Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Protagenic Therapeutics, Inc.\new | |
Entity Central Index Key | 0001022899 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 Common Stock, Shares Outstanding | 14,643,780 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 191,674 | $ 671,091 |
Prepaid expenses | 4,468 | 208,156 |
TOTAL CURRENT ASSETS | 196,142 | 879,247 |
TOTAL ASSETS | 196,142 | 879,247 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 650,968 | 571,517 |
Derivative liability | 83,670 | |
TOTAL CURRENT LIABILITIES | 650,968 | 655,187 |
Note Payable | 100,000 | |
PIK convertible notes payable, net of debt discount | 1,126,048 | 1,081,384 |
PIK convertible notes payable, net of debt discount - related parties | 301,723 | 292,412 |
TOTAL LIABILITIES | 2,178,739 | 2,028,983 |
STOCKHOLDERS' DEFICIT | ||
Common stock, $.0001 par value, 100,000,000 shares authorized, 10,610,603 and 10,360,480 shares issued and outstanding at March 31, 2021, and December 31, 2020 | 1,061 | 1,036 |
Additional paid-in-capital | 17,092,824 | 16,719,749 |
Accumulated deficit | (18,905,388) | (17,698,936) |
Accumulated other comprehensive loss | (171,095) | (171,586) |
TOTAL STOCKHOLDERS' DEFICIT | (1,982,597) | (1,149,736) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 196,142 | 879,247 |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.000001 par value; 20,000,000 shares authorized; 872,766 shares issued and outstanding in the following classes: | $ 1 | $ 1 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 872,766 | |
Preferred stock, shares outstanding | 872,766 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 10,610,603 | 10,360,480 |
Common stock, shares outstanding | 10,610,603 | 10,360,480 |
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 (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING AND ADMINISTRATIVE EXPENSES | ||
Research and development | $ 592,351 | $ 65,959 |
General and administrative | 613,839 | 454,777 |
TOTAL OPERATING AND ADMINISTRATIVE EXPENSES | 1,206,190 | 520,736 |
LOSS FROM OPERATIONS | (1,206,190) | (520,736) |
OTHER (EXPENSE) INCOME | ||
Interest income | 5 | 384 |
Interest expense | (83,937) | (38,986) |
Change in fair value of derivative liability | 83,670 | 60,749 |
TOTAL OTHER INCOME (EXPENSES) | (262) | 22,147 |
LOSS BEFORE INCOME TAX | (1,206,452) | (498,589) |
INCOME TAX EXPENSE | ||
NET LOSS | (1,206,452) | (498,589) |
Other Comprehensive Loss - net of tax | ||
Foreign exchange translation gain (loss) | 491 | (2,419) |
TOTAL COMPREHENSIVE LOSS | $ (1,205,961) | $ (501,008) |
Net loss per common share - Basic and Diluted | $ (0.11) | $ (0.05) |
Weighted average common shares - Basic and Diluted | 10,520,484 | 10,261,419 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Stockholders' Deficit (Unaudited) - USD ($) | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
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 | ||||
Foreign currency translation loss | (2,419) | (2,419) | ||||
Stock compensation - stock options | 360,436 | 360,436 | ||||
Debt discount from beneficial conversion feature | 89,204 | 89,204 | ||||
Issuance of options for settlement of accrued payroll | 93,950 | 93,950 | ||||
Modification of warrants | 5,861 | 5,861 | ||||
Net loss | (498,589) | (498,589) | ||||
Balance at Mar. 31, 2020 | $ 1 | $ 1,026 | 15,236,623 | (15,648,790) | (174,783) | (585,923) |
Balance, shares at Mar. 31, 2020 | 872,766 | 10,261,419 | ||||
Balance at Dec. 31, 2020 | $ 1 | $ 1,036 | 16,719,749 | (17,698,936) | (171,586) | (1,149,736) |
Balance, shares at Dec. 31, 2020 | 872,766 | 10,360,480 | ||||
Foreign currency translation loss | 491 | 491 | ||||
Stock compensation - stock options | 345,975 | 345,975 | ||||
Exercise of options | $ 1 | (1) | ||||
Exercise of options, shares | 10,000 | 10,000 | ||||
Exercise of warrants | $ 24 | 27,101 | $ 27,125 | |||
Exercise of warrants, shares | 240,123 | |||||
Net loss | (1,206,452) | (1,206,452) | ||||
Balance at Mar. 31, 2021 | $ 1 | $ 1,061 | $ 17,092,824 | $ (18,905,388) | $ (171,095) | $ (1,982,597) |
Balance, shares at Mar. 31, 2021 | 872,766 | 10,610,603 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,206,452) | $ (498,589) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation expense | 84 | |
Stock based compensation | 345,975 | 360,436 |
Change in fair value of the derivative liability | (83,670) | (60,749) |
Amortization of debt discount | 53,975 | 27,357 |
Loss on settlement of accounts payable | 5,861 | |
Changes in operating assets and liabilities | ||
Prepaid expenses | 203,688 | 11,669 |
Accounts payable and accrued expenses | 78,777 | (210,475) |
NET CASH USED IN OPERATING ACTIVITIES | (607,707) | (364,406) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Exercise of warrants for cash | 27,125 | |
Proceeds from notes payable | 100,000 | |
Proceeds from convertible notes | 330,000 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 127,125 | 330,000 |
Effect of exchange rate on cash | 1,165 | (10,245) |
NET DECREASE IN CASH | (479,417) | (44,651) |
CASH, BEGINNING OF YEAR | 671,091 | 753,972 |
CASH, END OF YEAR | 191,674 | 753,972 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest expense | ||
Cash paid for income taxes | ||
NONCASH FINANCING AND INVESTING TRANSACTIONS | ||
Debt discount from beneficial conversion feature | 89,204 | |
Issuance of options for settlement of accounts payable | $ 93,950 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2021 | |
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, 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. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2021 | |
Liquidity | |
Liquidity | NOTE 2 - LIQUIDITY As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses resulting in an accumulated deficit. The Company anticipates further losses in the development of its business. The Company had 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 cash resources as of March 31, 2021, the Company has sufficient resources to fund its operations only through May 2021. However, based on cash resources that it received in April 2021 as a consequence of an equity offering, together with 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 2023. Absent generation of sufficient revenue from the execution of the Company’s business plan and sales revenue is not anticipated before 2024, the Company will need to obtain debt or equity financing by the third quarter of 2023. Because of these factors, the Company believes that this alleviates the substantial doubt in connection with the Company’s ability to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - SUMMARY OF SIGNFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC” for interim financial information. In the opinion of the Company’s management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2021 and 2020. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2020, which contain the audited financial statements and notes thereto, for the years ended December 31, 2020 and 2019 included within the Company’s Form 10-K filed with the SEC on March 25, 2021. The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Principles of consolidation The condensed 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 condensed consolidated financial statements. Reclassifications: Reclassifications of prior periods have been made to conform with current year presentation Use of estimates The preparation of condensed 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 condensed consolidated financial statements include 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. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2021 and December 31, 2020, the Company did not have any cash equivalents. 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 term maturity of those instruments. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. 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 on a recurring basis as of March 31, 2021. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Derivative warrants liabilities $ — $ — $ — $ — $ — The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2020. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Derivative warrants liabilities $ 83,670 $ — $ — $ 83,670 $ 83,670 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 three months ended March 31, 2021 and the year ended December 31, 2020: Fair Value Measurement Using Level 3 Inputs Total Balance, December 31, 2020 $ 83,670 Change in fair value of derivative warrants liabilities (83,670 ) Balance, March 31, 2021 $ - 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 (the “2016 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 dates were calculated using a Black-Scholes option model valued with the following assumptions: December 31, 2020 Exercise price 1.25 Risk free interest rate 0.09 % Dividend yield 0.00 % Expected volatility 169 % Contractual term 0.14 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 three months ended March 31, 2021 and 2020, the Company marked the derivative feature of the warrants to fair value and recorded a gain of $83,670 and a gain of $60,749 relating to the change in fair value, respectively. The warrants expired on February 21, 2021, resulting in the elimination of the 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 condensed consolidated statements 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, non-employees, 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. 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 condensed consolidated statements of operations. Potentially Outstanding For the Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Conversion Feature Shares Common shares issuable under the conversion feature of preferred shares 872,766 872,766 Stock Options 5,673,861 3,925,682 Warrants 3,483,767 3,826,658 Convertible Notes 1,598,000 800,000 Total potentially outstanding dilutive common shares 11,628,394 9,425,106 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 condensed consolidated statements of operations and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the condensed consolidated statements of operations 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 condensed consolidated statements of operations 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. 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 | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 December 31, 2020 Accounting $ 36,161 $ 36,161 Research and development 381,062 393,496 Other 233,745 141,860 Total $ 650,968 $ 571,517 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 was paid upon the signing of the agreement, 35% of the total price is to be paid 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 consultant. As of March 31, 2021 and December 31, 2020, the Company has paid $174,106 and $174,106 to the consultant and there is a balance of $319,799 and $319,799 due, respectively. |
Notes Payable And Convertible N
Notes Payable And Convertible Note Payable (PIK Notes) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable And Convertible Note Payable (PIK Notes) | NOTE 5 – NOTE PAYABLE AND CONVERTIBLE NOTE PAYABLE (PIK NOTES) Note Payable On March 1, 2021, the Company entered into a $100,000 promissory note. This note is due on February 28, 2026 and accrues interest at a rate of 5% per annum or 7.5% per annum in the case of default. In the event that the Company completes a financing of no less than $7.5 million, then the note holder will be issued warrants valued at $25,000 with an exercise price equal to 110% of the offering cost of the common stock in the financing. These warrants will have a term of five years. As of March 31, 2021 and December 31, 2020, the Company owes $100,000 and $0 on the outstanding Note, respectively. Convertible Notes Payable During the three months ended March 31, 2021 and 2020, the Company amortized $44,664 and $17,943 of the debt discount, respectively. At March 31, 2021 and December 31, 2020, the Company had an unamortized debt discount of $471,452 and $516,116, respectively. As of March 31, 2021 and December 31, 2020, the Company owes $1,597,500 and $1,597,500 on the outstanding Convertible Notes, respectively. Maturity Date of Notes for Twelve Months Ending March 31, 2021, Amount due 2022 $ - 2023 - 2024 1,597,500 2025 - 2026 100,000 Total $ 1,697,500 Convertible Notes Payable – Related Parties During the three months ended March 31, 2021 and 2020, the Company amortized $9,311 and $9,414 of the debt discount, respectively. At March 31, 2021 and December 31, 2020, the Company had an unamortized debt discount of $98,277 and $107,588, respectively. As of March 31, 2021 and December 31, 2020, the Company owes $400,000 and $400,000 on the outstanding Convertible Notes, respectively. Maturity Date of Notes for Twelve Months Ending March 31, 2021, Amount due 2022 $ - 2023 - 2024 400,000 2025 - 2026 - Total $ 400,000 |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 6 - 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, January 1, 2019 and January 1, 2020, 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 these increases, as of March 31, 2021 and December 31, 2020, the aggregate number of shares of common stock available for awards under the 2016 Plan was 4,868,623 shares and 4,868,623 shares, respectively. Options issued under the 2016 Plan are exercisable for up to ten years from the date of issuance. There were 5,673,861 options outstanding as of March 31, 2021. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 5.60 Expected dividend yield 0 % Risk free interest rate 0.81%-1.54 % Expected life in years 5-10 Expected volatility 149%-158 % There were 5,597,861 options outstanding as of December 31, 2020. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 1.75 Expected dividend yield 0 % Risk free interest rate 0.64%-1.61 % Expected life in years 10 Expected volatility 140%-146 % The following is an analysis of the stock option grant activity under the Plan: Weighted Average Weighted Average Number Exercise Price Remaining Life Stock Options Outstanding December 31, 2020 5,597,861 $ 1.47 6.48 Granted 366,000 $ 5.60 9.69 Expired (280,000 ) $ 1.00 - Exercised (10,000 ) $ 1.00 - Outstanding March 31, 2021 5,673,861 $ 1.76 6.78 A summary of the status of the Company’s nonvested options as of March 31, 2021, and changes during the three months ended March 31, 2021, is presented below: Nonvested Options Options Weighted- Average Nonvested at December 31, 2020 862,833 $ 1.75 Granted 366,000 $ 5.60 Vested (106,291 ) $ 4.70 Forfeited - $ - Nonvested at March 31, 2021 1,122,542 $ 2.93 As of March 31, 2021, the Company had 5,673,861 shares issuable under options outstanding at a weighted average exercise price of $1.76 and an intrinsic value of $23,025,089. The total number of options granted during the three months ended March 31, 2021 and 2020 was 366,000 and 1,387,497, respectively. The exercise price for these options was $5.60 per share. The Company recognized compensation expense related to options issued of $345,975 and $360,436 during the three months ended March 31, 2021 and 2020, respectively, in which $344,499 and $325,794 is included in general and administrative expenses and $1,476 and $34,641 in research and development expenses, respectively. For the three months ended March 31, 2021, $136,203 of the stock compensation was related to employees and $209,772 was related to non-employees. As of March 31, 2021, the unamortized stock option expense was $2,778,726 with $397,760 being related to employees and $2,380,966 being related to non-employees. As of March 31, 2021, the weighted average period for the unamortized stock compensation to be recognized is 3.50 years. On February 25, 2021, the Company issued a total of 366,000 options to purchase shares of the Company’s common stock to five individuals, with 350,000 of these options being issued to related parties. These options had a grant date fair value of $2,009,063. These options have an exercise price of $5.60. 16,000 of the options vest immediately and 350,000 of the options vest monthly over 48 months. These options were approved by the board of directors on February 25, 2021. During the three months ended March 31, 2021, 10,000 options were exercised for 10,000 shares of the Company’s common stock. These options had an exercise price of $1.00. Warrants: A summary of warrant issuances are as follows: Weighted Average Weighted Average Number Exercise Price Remaining Life Warrants Outstanding December 31, 2020 4,007,058 $ 1.06 1.86 Expired (150,249 ) 1.25 - Exercised (373,042 ) 1.25 - Outstanding March 31, 2021 3,483,767 $ 1.03 1.85 As of March 31, 2021, the Company had 3,483,767 shares issuable under warrants outstanding at a weighted average exercise price of $1.03 and an intrinsic value of $16,684,157. During the three months ended March 31, 2021, 373,042 warrants were exercised for 240,123 shares of the Company’s common stock. The Company received $27,125 from these exercises. |
Collaborative Agreements
Collaborative Agreements | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Agreements | NOTE 7 - COLLABORATIVE AGREEMENTS The Company and the University of Toronto (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, 2017. 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 March 31, 2021, Dr. David Lovejoy of the University has been granted 553,299 stock options, of which 431,112 are fully vested and 100,000 have expired. 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, October 16, 2027 or on February 13, 2030. The sponsorship research and development expenses pertaining to the Research Agreements were $0 and $0 for the three months ended March 31, 2021 and 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 - COMMITMENTS AND CONTINGENCIES 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 three months ended March 31, 2021 and 2020 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 | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9 – 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. On February 25, 2021, the Company issued 366,000 options to purchase common stock to 5 individuals, with 350,000 of those options going to related parties. These options had an exercise price of $5.60 and a term of 5 or 10 years. (See Note 6) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10- SUBSEQUENT EVENTS Subsequent to the period, the Company issued 493,177 shares of the Company’s common stock for the net exercise of 695,137 warrants. 231,277 of these shares of common stock were issued to a related party. Subsequent to the period, the Company issued 360,000 shares of the Company’s common stock for the exercise of 360,000 options. The Company received proceeds of $532,500 from the exercise. On April, 29, 2021, the Company completed a public offering (“the Offering”) to sell aggregate of 3,180,000 shares of the Company’s common stock together with warrants to purchase an aggregate of 3,180,000 shares of common stock. The Company also granted the underwriters a 45-day option to purchase up to an additional 477,000 shares of Common Stock (the “Option Shares”) and/or warrants to purchase an aggregate of 477,000 shares of Common Stock at the same price. Net proceeds from the Offering were approximately $11.4 million (excluding any sale of the Option Shares), after deducting underwriting discounts and commissions and public offering expenses payable by the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC” for interim financial information. In the opinion of the Company’s management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2021 and 2020. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2020, which contain the audited financial statements and notes thereto, for the years ended December 31, 2020 and 2019 included within the Company’s Form 10-K filed with the SEC on March 25, 2021. The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. |
Principles of Consolidation | Principles of consolidation The condensed 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 condensed consolidated financial statements. |
Reclassifications | Reclassifications: Reclassifications of prior periods have been made to conform with current year presentation |
Use of Estimates | Use of estimates The preparation of condensed 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 condensed consolidated financial statements include 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. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2021 and December 31, 2020, the Company did not have any cash equivalents. |
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 term maturity of those instruments. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. 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 on a recurring basis as of March 31, 2021. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Derivative warrants liabilities $ — $ — $ — $ — $ — The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2020. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Derivative warrants liabilities $ 83,670 $ — $ — $ 83,670 $ 83,670 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 three months ended March 31, 2021 and the year ended December 31, 2020: Fair Value Measurement Using Level 3 Inputs Total Balance, December 31, 2020 $ 83,670 Change in fair value of derivative warrants liabilities (83,670 ) Balance, March 31, 2021 $ - 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 (the “2016 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 dates were calculated using a Black-Scholes option model valued with the following assumptions: December 31, 2020 Exercise price 1.25 Risk free interest rate 0.09 % Dividend yield 0.00 % Expected volatility 169 % Contractual term 0.14 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 three months ended March 31, 2021 and 2020, the Company marked the derivative feature of the warrants to fair value and recorded a gain of $83,670 and a gain of $60,749 relating to the change in fair value, respectively. The warrants expired on February 21, 2021, resulting in the elimination of the derivative liability. |
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 condensed consolidated statements 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, non-employees, 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. |
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 condensed consolidated statements of operations. Potentially Outstanding For the Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Conversion Feature Shares Common shares issuable under the conversion feature of preferred shares 872,766 872,766 Stock Options 5,673,861 3,925,682 Warrants 3,483,767 3,826,658 Convertible Notes 1,598,000 800,000 Total potentially outstanding dilutive common shares 11,628,394 9,425,106 |
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 condensed consolidated statements of operations and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the condensed consolidated statements of operations 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 condensed consolidated statements of operations 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. |
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) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of March 31, 2021. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Derivative warrants liabilities $ — $ — $ — $ — $ — The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2020. Carrying Fair Value Measurement Using Value Level 1 Level 2 Level 3 Total Derivative warrants liabilities $ 83,670 $ — $ — $ 83,670 $ 83,670 |
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 three months ended March 31, 2021 and the year ended December 31, 2020: Fair Value Measurement Using Level 3 Inputs Total Balance, December 31, 2020 $ 83,670 Change in fair value of derivative warrants liabilities (83,670 ) Balance, March 31, 2021 $ - |
Schedule of Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | 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 (the “2016 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 dates were calculated using a Black-Scholes option model valued with the following assumptions: December 31, 2020 Exercise price 1.25 Risk free interest rate 0.09 % Dividend yield 0.00 % Expected volatility 169 % Contractual term 0.14 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 condensed consolidated statements of operations. Potentially Outstanding For the Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Conversion Feature Shares Common shares issuable under the conversion feature of preferred shares 872,766 872,766 Stock Options 5,673,861 3,925,682 Warrants 3,483,767 3,826,658 Convertible Notes 1,598,000 800,000 Total potentially outstanding dilutive common shares 11,628,394 9,425,106 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following at: March 31, 2021 December 31, 2020 Accounting $ 36,161 $ 36,161 Research and development 381,062 393,496 Other 233,745 141,860 Total $ 650,968 $ 571,517 |
Notes Payable And Convertible_2
Notes Payable And Convertible Note Payable (PIK Notes) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Convertible Notes Payable [Member] | |
Schedule of Maturity Date of Notes | Maturity Date of Notes for Twelve Months Ending March 31, 2021, Amount due 2022 $ - 2023 - 2024 1,597,500 2025 - 2026 100,000 Total $ 1,697,500 |
Convertible Notes Payable - Related Party [Member] | |
Schedule of Maturity Date of Notes | Maturity Date of Notes for Twelve Months Ending March 31, 2021, Amount due 2022 $ - 2023 - 2024 400,000 2025 - 2026 - Total $ 400,000 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | There were 5,673,861 options outstanding as of March 31, 2021. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 5.60 Expected dividend yield 0 % Risk free interest rate 0.81%-1.54 % Expected life in years 5-10 Expected volatility 149%-158 % There were 5,597,861 options outstanding as of December 31, 2020. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows: Exercise price $ 1.75 Expected dividend yield 0 % Risk free interest rate 0.64%-1.61 % Expected life in years 10 Expected volatility 140%-146 % |
Schedule of Share-based Compensation, Stock Options, Activity | The following is an analysis of the stock option grant activity under the Plan: Weighted Average Weighted Average Number Exercise Price Remaining Life Stock Options Outstanding December 31, 2020 5,597,861 $ 1.47 6.48 Granted 366,000 $ 5.60 9.69 Expired (280,000 ) $ 1.00 - Exercised (10,000 ) $ 1.00 - Outstanding March 31, 2021 5,673,861 $ 1.76 6.78 |
Schedule of Share-based Compensation Nonvested Shares | A summary of the status of the Company’s nonvested options as of March 31, 2021, and changes during the three months ended March 31, 2021, is presented below: Nonvested Options Options Weighted- Average Nonvested at December 31, 2020 862,833 $ 1.75 Granted 366,000 $ 5.60 Vested (106,291 ) $ 4.70 Forfeited - $ - Nonvested at March 31, 2021 1,122,542 $ 2.93 |
Summary of Warrant Issuances | A summary of warrant issuances are as follows: Weighted Average Weighted Average Number Exercise Price Remaining Life Warrants Outstanding December 31, 2020 4,007,058 $ 1.06 1.86 Expired (150,249 ) 1.25 - Exercised (373,042 ) 1.25 - Outstanding March 31, 2021 3,483,767 $ 1.03 1.85 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2021USD ($)shares | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Cash equivalents | |||
Derivative, gain (loss) on derivative, net | $ 83,670 | $ 60,749 | |
Warrant expiry date | Feb. 21, 2021 | ||
Dividend Yield [Member] | |||
Derivative liability measurement input | 0 | 0 | |
Warrant expiry date | Feb. 21, 2021 | ||
Private Placement [Member] | |||
Fair value of derivative feature | $ 127,346 | ||
Class of warrant or right, issued | shares | 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 ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Reported Value Measurement [Member] | ||
Derivative warrants liabilities | $ 83,670 | |
Estimate of Fair Value Measurement [Member] | ||
Derivative warrants liabilities | 83,670 | |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Derivative warrants liabilities | ||
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivative warrants liabilities | ||
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Derivative warrants liabilities | $ 83,670 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Accounting Policies [Abstract] | |
Balance at beginning | $ 83,670 |
Change in fair value of derivative warrants liabilities | (83,670) |
Balance at end |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Details) | 12 Months Ended | |
Dec. 31, 2020$ / shares | Mar. 31, 2021 | |
Measurement Input, Exercise Price [Member] | ||
Share price | $ 1.25 | |
Measurement Input, Risk Free Interest Rate [Member] | ||
Derivative liability measurement input | 0.09 | |
Dividend Yield [Member] | ||
Derivative liability measurement input | 0 | 0 |
Expected Volatility [Member] | ||
Derivative liability measurement input | 169 | |
Contractual Term [Member] | ||
Derivative liability measurement input, contractual term | 1 month 20 days |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total potentially outstanding dilutive common shares | 11,628,394 | 9,425,106 |
Conversion Feature Shares [Member] | ||
Total potentially outstanding dilutive common shares | 872,766 | 872,766 |
Stock Options [Member] | ||
Total potentially outstanding dilutive common shares | 5,673,861 | 3,925,682 |
Warrants [Member] | ||
Total potentially outstanding dilutive common shares | 3,483,767 | 3,826,658 |
Convertible Notes [Member] | ||
Total potentially outstanding dilutive common shares | 1,598,000 | 800,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details Narrative) - USD ($) | Dec. 31, 2020 | Mar. 31, 2021 | 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 was paid upon the signing of the agreement, 35% of the total price is to be paid 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 consultant. | ||
Commitment cost paid | $ 174,106 | $ 174,106 | |
Balance due amount | $ 319,799 | $ 319,799 | |
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 ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounting | $ 36,161 | $ 36,161 |
Research and development | 381,062 | 393,496 |
Other | 233,745 | 141,860 |
Total | $ 650,968 | $ 571,517 |
Notes Payable And Convertible_3
Notes Payable And Convertible Note Payable (PIK Notes) (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 01, 2021 | Dec. 31, 2020 | |
Debt amortized debt discount | $ 53,975 | $ 27,357 | ||
Promissory Note [Member] | ||||
Promissory note | $ 100,000 | $ 100,000 | ||
Debt interest percentage | 110.00% | 5.00% | ||
Maturity date | Feb. 28, 2026 | |||
Debt default interest percentage | 7.50% | |||
Fair value of warrants issued | $ 25,000 | |||
Promissory Note [Member] | Maximum [Member] | ||||
Promissory note | $ 7,500,000 | |||
Unsecured Convertible Notes [Member] | ||||
Promissory note | 400,000 | 400,000 | ||
Debt amortized debt discount | 44,664 | |||
Debt unamortized debt discount | 471,452 | 516,116 | ||
Convertible notes payable outstanding | 1,597,500 | 1,597,500 | ||
Unsecured Convertible Notes with Related Parties [Member] | ||||
Debt amortized debt discount | 9,311 | $ 9,414 | ||
Debt unamortized debt discount | $ 98,277 | $ 107,588 |
Notes Payable And Convertible_4
Notes Payable And Convertible Note Payable (PIK Notes) - Schedule of Maturity Date of Notes (Details) | Mar. 31, 2021USD ($) |
Convertible Notes Payable [Member] | |
2022 | |
2023 | |
2024 | 1,597,500 |
2025 | |
2026 | 100,000 |
Total | 1,697,500 |
Convertible Notes Payable - Related Party [Member] | |
2022 | |
2023 | |
2024 | 400,000 |
2025 | |
2026 | |
Total | $ 400,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Feb. 25, 2021 | Feb. 25, 2020 | Jan. 02, 2020 | Jan. 02, 2019 | Jan. 02, 2017 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Stock options outstanding | 5,673,861 | 5,597,861 | ||||||
Stock options outstanding weighted average exercise price | $ 5.60 | $ 1.76 | ||||||
Stock options intrinsic value | $ 23,025,089 | $ 38,328 | ||||||
Number of stock options granted | 366,000 | |||||||
Stock option weighted average exercise price per share | $ 5.60 | |||||||
Number of stock options vested | 106,291 | |||||||
Stock issued during the period exercised | 10,000 | |||||||
Class of warrant or right, outstanding | 3,483,767 | 4,007,058 | ||||||
Common Stock [Member] | ||||||||
Stock issued during the period exercised | 10,000 | |||||||
Warrants outstanding | 240,123 | |||||||
Proceeds from warrants exercised | $ 27,125 | |||||||
Warrants [Member] | ||||||||
Class of warrant or right, outstanding | 3,483,767 | |||||||
Class of warrant or right, outstanding, weighted average exercise price | $ 1.03 | |||||||
Class of warrant or right, outstanding, intrinsic value | $ 16,684,157 | $ 782,668 | ||||||
Warrants outstanding | 373,042 | |||||||
Options to Related Party [Member] | ||||||||
Stock options outstanding | 10,000 | |||||||
Stock options outstanding weighted average exercise price | $ 1 | |||||||
Stock issued during the period exercised | 10,000 | |||||||
Employees [Member] | ||||||||
Compensation expense | $ 136,203 | |||||||
Unamortized stock option expense | 397,760 | |||||||
Non-Employees [Member] | ||||||||
Compensation expense | 209,772 | |||||||
Unamortized stock option expense | $ 2,380,966 | |||||||
Five Individuals [Member] | ||||||||
Number of stock options granted | 366,000 | |||||||
Stock Options [Member] | ||||||||
Number of stock options granted | 366,000 | 1,387,497 | ||||||
Stock option weighted average exercise price per share | $ 5.60 | |||||||
Compensation expense | $ 345,975 | $ 360,436 | ||||||
Stock Options [Member] | Options Vested Over 48 Months [Member] | ||||||||
Number of stock options vested | 16,000 | 350,000 | ||||||
Stock Options [Member] | Settlement of Accrued Compensation [Member] | ||||||||
Number of stock options granted | 2,009,063 | |||||||
Stock option weighted average exercise price per share | $ 5.60 | |||||||
Stock Options [Member] | Five Individuals [Member] | ||||||||
Number of stock options granted | 366,000 | |||||||
Stock Options [Member] | Related Parties [Member] | ||||||||
Number of stock options granted | 350,000 | |||||||
Stock Options [Member] | General and Administrative Expense [Member] | ||||||||
Compensation expense | 344,499 | 325,794 | ||||||
Stock Options [Member] | Research and Development Expenses [Member] | ||||||||
Compensation expense | 1,476 | $ 34,641 | ||||||
Stock Options [Member] | ||||||||
Unamortized stock option expense | $ 2,778,726 | |||||||
2016 Plan [Member] | ||||||||
Number of additional shares grants for issuance | 564,378 | 564,378 | 564,378 | |||||
Number of shares available for grant | 1,693,134 | 1,693,134 | 1,693,134 | 4,868,623 | 4,868,623 | |||
Share-based payment award, expiration period | 10 years |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Exercise price | $ 5.60 | $ 1.75 |
Expected dividend yield | 0.00% | 0.00% |
Expected life in years | 10 years | |
Minimum [Member] | ||
Risk free interest rate | 0.81% | 0.64% |
Expected life in years | 5 years | |
Expected volatility | 149.00% | 140.00% |
Maximum [Member] | ||
Risk free interest rate | 1.54% | 1.61% |
Expected life in years | 10 years | |
Expected volatility | 158.00% | 146.00% |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | Feb. 25, 2020 | Mar. 31, 2021 |
Equity [Abstract] | ||
Stock Options Outstanding, Beginning | 5,597,861 | |
Stock Options, Granted | 366,000 | |
Stock Options, Expired | (280,000) | |
Stock Option, Exercised | (10,000) | |
Stock Options Outstanding, Ending | 5,673,861 | |
Weighted Average Exercisable Price, Stock Options Outstanding, Beginning | ||
Weighted Average Exercisable Price, Stock Options Outstanding, Granted | $ 5.60 | |
Weighted Average Exercisable Price, Stock Options Outstanding, Expired | 1 | |
Weighted Average Exercisable Price, Stock Options Outstanding, Exercised | 1 | |
Weighted Average Exercisable Price, Stock Options Outstanding, Ending | $ 5.60 | $ 1.76 |
Weighted Average Remaining Life, Stock Options Outstanding, Beginning | 6 years 5 months 23 days | |
Weighted Average Remaining Life, Stock Options Outstanding, Granted | 9 years 8 months 9 days | |
Weighted Average Remaining Life, Stock Options Outstanding, Ending | 6 years 9 months 11 days |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Share-based Compensation Nonvested Shares (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Equity [Abstract] | |
Nonvested Options, Beginning Balance | shares | 862,833 |
Nonvested Options, Granted | shares | 366,000 |
Nonvested Options, Vested | shares | (106,291) |
Nonvested Options, Forfeited | shares | |
Nonvested Options, Ending Balance | shares | 1,122,542 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.75 |
Weighted Average Exercise Price, Granted | $ / shares | 5.60 |
Weighted Average Exercise Price, Vested | $ / shares | 4.70 |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 2.93 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Warrant Issuances (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Equity [Abstract] | |
Number of Warrants Outstanding, Beginning | shares | 4,007,058 |
Number of Warrants Outstanding, Expired | shares | (150,249) |
Number of Warrants Outstanding, Exercised | shares | (373,042) |
Number of Warrants Outstanding, Ending | shares | 3,483,767 |
Number of Warrants Outstanding, Weighted Average Exercise Price, Beginning | $ / shares | $ 1.06 |
Number of Warrants Outstanding, Weighted Average Exercise Price, Expired | $ / shares | 1.25 |
Number of Warrants Outstanding, Weighted Average Exercise Price, Exercised | $ / shares | 1.25 |
Number of Warrants Outstanding, Weighted Average Exercise Price, Ending | $ / shares | $ 1.03 |
Number of Warrants Outstanding, Weighted Average Remaining Life | 1 year 10 months 10 days |
Number of Warrants Outstanding, Weighted Average Remaining Life | 1 year 10 months 6 days |
Collaborative Agreements (Detai
Collaborative Agreements (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2015 | |
Number of stock options vested | 106,291 | ||
Research and development expense | $ 592,351 | $ 65,959 | |
Research Agreements [Member] | |||
Research and development expense | $ 0 | $ 0 | |
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. David Lovejoy [Member] | Stock Options [Member] | |||
Share-based compensation stock options, grants | 553,299 | ||
Share-based compensation weighted average exercise price | $ 1 | ||
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, October 16, 2027 or on February 13, 2030. | ||
Number of stock options vested | 431,112 | ||
Number of stock options expired | 100,000 | ||
Dr. David 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. David Lovejoy [Member] | Stock Options [Member] | Maximum [Member] | |||
Share-based compensation weighted average exercise price | $ 1.75 | ||
Share-based payment award, expiration period | 13 years |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Royalty payment on behalf of sub-licensee, percentage | 2.50% | |
Sales revenue | ||
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% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - $ / shares | Feb. 25, 2020 | Mar. 31, 2021 |
Number of stock options granted | 366,000 | |
Stock options outstanding weighted average exercise price | $ 5.60 | $ 1.76 |
Option term | 6 years 5 months 23 days | |
Minimum [Member] | ||
Option term | 5 years | |
Maximum [Member] | ||
Option term | 10 years | |
5 Individuals [Member] | ||
Number of stock options granted | 366,000 | |
Related Party [Member] | ||
Number of stock options granted | 350,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 29, 2021 | Feb. 25, 2020 | May 15, 2021 | Mar. 31, 2021 |
Option to purchase shares of common stock | 366,000 | |||
Forecast [Member] | ||||
Proceeds from public offering | $ 11,400,000 | |||
Forecast [Member] | Public Offering [Member] | ||||
Stock issued during the period | 3,180,000 | |||
Warrants to purchase common stock | 3,180,000 | |||
Forecast [Member] | Public Offering [Member] | 45-day Option [Member] | ||||
Stock issued during the period | 477,000 | |||
Warrants to purchase common stock | 477,000 | |||
Related Party [Member] | ||||
Option to purchase shares of common stock | 350,000 | |||
Subsequent Event [Member] | ||||
Stock issued during the period | 493,177 | |||
Warrants to purchase common stock | 695,137 | |||
Subsequent Event [Member] | Common Stock [Member] | ||||
Stock issued during the period | 360,000 | |||
Option to purchase shares of common stock | 360,000 | |||
Proceeds from option exercised | $ 532,500 | |||
Subsequent Event [Member] | Related Party [Member] | ||||
Stock issued during the period | 231,277 |