. 6, 2023 | ||
Conversion exercise price | $ 1.25 | $ 1.25 | |
Beneficial conversion feature and debt discount | $ 252,000 | $ 252,000 | |
Debt amortized debt discount | 6,821 | ||
Debt unamortized debt discount | 245,179 | 245,179 | |
Convertible notes payable outstanding | 420,000 | 420,000 | 0 |
Unsecured Convertible Notes with Related Parties [Member] | |||
Convertible note principle amount | $ 250,000 | $ 250,000 | |
Debt interest percentage | 6.00% | 6.00% | |
Increase in interest rate | 12.00% | ||
Maturity date | Nov. 6, 2023 | ||
Conversion exercise price | $ 1.25 | $ 1.25 | |
Beneficial conversion feature and debt discount | $ 150,000 | $ 150,000 | |
Debt amortized debt discount | 4,549 | ||
Debt unamortized debt discount | 154,451 | 154,451 | |
Convertible notes payable outstanding | $ 250,000 | $ 250,000 | $ 0 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jun. 17, 2019 | Feb. 25, 2019 | Jan. 02, 2019 | Jan. 24, 2018 | Jan. 02, 2017 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock options outstanding | 3,835,366 | 3,846,299 | 3,566,299 | |||||||
Stock options outstanding weighted average exercise price | $ 1.34 | $ 1.36 | $ 1.33 | |||||||
Stock options intrinsic value | $ 635,536 | $ 2,150,912 | ||||||||
Number of stock options granted | 126,567 | 280,000 | ||||||||
Stock option weighted average exercise price per share | $ 1.15 | $ 1.75 | ||||||||
Stock options granted, term | 7 years 2 months 12 days | 8 years 18 days | ||||||||
Number of stock options vested | 584,895 | 972,651 | ||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 3 years 11 months 23 days | |||||||||
Debt instrument, face amount | $ 665,000 | |||||||||
Accrued interest | $ 35,000 | |||||||||
Class of warrant or right, outstanding | 3,826,658 | 3,826,658 | ||||||||
Class of warrant or right, outstanding, weighted average exercise price | $ 1.05 | $ 1.05 | ||||||||
Class of warrant or right, outstanding, intrinsic value | $ 1,375,990 | $ 3,633,335 | ||||||||
Series B Preferred Stock [Member] | Predecessor Warrants [Member] | ||||||||||
Class of warrant or right, number of securities called by warrants or rights | 295,945 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 1.25 | |||||||||
Series B Preferred Stock [Member] | Placement Agent Warrants [Member] | ||||||||||
Class of warrant or right, number of securities called by warrants or rights | 127,346 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 1.25 | |||||||||
Series B Preferred Stock [Member] | Private Placement [Member] | ||||||||||
Class of warrant or right, number of securities called by warrants or rights | 423,291 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 1.25 | |||||||||
Class of warrant or right, expiration period | 5 years | |||||||||
Series B Preferred Stock [Member] | Private Placement [Member] | Protagenic Warrants [Member] | ||||||||||
Class of warrant or right, number of securities called by warrants or rights | 3,403,367 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 1.05 | |||||||||
Employees [Member] | ||||||||||
Compensation expense | $ 562,734 | |||||||||
Unamortized stock option expense | 287,905 | |||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | 144,423 | |||||||||
Non-Employees [Member] | ||||||||||
Compensation expense | 235,027 | |||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 143,482 | |||||||||
Four Consultant [Member] | ||||||||||
Number of stock options granted | 80,000 | |||||||||
Stock options granted, term | 10 years | |||||||||
Stock options vesting, term | 48 months | |||||||||
Stock option exercise price | $ 1.75 | |||||||||
Number of stock options vested | 50,000 | |||||||||
Number of options expected to vest | 30,000 | |||||||||
Stock Option [Member] | ||||||||||
Number of stock options granted | 126,567 | 280,000 | ||||||||
Stock option weighted average exercise price per share | $ 1 | $ 1.25 | ||||||||
Compensation expense | $ 797,761 | $ 1,130,071 | ||||||||
Stock Options [Member] | ||||||||||
Number of stock options granted | 25,000 | 101,567 | ||||||||
Stock option weighted average exercise price per share | $ 1.75 | $ 1 | ||||||||
Stock options granted, term | 10 years | 10 years | ||||||||
Number of stock options vested | 59,900 | |||||||||
Stock options fair value | $ 36,374 | $ 199,807 | ||||||||
Number of options shares issued for settlement | 59,900 | |||||||||
Settlement amount | $ 29,850 | |||||||||
Loss in settlement | $ 99,541 | |||||||||
Stock Options [Member] | Vest bi-Weekly Over Two Months [Member] | ||||||||||
Number of stock options vested | 41,667 | |||||||||
The 2016 Plan [Member] | ||||||||||
Number of additional shares grants for issuance | 564,378 | 564,378 | ||||||||
Number of shares available for grant | 1,693,134 | 1,693,134 | 4,304,245 | |||||||
Share-based payment award, expiration period | 10 years | |||||||||
2016 Equity Compensation Plan [Member] | Consulting Agreement [Member] | ||||||||||
Number of stock options granted | 200,000 | |||||||||
Stock options granted, term | 10 years | |||||||||
Stock options vesting, term | 48 months | |||||||||
Stock option exercise price | $ 1.75 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Expected dividend yield | 0.00% | 0.00% |
Expected life in years | 10 years | |
Minimum [Member] | ||
Exercise price | $ 1 | $ 1.25 |
Risk free interest rate | 2.09% | 2.73% |
Expected life in years | 3 years 9 months | |
Expected volatility | 137.00% | 139.00% |
Maximum [Member] | ||
Exercise price | $ 1.75 | $ 1.75 |
Risk free interest rate | 2.70% | 2.85% |
Expected life in years | 9 years 4 months 24 days | |
Expected volatility | 140.00% | 146.00% |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Stock Options outstanding, Beginning | 3,846,299 | 3,566,299 |
Stock Options, Granted | 126,567 | 280,000 |
Stock Options, Expired | (137,500) | |
Stock Options outstanding, Ending | 3,835,366 | 3,846,299 |
Weighted Average Exercisable Price, Stock Options Outstanding, Beginning | $ 1.36 | $ 1.33 |
Weighted Average Exercisable Price, Stock Options Outstanding, Granted | 1.15 | 1.75 |
Weighted Average Exercisable Price, Stock Options Outstanding, Expired | 1.75 | |
Weighted Average Exercisable Price, Stock Options Outstanding, Ending | $ 1.34 | $ 1.36 |
Weighted Average Remaining Life, Stock Options Outstanding, Beginning | 7 years 2 months 12 days | 8 years 18 days |
Weighted Average Remaining Life, Stock Options Outstanding, Granted | 9 years 2 months 12 days | 9 years 1 month 24 days |
Weighted Average Remaining Life, Stock Options Outstanding, Ending | 6 years 7 days | 7 years 2 months 12 days |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Share-based Compensation Nonvested Shares (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Nonvested Options, Beginning Balance | 800,210 | 1,492,861 |
Nonvested Options, Granted | 126,567 | 280,000 |
Nonvested Options, Vested | (584,895) | (972,651) |
Nonvested Options, Forfeited | (137,500) | |
Nonvested Options, Ending Balance | 204,382 | 800,210 |
Weighted Average Exercise Price, Beginning Balance | $ 1.63 | $ 1.54 |
Weighted Average Exercise Price, Granted | 1.15 | 1.75 |
Weighted Average Exercise Price, Vested | 1.46 | 1.29 |
Weighted Average Exercise Price, Forfeited | 1.75 | |
Weighted Average Exercise Price, Ending Balance | $ 1.74 | $ 1.63 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Warrant Issuances (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Number of Warrants Outstanding, Beginning | 3,826,658 | 3,826,658 |
Number of Warrants Outstanding, Granted | ||
Number of Warrants Outstanding, Ending | 3,826,658 | 3,826,658 |
Number of Warrants Outstanding, Weighted Average Exercise Price, Beginning | $ 1.05 | $ 1.05 |
Number of Warrants Outstanding, Weighted Average Exercise Price, Granted | ||
Number of Warrants Outstanding, Weighted Average Exercise Price, Ending | $ 1.05 | $ 1.05 |
Number of Warrants Outstanding, Weighted Average Remaining Life | 3 years 8 months 9 days | 4 years 8 months 9 days |
Number of Warrants Outstanding, Weighted Average Remaining Life | 2 years 8 months 9 days | 3 years 8 months 9 days |
Collaborative Agreements (Detai
Collaborative Agreements (Details Narrative) - USD ($) | Feb. 25, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 |
Number of stock options vested | 584,895 | 972,651 | ||
Research and development expense | $ 807,947 | $ 881,186 | ||
Research Agreement [Member] | ||||
Research and development expense | $ 63,905 | $ 107,868 | ||
Stock Options [Member] | ||||
Number of stock options vested | 59,900 | |||
University of Toronto [Member] | ||||
Share-based compensation stock options, grants | 25,000 | |||
Share-based compensation weighted average exercise price | $ 1 | |||
Share-based payment award, expiration period | 10 years | |||
Options expiration date, description | Exercisable over a ten year period which ends on April 1, 2022. | |||
Dr. Lovejoy [Member] | Stock Options [Member] | ||||
Share-based compensation stock options, grants | 533,299 | |||
Share-based compensation weighted average exercise price | $ 1 | |||
Number of stock options vested | 510,903 | |||
Options expiration date, description | These have an exercise price of $1.00, $1.25 or 1.75 and are exercisable over ten or thirteen year periods which end either on March 30, 2021, December 1, 2022, April 15, 2026, March 1, 2027 or on October 16, 2027. | |||
Dr. Lovejoy [Member] | Stock Options [Member] | Minimum [Member] | ||||
Share-based compensation weighted average exercise price | $ 1.25 | |||
Share-based payment award, expiration period | 10 years | |||
Dr. Lovejoy [Member] | Stock Options [Member] | Maximum [Member] | ||||
Share-based compensation weighted average exercise price | $ 1.75 | |||
Share-based payment award, expiration period | 13 years |
Licensing Agreements (Details N
Licensing Agreements (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Royalty payment on behalf of sub-licensee, percentage | 2.50% | |
Revenues | ||
Interest on amounts owed under license agreement, rate | 3.00% | |
Licensing Agreements [Member] | ||
Royalty payment, percentage | 2.50% | |
Up-front sub-license fees, percentage | 10.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax expense | ||
Reconciliation, tax credit, research, amount | 0 | 0 |
Net change in valuation allowance | 661,000 | 457,000 |
Income tax interest and penalties | ||
Federal [Member] | ||
Net operating loss carryforwards | $ 7,161,000 | 6,617,000 |
Operating loss carryforwards expiration description | The losses expire beginning in 2024. | |
State and Local [Member] | ||
Net operating loss carryforwards | $ 7,153,000 | 6,609,000 |
Operating loss carryforwards expiration description | State tax liabilities also through 2035. | |
Canadian [Member] | ||
Net operating loss carryforwards | $ 1,111,000 | $ 1,070,000 |
Operating loss carryforwards expiration description | The Canadian losses expire in stages beginning in 2026. |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (1,698,689) | $ (2,468,805) |
Foreign | (52,222) | (88,726) |
Loss before income taxes | $ (1,750,911) | $ (2,557,531) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income taxes at Federal statutory rate | (21.00%) | (21.00%) |
State income taxes, net of Federal income tax effect | (8.60%) | (8.60%) |
Perm difference | 0.00% | 0.00% |
Foreign tax rate differential | (0.60%) | (0.60%) |
Change in valuation allowance | 30.20% | 30.20% |
Other | 0.00% | 0.00% |
Income tax provision | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
U.S. net operating loss carryforwards | $ 2,894,000 | $ 2,627,000 |
Stock compensation | 784,000 | 359,000 |
Canadian Provincial income tax losses | 29,000 | 56,000 |
Canadian Provincial scientific investment tax credits | (4,000) | |
Gross deferred tax asset | 3,703,000 | 3,042,000 |
Valuation allowance | (3,703,000) | (3,042,000) |
Net deferred tax assets |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 21, 2020 | Apr. 23, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Convertible debt principal amount | $ 665,000 | |||
Number of stock options granted | 126,567 | 280,000 | ||
Stock option exercise price per share | $ 1.15 | $ 1.75 | ||
Number of stock options vested | 584,895 | 972,651 | ||
Subsequent Event [Member] | ||||
Warrant purchase shares of common stock | 100,000 | |||
Warrant expiration description | The expiration date was extended by two years from January 2, 2020 to January 2, 2022. | |||
Warrant exercise price | $ 1.25 | |||
Subsequent Event [Member] | Options [Member] | ||||
Stock option exercise price per share | $ 1.75 | |||
Subsequent Event [Member] | Options [Member] | Twelve Related Parties [Member] | ||||
Number of stock options granted | 1,362,497 | |||
Subsequent Event [Member] | Options [Member] | Sixteen Individuals [Member] | ||||
Number of stock options granted | 1,387,497 | |||
Subsequent Event [Member] | Immediately [Member] | ||||
Number of stock options vested | 187,497 | |||
Subsequent Event [Member] | Over 12 Months [Member] | ||||
Number of stock options vested | 510,000 | |||
Subsequent Event [Member] | Over 24 Months [Member] | ||||
Number of stock options vested | 5,000 | |||
Subsequent Event [Member] | Over 36 Months [Member] | ||||
Number of stock options vested | 420,000 | |||
Subsequent Event [Member] | Over 48 Months [Member] | ||||
Number of stock options vested | 265,000 | |||
Subsequent Event [Member] | 12 Convertible Notes [Member] | ||||
Convertible debt principal amount | $ 425,000 | |||
Debt interest percentage | 6.00% | |||
Increase in interest rate | 12.00% | |||
Maturity date | Nov. 6, 2023 | |||
Conversion exercise price | $ 1.25 |