Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 20, 2022 | Mar. 31, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | NEUROONE MEDICAL TECHNOLOGIES Corp | ||
Trading Symbol | NMTC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Common Stock, Shares Outstanding | 16,238,464 | ||
Entity Public Float | $ 17 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001500198 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Sep. 30, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-40439 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-0863354 | ||
Entity Address, Address Line One | 7599 Anagram Dr. | ||
Entity Address, City or Town | Eden Prairie | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55344 | ||
Local Phone Number | 426-1383 | ||
City Area Code | 952 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 23 | ||
Auditor Name | Baker Tilly US, LLP | ||
Auditor Location | Minneapolis, Minnesota |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 8,160,329 | $ 6,901,346 |
Short-term investments | 2,981,010 | |
Accounts receivable | 33,237 | 48,336 |
Inventory | 704,538 | 98,287 |
Prepaid and other assets | 296,649 | 244,043 |
Total current assets | 12,175,763 | 7,292,012 |
Intangible assets, net | 111,892 | 134,207 |
Right-of-use asset | 181,355 | 288,948 |
Property and equipment, net | 353,599 | 223,329 |
Total assets | 12,822,609 | 7,938,496 |
Current liabilities: | ||
Accounts payable | 927,662 | 528,829 |
Accrued expenses | 715,839 | 644,249 |
Deferred revenue | 1,455,188 | 8,622 |
Total current liabilities | 3,098,689 | 1,181,700 |
Operating lease liability, long term | 119,556 | 202,895 |
Total liabilities | 3,218,245 | 1,384,595 |
Commitments and contingencies (Note 4) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of September 30, 2022 and 2021; no shares issued or outstanding as of September 30, 2022 and 2021. | ||
Common stock, $0.001 par value; 100,000,000 shares authorized as of September 30, 2022 and 2021; 16,216,540 and 12,010,019 shares issued and outstanding as of September 30, 2022 and 2021, respectively. | 16,217 | 12,010 |
Additional paid–in capital | 60,414,959 | 47,369,090 |
Accumulated deficit | (50,826,812) | (40,827,199) |
Total stockholders’ equity | 9,604,364 | 6,553,901 |
Total liabilities and stockholders’ equity | $ 12,822,609 | $ 7,938,496 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,216,540 | 12,010,019 |
Common stock, shares outstanding | 16,216,540 | 12,010,019 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||
Product revenue | $ 171,169 | $ 178,146 |
Cost of product revenue | 241,963 | 275,895 |
Product gross loss | (70,794) | (97,749) |
Collaborations revenue | 1,948,872 | 64,812 |
Operating expenses: | ||
Selling, general and administrative | 6,979,416 | 6,260,266 |
Research and development | 4,929,427 | 3,925,008 |
Total operating expenses | 11,908,843 | 10,185,274 |
Loss from operations | (10,030,765) | (10,218,211) |
Interest expense | (3,053) | |
Net valuation change of instruments measured at fair value | 1,974 | |
Other income | 31,152 | 271,122 |
Net loss | $ (9,999,613) | $ (9,948,168) |
Net loss per share: | ||
Net loss per share Basic (in Dollars per share) | $ (0.63) | $ (0.93) |
Number of shares used in per share calculations: | ||
Number of shares used in per share calculations Basic (in Shares) | 15,998,567 | 10,696,799 |
Statements of Operations (Paren
Statements of Operations (Parentheticals) - $ / shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||
Net loss per share Diluted | $ (0.63) | $ (0.93) |
Number of shares used in per share calculations Diluted | 15,998,567 | 10,696,799 |
Statements of Changes in Stockh
Statements of Changes in Stockholders’ Equity - USD ($) | Common Stock | Additional Paid–In Capital | Accumulated Deficit | Total |
Balance at Sep. 30, 2020 | $ 7,394 | $ 32,937,809 | $ (30,879,031) | $ 2,066,172 |
Balance (in Shares) at Sep. 30, 2020 | 7,393,637 | |||
Issuance of common stock and warrants under securities purchase agreement | $ 4,167 | 12,495,833 | 12,500,000 | |
Issuance of common stock and warrants under securities purchase agreement (in Shares) | 4,166,682 | |||
Conversion of convertible notes into common stock | $ 293 | 1,004,939 | 1,005,232 | |
Conversion of convertible notes into common stock (in Shares) | 292,754 | |||
Issuance costs in connection with securities issuances | (1,198,080) | (1,198,080) | ||
Issuance cost adjustment related to private placement | 50,400 | 50,400 | ||
Stock-based compensation | 1,793,199 | 1,793,199 | ||
Issuance of common stock for consulting services | $ 74 | (74) | ||
Issuance of common stock for consulting services (in Shares) | 74,327 | |||
Issuance of common stock upon vesting of restricted stock units | $ 30 | (30) | ||
Issuance of common stock upon vesting of restricted stock units (in Shares) | 30,021 | |||
Exercise of stock options | $ 1 | 10,145 | 10,146 | |
Exercise of stock options (in Shares) | 1,552 | |||
Exercise of warrants | $ 51 | 274,949 | 275,000 | |
Exercise of warrants (in Shares) | 51,046 | |||
Net loss | (9,948,168) | (9,948,168) | ||
Balance at Sep. 30, 2021 | $ 12,010 | 47,369,090 | (40,827,199) | 6,553,901 |
Balance (in Shares) at Sep. 30, 2021 | 12,010,019 | |||
Issuance of common stock in connection with public offering | $ 4,172 | 13,346,410 | 13,350,582 | |
Issuance of common stock in connection with public offering (in Shares) | 4,172,057 | |||
Issuance cost in connection with public offering | (1,352,280) | (1,352,280) | ||
Issuance of warrants in connection with Zimmer development agreement | 104,562 | 104,562 | ||
Stock-based compensation | 947,212 | 947,212 | ||
Issuance of common stock upon vesting of restricted stock units | $ 35 | (35) | ||
Issuance of common stock upon vesting of restricted stock units (in Shares) | 34,464 | |||
Net loss | (9,999,613) | (9,999,613) | ||
Balance at Sep. 30, 2022 | $ 16,217 | $ 60,414,959 | $ (50,826,812) | $ 9,604,364 |
Balance (in Shares) at Sep. 30, 2022 | 16,216,540 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities | ||
Net loss | $ (9,999,613) | $ (9,948,168) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 118,620 | 80,748 |
Stock-based compensation | 947,212 | 1,793,199 |
Payroll protection program loan forgiveness | (83,333) | |
Fair value change of convertible promissory notes | (1,974) | |
Issuance costs attributed to financing activities | 3,053 | |
Amortization of discounts and premiums on short-term investments | (11,471) | |
Non-cash lease expense | 107,593 | 66,382 |
Issuance of warrants in connection with Zimmer contract amendment | 104,562 | |
Change in assets and liabilities: | ||
Accounts receivable | 15,099 | (48,336) |
Inventory | (606,251) | (98,287) |
Prepaid and other assets | (145,540) | (8,320) |
Accounts payable | 515,438 | (350,313) |
Accrued expenses, deferred revenue, operating lease and other liabilities | 1,434,817 | (7,477) |
Net cash used in operating activities | (7,519,534) | (8,602,826) |
Investing activities | ||
Purchases of short-term investments | (3,469,539) | |
Maturities of short-term investments | 500,000 | |
Purchase of property and equipment | (275,226) | (67,079) |
Net cash used in investing activities | (3,244,765) | (67,079) |
Financing activities | ||
Proceeds from issuance of common stock in connection with public offering and private placements | 13,350,582 | 8,829,236 |
Proceeds from issuance of warrants in connection with private placements | 3,670,764 | |
Issuance costs in connection with convertible promissory notes | (3,053) | |
Issuance costs in connection with public offering and private placements | (1,327,300) | (1,198,080) |
Exercise of warrants | 275,000 | |
Exercise of stock-options | 10,146 | |
Deferred offering costs | (49,159) | |
Net cash provided by financing activities | 12,023,282 | 11,534,854 |
Net increase in cash and cash equivalents | 1,258,983 | 2,864,949 |
Cash and cash equivalents at beginning of year | 6,901,346 | 4,036,397 |
Cash and cash equivalents at end of year | 8,160,329 | 6,901,346 |
Supplemental non-cash financing and investing transactions: | ||
Conversion of convertible promissory notes to equity | 1,005,232 | |
Unpaid issuance costs and non-cash adjustments attributed to convertible notes and private placement | 50,400 | |
Operating lease right of use asset obtained in exchange for operating lease | 73,118 | |
Payroll protection program loan forgiveness | 83,333 | |
Unpaid deferred offering costs | 67,954 | |
Unpaid purchases of property and equipment | 48,651 | |
Reclass of deferred offering costs to additional paid-in capital in connection with public offering | $ 24,980 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Sep. 30, 2022 | |
Organization and Nature of Operations [Abstract] | |
Organization and Nature of Operations | NOTE 1 - Organization and Nature of Operations NeuroOne Medical Technologies Corporation (the “Company” or “NeuroOne”), a Delaware corporation, is an early-stage medical technology company developing comprehensive neuromodulation electroencephalogram (cEEG) and stereoelectrocencephalography (sEEG) recording, monitoring, ablation, and brain stimulation solutions to diagnose and treat patients with epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological disorders. The Company received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) for its Evo cortical technology in November 2019 and in October 2022, we received FDA 510(k) clearance for our Evo sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain. The Company is based in Eden Prairie, Minnesota. Global Economic Conditions Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the COVID-19 pandemic and increased inflation. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected. The COVID-19 pandemic that began in late 2019 introduced significant volatility to the global economy, disrupted supply chains and had a widespread adverse effect on the financial markets. Additionally, the Company’s operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors. Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflict in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates. |
Going Concern
Going Concern | 12 Months Ended |
Sep. 30, 2022 | |
Going Concern [Abstract] | |
Going Concern | NOTE 2 - Going Concern The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern. The Company has incurred losses since inception, negative cash flows from operations, and an accumulated deficit of $50.8 million as of September 30, 2022. To date, the Company’s revenues have not been sufficient to cover its full operating costs, and as such, has been dependent on funding operations through the issuance of debt and sale of equity securities. The Company does not have adequate liquidity to fund its operations without raising additional funds and such actions are not solely within the control of the Company. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this condition. If the Company is unable to raise additional funds, or the Company’s anticipated operating results are not achieved, management believes planned expenditures may need to be reduced in order to extend the time period that existing resources can fund the Company’s operations. The Company intends to fund ongoing activities by utilizing its current cash, cash equivalents and short-term investments on hand, from product and collaborations revenue and by raising additional capital through equity or debt financings. If management is unable to obtain the necessary capital, it may have a material adverse effect on the operations of the Company and the development of its technology, or the Company may have to cease operations altogether. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment, which is the business of development and commercialization of products related to comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and brain stimulation solutions. Accordingly, the Company has a single reporting segment. Reverse Stock Split On March 11, 2021, the Company’s Board of Directors (the “Board”) approved a one-for-three reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 (“common stock”) effective end-of-day March 31, 2021 (the “Reverse Stock Split”). All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise and/or vesting of all outstanding stock options, restricted stock units and warrants to purchase shares of common stock. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split. Any fraction of a share of common stock that was created as a result of the Reverse Stock Split was rounded up to the next whole share. The common stock par value and additional paid-in-capital line items contained in the financial statements were adjusted to account for the Reverse Stock Split for all periods presented. Lastly, the authorized shares and par value per share of the common stock and preferred stock were not adjusted as a result of the Reverse Stock Split. Management’s Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, primarily in connection with the convertible promissory notes when outstanding, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original contractual maturity on date of purchase of less than or equal to three months to be classified and presented as cash equivalents on the Balance Sheets. Cash equivalents are stated at cost, which approximates fair value. The Company’s cash and cash equivalents may include demand deposit accounts with large financial institutions, institutional money market funds, U.S. treasury securities, and corporate notes and bonds. The Company monitors the creditworthiness of the financial institutions, institutional money market funds, and corporations in which the Company invests its surplus funds. The Company has experienced no credit losses from its cash and cash equivalent investments. Short Term Investment The Company invests its excess cash in United States (U.S.) Treasury securities and highly rated corporate securities. The Company intends and has the ability to hold these investments to maturity. Securities with original maturity dates of more than three months are reported as held-to-maturity investments and are recorded at amortized cost, which approximates fair value due to the negligible risk of changes in value due to interest rates. All investments held on September 30, 2022 had contractual maturities of less than one year. The amortized cost and estimated fair values of the Company’s investments as of September 30, 2022 are as follows: Unrealized Unrealized Amortized Holding Holding Losses Fair Short-term: U.S. treasury and corporate notes $ 2,981,010 $ — $ 2,870 $ 2,978,140 Total $ 2,981,010 $ — $ 2,870 $ 2,978,140 Revenue Recognition The Company entered into a development and distribution agreement which has current and future revenue recognition implications. See “Note 7 – Zimmer Development Agreement.” In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Product Revenue Revenues from product sales are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. At the inception of each customer contract, performance obligations are identified and the total transaction price is allocated to the performance obligations. The Company commenced commercial sales of cEEG strip/grid and electrode cable assembly products in the first quarter of fiscal year 2021. Cost of Product Revenue Cost of product revenue consists of the manufacturing and materials costs incurred by the Company’s third-party contract manufacturer in connection with the Company’s strip and grid cortical electrodes (the “Strip/Grid Products”) and outside supplier materials costs in connection with the . In addition, cost of product revenue includes royalty fees incurred in connection with the Company’s license agreements. Collaborations Revenue A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Account Standards Codification (“ASC”) Topic 606. (“ASC 606”). Performance obligations may include license rights, development services, and services associated with regulatory submission and approval processes. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. As part of the accounting for collaboration arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation. Licenses of intellectual property Milestone payments Royalties Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (“FASB”) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. As of September 30, 2022 and 2021, the fair values of cash, cash equivalents, short-term investments, accounts receivable, inventory, prepaid, other assets, accounts payable and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the convertible notes while outstanding were based on both the fair value of our common stock, discount associated with the embedded redemption features, and cash flow models discounted at current implied market rates evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments and are based on Level 3 inputs. There were no transfers between fair value hierarchy levels during the years ended September 30, 2022 and 2021. There were no financial instruments measured on a recurring basis outstanding as of September 30, 2022. The following table provides a roll-forward of the convertible notes measured at fair value on a recurring basis using unobservable level 3 inputs for the year ended September 30, 2021 as follows: 2021 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Conversion of convertible promissory notes to common stock (1,005,232 ) Change in fair value including accrued interest (1,974 ) Balance as of end of period – September 30, 2021 $ — Intellectual Property The Company has entered into two licensing agreements with major research institutions, which allow for access to certain patented technology and know-how. Payments under those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired technology. Property and Equipment Property and equipment is recorded at cost and reduced by accumulated depreciation. Depreciation expense is recognized over the estimated useful lives of the assets using the straight-line method. The estimated useful life for equipment and furniture ranges from three to seven years and three years for software. Tangible assets acquired for research and development activities and that have alternative use are capitalized over the useful life of the acquired asset. Estimated useful lives are periodically reviewed, and, when appropriate, changes are made prospectively. Software purchased for internal use consists primarily of amounts paid for perpetual licenses to third-party software providers and installation costs. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Maintenance and repairs are charged directly to expense as incurred. Impairment of Long-Lived Assets The Company evaluates its long-lived assets, which consist of licensed intellectual property, property and equipment and right of use assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Allowances for Doubtful Accounts The Company records a provision for doubtful accounts, when appropriate, based on historical experience and a detailed assessment of the collectability of its accounts receivable. In estimating the allowance for doubtful accounts, the Company considers, among other factors, the aging of the accounts receivable, its historical write-offs, the credit worthiness of each customer, and general economic conditions. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be recovered. Actual write-offs may be in excess of the Company’s estimated allowance. Inventories Inventories are stated at the lower of cost (using the first-in, first-out “FIFO” method) or net realizable value. The Company calculates inventory valuation adjustments for excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives, and estimated future demand of the products and spare parts. The Company’s inventory is currently comprised of cEEG strip/grid and electrode cable assembly work-in-process and finished good product. The Strip/Grid Products are produced by a third-party contract manufacturer and the Electrode Cable Assembly Products are obtained from outside suppliers. Research and Development Costs Research and development costs are charged to expense as incurred. Research and development expenses may include costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees, and other external costs. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development Selling, General and Administrative Selling, general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with research and development activities. Other significant costs include legal and litigation costs relating to corporate matters, intellectual property costs, professional fees for consultants assisting with regulatory, clinical, product development, financial matters, and beginning in the first quarter of fiscal year 2021, sales and marketing in connection with the commercial sale of cEEG strip/grid and electrode cable assembly products. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation — Stock Compensation Income Taxes For the Company, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Net Loss Per Share For the Company, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s convertible notes, warrants, stock options and restricted stock units, while outstanding, are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the warrants, stock options and restricted stock units. Diluted earnings with respect to the convertible notes utilize the if-converted method. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for both the years ended September 30, 2022 and 2021. The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the years ended September 30: 2022 2021 Warrants 7,103,344 7,503,808 Stock options 1,239,915 1,122,560 Restricted stock units 414,430 11,384 Unissued vested restricted stock units 7,316 1,148 Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses” In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) In August 2020, FASB issued ASU 2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance, |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 4 - Commitments and Contingencies WARF License Agreement The Company has entered into an exclusive start-up company license agreement with the Wisconsin Alumni Research Foundation (“WARF”) for WARF’s neural probe array and thin film micro electrode technology (the “WARF Agreement”). The Company entered into an Amended and Restated Exclusive Start-up Company License Agreement (the “WARF License”) with WARF on January 21, 2020, which amended and restated in full the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September 18, 2019. The WARF License grants to the Company an exclusive license to make, use and sell, in the United States only, products that employ certain licensed patents for a neural probe array or thin-film micro electrode array and method. The Company agreed to pay WARF a royalty equal to a single-digit percentage of our product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect. If the Company or any of its sublicensees contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the contested patent is found to be valid and would be infringed by the Company if not for the WARF License, the royalty rate will be tripled for the remaining term of the WARF License. WARF may terminate the WARF License on 30 days’ written notice if we default on the payments of amounts due to WARF or fail to timely submit development reports, actively pursue our development plan or breach any other covenant in the WARF License and fail to remedy such default in 90 days or in the event of certain bankruptcy events involving us. WARF may also terminate the WARF License (i) on 90 days’ notice if we had failed to have commercial sales of one or more FDA-approved products under the WARF License by June 30, 2021 or (ii) if, after royalties earned on sales begin to be paid, such earned royalties cease for more than four calendar quarters. The first commercial sale occurred on December 7, 2020, prior to the June 30, 2021 deadline. The WARF License otherwise expires by its terms on the date that no valid claims on the patents licensed thereunder remain. The Company expects the latest expiration of a licensed patent to occur in 2030. During the years ended September 30, 2022 and 2021, $137,500 and $125,000 in royalty fees were incurred related to the WARF License, respectively. and were reflected as a component of cost of product revenue. Mayo Agreement The Company has an exclusive license and development agreement with the Mayo Foundation for Medical Education and Research (“Mayo”) related to certain intellectual property and development services for thin film micro electrode technology (“Mayo Agreement”). If the Company is successful in obtaining regulatory approval, the Company is to pay royalties to Mayo based on a percentage of net sales of products of the licensed technology through the term of the Mayo Agreement, set to expire May 25, 2037. During the years ended September 30, 2022 and 2021, $4,861 and $3,894 in royalty fees were incurred, respectively, and were reflected as a component of cost of product revenue. Legal PMT Litigation On March 29, 2018, the Company was served with a complaint filed by PMT Corporation (“PMT”), the former employer of Mark Christianson, a current Company employee, and Wade Fredrickson, a former Company employee. The complaint added the Company, NeuroOne, Inc. and Mr. Christianson to its existing lawsuit against Mr. Fredrickson in the Fourth Judicial District Court of the State of Minnesota. In the lawsuit, PMT claimed that Mr. Fredrickson and Mr. Christianson, by virtue of their work for the Company and their prior work during employment with PMT, breached their non-competition, non-solicitation and non-disclosure obligations, breached their fiduciary duty obligations, were unjustly enriched, engaged in unfair competition, engaged in a civil conspiracy, tortiously interfered with PMT’s contracts and prospective economic advantage, and breached a covenant of good faith and fair dealing. The litigation was settled on September 29, 2022. The associated legal costs associated with all of the Company’s litigation activities amounted to $663,629 and $80,356 during the years ended September 30, 2022 and 2021, respectively, and were recorded in selling, general and administrative expenses in the accompanying statements of operations. Facility Leases Headquarters Lease On October 7, 2019, the Company entered into a non-cancellable lease agreement (the “Lease”) with Biynah Cleveland, LLC, BIP Cleveland, LLC, and Edenvale Investors (together, the “Landlord”) pursuant to which the Company has agreed to lease office space located at 7599 Anagram Drive, Eden Prairie, Minnesota (the “Premises”). The Company took possession of the Premises on November 1, 2019, with the term of the Lease ending 65 months after such date, unless terminated earlier (the “Term”). The initial base rent for the Premises is $6,410 per month for the first 17 months, increasing to $7,076 per month by the end of the Term. In addition, as long as the Company is not in default under the Lease, the Company shall be entitled to an abatement of its base rent for the first 5 months. In addition, the Company will pay its pro rata share of the Landlord’s annual operating expenses associated with the premises, calculated as set forth in the Lease of which the Company is entitled to an abatement of these operating expense for the first 3 months. Los Gatos Lease In July 1, 2021, the Company entered into a non-cancellable facility lease (the “Los Gatos Lease”), pursuant to which the Company agreed to rent office space for its research and development operations located at 718 University Avenue, Suite #111, Los Gatos, California. The term of the New Lease is eighteen months. The facility space under the Los Gatos Lease is approximately 1,162 square feet. The Company took possession of the office space on July 2, 2021. The initial monthly rent under the Los Gatos Lease is approximately $4,241. On November 4, 2022, the Los Gatos Lease was extended for an additional two year term. See “Note 13 – San Jose Lease On December 30, 2020, the Company entered into a non-cancellable lease agreement for short term office space in San Jose, California (the “San Jose Lease”) for a three month initial term. After March 31, 2021, the San Jose Lease was cancellable upon a 30-day notice to the landlord. The Company took possession of the office space on January 1, 2021 and the San Jose Lease was terminated upon the commencement of the Los Gatos Lease discussed above. The base rent under the San Jose Lease was $504 per month. During the years ended September 30, 2022 and 2021, rent expense associated with the facility leases amounted to $170,501 and $136,826, respectively. Supplemental cash flow information related to the operating lease was as follows: For the Years Ended 2022 2021 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 130,727 $ 70,897 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 73,118 Supplemental balance sheet information related to the operating lease was as follows: As of 2022 2021 Right-of-use assets $ 181,355 $ 288,948 Lease liability $ 202,895 $ 315,673 Weighted average remaining lease term (years) 2.4 3.1 Weighted average discount rate 6.9 % 6.7 % Maturity of the lease liability was as follows: Calendar Year As of 2022 (period from October 1, 2022 to December 31, 2022) $ 32,928 2023 82,333 2024 84,391 2025 21,227 Total lease payments 220,879 Less imputed interest (17,984 ) Total 202,895 Short-term portion (83,339 ) Long-term portion $ 119,556 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Sep. 30, 2022 | |
Supplemental Balance Sheet Information [Abstract] | |
Supplemental Balance Sheet Information | NOTE 5 – Supplemental Balance Sheet Information Inventory Inventory consisted of the following: As of 2022 2021 Work-in-process $ 630,570 $ 98,287 Finished goods 73,968 — Total $ 704,538 $ 98,287 Prepaid and Other Assets Prepaid and other assets consisted of the following: As of 2022 2021 Prepaid expenses $ 296,649 $ 151,109 Deferred offering costs — 92,934 Total $ 296,649 $ 244,043 Intangibles Intangible assets roll forward is as follows: Useful Life Net Intangibles, September 30, 2020 12-13 years $ 156,523 Less: amortization (22,316 ) Net Intangibles, September 30, 2021 134,207 Less: amortization (22,315 ) Net Intangibles, September 30, 2022 $ 111,892 The Company anticipates amortization expense of approximately $22,000 per year for fiscal year 2023 through 2027 based upon the two current license agreements. Property and Equipment Property and equipment, net held for use by category are presented in the following table: As of 2022 2021 Equipment and furniture $ 538,061 $ 311,486 Software 1,895 1,895 Total property and equipment 539,956 313,381 Less accumulated depreciation (186,357 ) (90,052 ) Property and equipment, net $ 353,599 $ 223,329 Depreciation expense was $96,305 and $58,432 for the years ended September 30, 2022 and 2021, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Liabilities [Abstract] | |
Accrued Expenses | NOTE 6 - Accrued Expenses Accrued expenses consisted of the following: As of 2022 2021 Accrued payroll $ 521,368 $ 376,236 Operating lease liability, short term 83,339 112,778 Royalty Fees 111,132 72,083 Other — 83,152 Total $ 715,839 $ 644,249 The “other” category is primarily comprised of board fees. Paycheck Protection Program The CARES Act, signed into law in March 2020, established the Paycheck Protection Program (“PPP”). The PPP authorizes over $600 billion in forgivable loans to small businesses. Loan amounts may be forgiven to the extent proceeds are used to cover documented payroll, mortgage interest, rent, and utility costs over a 24-week measurement period following loan funding. Loans have a maturity of 2 years and an interest rate of 1%. Prepayments may be made without penalty. In April 2020, the Company received loan funding of $83,333 under the PPP and was recorded as a long-term liability. The PPP loan was forgiven on June 9, 2021 by the U.S. Small Business Administration and was reflected as other income in the accompanying statements of operations. Interest was nominal during the year ended September 30, 2021. |
Zimmer Development Agreement
Zimmer Development Agreement | 12 Months Ended |
Sep. 30, 2022 | |
Zimmer Development Agreement [Abstract] | |
Zimmer Development Agreement | NOTE 7 – Zimmer Development Agreement On July 20, 2020, the Company entered into an exclusive development and distribution agreement (the “Development Agreement”) with Zimmer, Inc. (“Zimmer”), pursuant to which the Company granted Zimmer exclusive global rights to distribute the Strip/Grid Products and electrode cable assembly products (the “Electrode Cable Assembly Products”). Additionally, the Company granted Zimmer the exclusive right and license to distribute certain depth electrodes developed by the Company (“SEEG Products”, and together with the Strip/Grid Products and Electrode Cable Assembly Products, the “Products”). The parties have agreed to collaborate with respect to development activities under the Development Agreement through a joint development committee composed of an equal number of representatives of Zimmer and the Company. Under the terms of the Development Agreement, the Company is responsible for all costs and expenses related to developing the Products, and Zimmer is responsible for all costs and expenses related to the commercialization of the Products. In addition to the Development Agreement, Zimmer and the Company have entered into a Manufacturing and Supply Agreement (the “MS Agreement”) and a supplier quality agreement (the “Quality Agreement”) with respect to the manufacturing and supply of the Products. Except as otherwise provided in the Development Agreement, the Company is responsible for performing all development activities, including non-clinical and clinical studies directed at obtaining regulatory approval of each Product. Zimmer has agreed to use commercially reasonable efforts to promote, market and sell each Product following the “Product Availability Date” (as defined in the Development Agreement) for such Product. Pursuant to the Development Agreement, Zimmer made an upfront initial exclusivity fee payment of $2.0 million (the “Initial Exclusivity Fee”) to the Company in fiscal year 2020. On August 2, 2022, the Company entered into a Third Amendment to Exclusive Development and Distribution Agreement (the “Amendment”) with Zimmer. Pursuant to the terms and conditions of the Amendment, Zimmer made a $3.5 million payment to the Company. ● $1.5 million for the SEEG Exclusivity Maintenance Fee; and ● $2.0 million for satisfaction of each of the milestone events related to the design of SEEG products set forth in the Development Agreement even though the satisfaction was after the deadlines originally identified. In addition, in connection with the Amendment, the Company issued Zimmer a warrant to purchase common stock (the “2022 Zimmer Warrant”). The 2022 Zimmer Warrant is exercisable for up to an aggregate of 350,000 shares of the Company’s common stock. The 2022 Zimmer Warrant has an exercise price of $3.00 per share, will be exercisable commencing six months from the issuance date, and will expire on August 2, 2027. The fair value of the 2022 Zimmer Warrant of $0.1 million was based on the Black-Scholes pricing model. Input assumptions used were as follows: a risk-free interest rate of 2.9%; expected volatility of 53.5%; expected life of 5 years; expected dividend yield of 0%; and the underlying fair market of the common stock. The 2022 Zimmer Warrant was classified in stockholders’ equity as the number of shares were fixed and determinable, no cash settlement was required and no other provisions precluded equity treatment. The Development Agreement will expire on the tenth anniversary of the date of the first commercial sale of the last Products to achieve a first commercial sale (the “Term”), unless terminated earlier pursuant to its terms. Either party may terminate the Development Agreement (x) with written notice for the other party’s material breach following a cure period or (y) if the other party becomes subject to certain insolvency proceedings. In addition, Zimmer may terminate the Development Agreement for any reason with 90 days’ written notice, and the Company may terminate the Development Agreement if Zimmer acquires or directly or indirectly owns a controlling interest in certain competitors of the Company. The Zimmer Development Agreement and Amendment were accounted for under the provisions of ASC 606. In accordance with the provisions under ASC 606, the Company identified five performance obligations under the Zimmer Development Agreement and Amendment: (1) the Company’s obligation to grant Zimmer access to its intellectual property; (2) completion SEEG Product development; (3) completion of Strip/Grid Product development; (4) the provision of SEEG exclusivity maintenance; and (5) completion of SEEG design modifications as requested by Zimmer. All performance obligations under the Development Agreement and Amendment, outside of the SEEG exclusivity maintenance obligation, were met as of September 30, 2022. The aggregate transaction price associated with the Development Agreement and Amendment was $5.4 million comprising the Initial Exclusivity Fee of $2.0 million and the $3.5 million payment under the Amendment, less the fair value 2022 Zimmer Warrant of $0.1 million. The transaction price was allocated between performance obligations based on their relative standalone selling prices. The Company used a market based valuation approach and an expected cost plus margin approach with regard to estimating the standalone selling price for the performance obligations. The Company recognized revenue in the amount of $1,948,872 and $64,812 during the years ended September 30, 2022 and 2021, respectively, in connection with the Development Agreement and Amendment. A reconciliation of the closing balance of deferred revenue related to the Zimmer Development Agreement and Amendment is as follows as of September 30, 2022 and 2021: Deferred Revenue Balance as of September 30, 2020 $ 73,434 Revenue recognized (64,812 ) Balance as of September 30, 2021 8,622 Zimmer agreement amendment related to SEEG exclusivity maintenance 1,455,188 Revenue recognized (8,622 ) Balance as of September 30, 2022 $ 1,455,188 The remaining performance obligation in deferred revenue as of September 30, 2022 attributed to sEEG exclusivity maintenance was completed in first quarter of fiscal year 2023. The achievement of the level of sales required to earn royalty payments under the Development Agreement from Zimmer is uncertain and was considered constrained for revenue recognition purposes as of September 30, 2022. Product Revenue In December 2020, the Company commenced commercial sales of its Strip/Grid Products and Electrode Cable Assembly Products in connection with the Development Agreement. Product revenue recognized during the years ended September 30, 2022 and 2021 was $171,169 and $178,146, respectively. Advertising Expense Advertising expense is charged to selling, general and administrative expenses during the period that it is incurred. Total advertising expense amounted to $270,612 and $338,837 for the years ended September 30, 2022 and 2021, respectively. |
Convertible Promissory Notes an
Convertible Promissory Notes and Warrant Agreements | 12 Months Ended |
Sep. 30, 2022 | |
Convertible Promissory Notes and Warrant Agreements [Abstract] | |
Convertible Promissory Notes and Warrant Agreements | NOTE 8 - Convertible Promissory Notes and Warrant Agreements 2019 Paulson Convertible Note Offering On November 1, 2019, the Company entered into a subscription agreement with certain accredited investors, pursuant to which the Company, in a private placement (the “2019 Paulson Private Placement”), agreed to issue and sell to the investors 13% convertible promissory notes (each, a “2019 Paulson Note” and collectively, the “2019 Paulson Notes”) and warrants (each, a “2019 Paulson Warrant” and collectively, the “2019 Paulson Warrants”) to purchase shares of the Company’s common stock. The initial closing of the 2019 Paulson Private Placement was consummated on November 1, 2019, and, on that date and through December 3, 2019, the Company issued the 2019 Paulson Notes in an aggregate principal amount of $3,234,800 to the subscribers for gross proceeds equaling the principal amount. The 2019 Paulson Private Placement terminated on December 3, 2019. On April 24, 2020, the Company and holders of a majority in aggregate principal amount of the 2019 Paulson Notes entered into an amendment to the 2019 Paulson Notes (the “Second 2019 Paulson Notes Amendment”) to, among other things: i. Extended the Maturity Date – ii. Revised Optional Conversion Terms – iii. Revise the Registration Date – The 2019 Paulson Notes had a fixed interest rate of 13% per annum and required the Company to repay the principal and accrued and unpaid interest thereon on November 1, 2020 (the “Maturity Date”). Interest on principal amounted to $5,701 during the year ended September 30, 2021 and was recorded under the net valuation change of instruments measured at fair value in the accompanying statements of operations. The 2019 Paulson Notes were not outstanding during the year ended September 30, 2022. The Company elected to account for the 2019 Paulson Notes on a fair value basis under ASC 825 to comprehensively value and streamline the accounting for the embedded conversion options. Subsequent to issuance, the fair value change of the Paulson Notes amounted to a benefit of $(1,974) during the year ended September 30, 2021 and was recorded under the net valuation change of instruments measured at fair value in the accompanying statements of operations. Each 2019 Paulson Warrant grants the holder the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied by (ii) the principal amount of such subscriber’s 2019 Paulson Notes divided by 5.61, with an exercise price per share equal to $5.61. As of the final closing on December 3, 2019, the Company issued 2019 Paulson Warrants exercisable for 288,305 shares of common stock in connection with all closings of the 2019 Paulson Private Placement. The 2019 Paulson Warrants are immediately exercisable and expire on November 1, 2022. The exercise price is subject to adjustment in the event of any stock dividends or splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. The 2019 Paulson warrants were deemed to be a free-standing instrument and were accounted for as equity. Given that the fair value of the 2019 Paulson Notes exceeded the proceeds received at issuance, there was no value attributed to the 2019 Paulson Warrants in the financial statements. Issuance costs during the year ended September 30, 2021 in connection with the 2019 Paulson Private Placement were $3,053 and related to legal costs. The issuance costs were recorded as a component of interest in the accompanying statements of operations. During the first quarter of fiscal year 2021, the remaining holders of the 2019 Paulson Notes elected to convert the remaining outstanding principal and accrued and unpaid interest in the amount of $615,159 into 292,754 shares of common stock. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 9 - Stock-Based Compensation During the years ended September 30, 2022 and 2021, stock-based expense related to the stock options, restricted stock units and stock awards was included in selling, general and administrative and research and development costs as follows in the accompanying statements of operations: 2022 2021 Selling, general and administrative $ 780,818 $ 1,550,841 Research and development 166,394 242,358 Total stock-based compensation expense $ 947,212 $ 1,793,199 The Company’s 2017 Equity Incentive Plan (“2017 Plan”) provides for the issuance of restricted shares and stock options to employees, directors, and consultants of the Company. Effective October 1, 2021, no shares were available for issuance under the 2016 Equity Incentive Plan. Inducement Plan In addition to the Company’s 2017 Plan, the Company adopted the NeuroOne Medical Technologies Corporation 2021 Inducement Plan (the “Inducement Plan”) on October 4, 2021, pursuant to which the Company reserved 420,350 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan was approved by the Company’s Board of Directors without stockholder approval in accordance with such rule. Evergreen provision Under the 2017 Plan, the shares reserved automatically increase on January 1st of each year, for a period of not more than ten years from the date the 2017 Plan is approved by the stockholders of the Company, commencing on January 1, 2019 and ending on (and including) January 1, 2027, to an amount equal to 13% of the fully-diluted shares outstanding as of December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding sentence. “Fully Diluted Shares” as of a date means an amount equal to the number of shares of common stock (i) outstanding and (ii) issuable upon exercise, conversion or settlement of outstanding awards under the 2017 Plan and any other outstanding options, warrants or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable for shares of common stock, in each case as of the close of business of the Company on December 31 of the preceding calendar year. On January 1, 2022 and 2021, 1,614,538 and 484,622 shares were added to the 2017 Plan, respectively, as a result of the evergreen provision. Stock Options During the years ended September 30, 2022 and 2021, 152,690 and 703,117 stock options were granted to employees, directors and consultants, respectively, with a weighted average grant date fair value of $0.76 and $3.01 per share, respectively. The options granted have vesting periods ranging from being immediate to four years. All options expire ten years from the date of grant. The total expense for the years ended September 30, 2022 and 2021 related to the stock options was $582,329 and $983,301, respectively. The following table summarizes the Company’s stock option plan activity for the years ended September 30, 2022 and 2021 as follows: Number of Weighted Weighted- Aggregate Outstanding at September 30, 2020 492,842 $ 6.13 8.8 $ 96,088 Granted 703,117 $ 5.83 — — Exercised (1,538 ) $ 6.60 — — Forfeited/Cancelled (71,861 ) $ 6.85 — — Outstanding at September 30, 2021 1,122,560 $ 5.89 8.8 $ 127,339 Granted 152,690 $ 1.50 — — Exercised — $ — — — Forfeited/Cancelled (35,335 ) $ 4.14 — — Outstanding at September 30, 2022 1,239,915 $ 5.40 8.0 $ 89,295 Vested and expected to vest at September 30, 2022 1,239,915 $ 5.40 8.0 $ 89,295 Vested and exercisable at September 30, 2022 783,494 $ 5.76 7.7 $ 56,542 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of September 30, 2022 and 2021 of $1.69 and $3.95 per share, respectively. As of September 30, 2022 and 2021, 1,125,710 and 1,055,376 outstanding options, respectively, had no intrinsic value. The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the years ended September 30: 2022 2021 Expected stock price volatility 53.5 % 55.9 % Expected life of options (years) 5.6 6.0 Expected dividend yield 0 % 0 % Risk free interest rate 2.3 % 0.6 % During the years ended September 30, 2022 and 2021, 327,615 and 280,557 stock options vested, respectively. 1,538 stock options were exercised during the year ended September 30, 2021 with an intrinsic value of $2,648. No options were exercised during the year ended September 30, 2022. Restricted Stock Units A summary of restricted stock unit (“RSU”) activity is as follows for the years ended September 30, 2022 and 2021: Number of Shares Non-vested at September 30, 2020 26,698 Granted 13,776 Vested (29,090 ) Non-vested at September 30, 2021 11,384 Granted 443,670 Vested (40,624 ) Non-vested at September 30, 2022 414,430 During the years ended September 30, 2022 and 2021, 443,670 and 13,776 RSUs were granted to members of the Company’s board of directors and employees that vest over a period ranging from an immediate to a two year period, with a grant date fair value of $1.91 and $7.26 per unit, respectively. During the years ended September 30, 2022 and 2021, 40,624 and 29,090 RSUs vested, respectively. The total expense for the years ended September 30, 2022 and 2021 related to the RSU’s was $364,883 and $163,988, respectively. No RSUs were forfeited during the years ended September 30, 2022 and 2021. Other Stock-Based Awards 2022 Activity The Company did not issue any other stock-based awards, outside of stock options and RSUs, during the year ended September 30, 2022. 2021 Activity In April 2021, two consulting agreements were executed whereby a total of 62,659 shares of common stock were issued and vested as of September 30, 2022. In July 2021, two consulting agreements were executed whereby a total of 11,668 shares of common stock were issued and vested as of September 30, 2022. Activity Prior to 2021 In August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company repurchase. The stock award under the agreement vested over a six-month period. As of September 30, 2021 all of the shares vested under this agreement. Compensation expense related to the stock awards granted under the consulting agreements referenced above amounted to zero General As of September 30, 2022, 1,703,872 shares were available for future issuance on a combined basis under the 2017 Plan and the Inducement Plan. Unrecognized stock-based compensation was $1.7 million as of September 30, 2022. The unrecognized share-based expense is expected to be recognized over a weighted average period of 2.0 years. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | NOTE 10 - Stockholders’ Equity 2021 Public Offering On October 13, 2021, the Company, entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC, as underwriter (the “Underwriter”), relating to the issuance and sale of 3,750,000 shares of the Company’s common stock at a price to the public of $3.20 per share. In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days, to purchase up to an additional 562,500 shares of common stock on the same terms. The base offering closed on October 15, 2021, and the sale of 422,057 shares of common stock subject to the Underwriter’s overallotment option closed on November 15, 2021. The gross proceeds to the Company from this offering were approximately $13.4 million prior to deducting underwriting discounts and other offering expenses payable by the Company in the amount of approximately $1.4 million in the aggregate. 2021 Private Placement On January 12, 2021, the Company entered into a Common Stock and Warrant Purchase Agreement with certain accredited investors (the “Purchasers”), pursuant to which the Company agreed to issue and sell an aggregate of 4,166,682 shares common stock, and warrants to purchase an aggregate of 4,166,682 shares of Common Stock (the “2021 Warrants”) at an aggregate purchase price of $3.00 per share of Common Stock and corresponding warrant, resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering expenses. The 2021 Warrants have an initial exercise price of $5.25 per share. The 2021 Warrants are exercisable beginning on the date of issuance and will expire on the fifth anniversary of such date. This private placement closed on January 14, 2021. Warrant Activity and Summary The following table summarizes warrant activity during the years ended September 30, 2022 and 2021: Warrants Exercise Weighted Weighted Outstanding and exercisable at September 30, 2020 3,390,320 $ 5.40 - 9.00 $ 7.05 2.89 Issued 4,166,682 $ 5.25 $ 4.29 — Exercised (53,194 ) $ 5.61-8.25 $ 5.61 — Forfeited — $ — $ — — Outstanding and exercisable at September 30, 2021 7,503,808 $ 5.25-9.00 $ 6.06 3.23 Issued 350,000 $ 3.00 $ 3.00 4.84 Exercised — $ — $ — — Reverse split adjustment correction (100 ) $ — $ — — Forfeited (750,364 ) $ 5.40 $ 5.40 — Outstanding at September 30, 2022 7,103,344 $ 3.00-9.00 $ 5.98 2.68 Outstanding and exercisable at September 30, 2022 6,753,344 $ 5.25-9.00 $ 6.14 2.57 The following table summarizes information about warrants outstanding at September 30, 2022: Exercise Price Number Outstanding Weighted Average Number Exercisable at $ 3.00 350,000 4.84 — $ 5.25 4,166,682 3.29 4,166,682 $ 5.61 916,704 1.68 916,704 $ 6.00 45,171 1.75 45,171 $ 7.50 279,727 1.41 279,727 $ 8.25 62,906 1.75 62,906 $ 9.00 1,282,154 1.18 1,282,154 Total 7,103,344 6,753,344 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 - Income Taxes The effective tax rate for the Company for the years ended September 30, 2022 and 2021 was zero percent. A reconciliation of income tax computed at the statutory federal income tax rate to the provision (benefit) for income taxes included in the accompanying statements of operations for the years ended September 30 is as follows: 2022 2021 Income tax benefit at federal statutory rate (21.0 )% (21.0 )% State income tax, net of federal benefit (7.7 ) (7.7 ) Research credits (3.0 ) (3.7 ) Stock-based compensation and other 0.7 1.0 Valuation allowance 31.0 31.4 Effective tax rate — % — % Significant components of the Company’s deferred tax assets and liabilities are summarized in the tables below as of September 30: 2022 2021 Deferred tax assets: Federal and state operating loss carryforwards $ 10,164,679 $ 7,575,069 Acquired intangibles 26,447 24,541 Accruals and other 70,399 8,370 Research and development credit carryforwards 1,107,559 812,781 Stock-based compensation 688,998 451,757 Total deferred tax assets 12,058,082 8,872,518 Deferred tax liabilities: Fixed assets and other (140,538 ) (64,189 ) Total deferred tax liabilities (140,538 ) (64,189 ) Valuation allowance (11,917,544 ) (8,808,329 ) Net deferred tax assets $ — $ — As of September 30, 2022 and 2021, the Company had gross deferred tax assets of approximately $12,058,000 and $8,873,000, respectively. Realization of the deferred assets is primarily dependent upon future taxable income, if any, the amount and timing of which are uncertain. The Company has had significant pre-tax losses since its inception. The Company has not yet generated revenues from sales and faces significant challenges to becoming profitable. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance of approximately $11,918,000 and $8,808,000 as of September 30, 2022 and 2021, respectively. The U.S. net deferred tax assets will continue to require a valuation allowance until the Company can demonstrate their realizability through sustained profitability or another source of income. As of September 30, 2022 and 2021, the Company’s federal net operating loss carryforwards were approximately $35,408,000 and $26,355,000, respectively. The Company had federal research credit carryforwards as of September 30, 2022 and 2021 of approximately $759,000 and $506,000, respectively. The federal net operating loss incurred prior to January 1, 2018 and tax credit carryforwards will begin to expire in 2036 if not utilized. Federal net operating losses incurred after December 31, 2017 will not expire. As of September 30, 2022 and 2021, the Company had state net operating loss carryforwards of approximately $35,249,000 and $26,355,000, respectively. The Company had state research credit carryforwards of approximately $441,000 and $307,000 as of September 30, 2022 and 2021, respectively. The state net operating loss carryforwards will begin to expire in 2031, if not utilized, and the state research credit carryforwards will begin to expire in 2032 if not utilized. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. Generally, in addition to certain entity reorganizations, the limitation applies when one or more “5-percent shareholders” increase their ownership, in the aggregate, by more than 50 percentage points over a 36-month testing period or beginning the day after the most recent ownership change, if shorter. The annual limitation may result in the expiration of net operating losses and credits before utilization. In accordance with ASC 740, Income Taxes In accordance with this guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses in the accompanying statements of operations. The Company has tax filing obligations in the following jurisdictions: U.S. federal, Minnesota and California. The income tax returns since inception as a corporation in 2016 are subject to examination by the federal and state taxing authorities. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Sep. 30, 2022 | |
Defined Contribution Plan [Abstract] | |
Defined Contribution Plan | NOTE 12 - Defined Contribution Plan The Company has a 401(k) defined contribution plan (the “401K Plan”) for all employees over age 21. Employees can defer up to 100% of their compensation through payroll withholdings into the 401K Plan subject to federal law limits. The Company may match 100% of deferrals up to 3% of one’s contributions. The Company’s matching contributions to employee deferrals are discretionary. The Company may also make discretionary profit sharing contributions under the 401K Plan in the future, but it has not done so through September 30, 2022. Employee contributions and any employer matching contributions made to satisfy certain non-discrimination tests required by the Internal Revenue Code are 100% vested upon contribution. Discretionary employer matches to employee deferrals vest over a six year period beginning on the second anniversary of an employee’s date of hire. Discretionary profit sharing contributions vest over a five year period beginning on the first anniversary of an employee’s date of hire. The amount of contributions made by the Company under the 401K Plan during the years ended September 30, 2022 and 2021 was $30,697 and 14,803, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 - Subsequent Events Los Gatos Lease On November 4, 2022, the term of the Los Gatos Lease was extended by two years to December 31, 2024. The rent under the Los Gatos Lease will range from $4,453 to $4,632 per month. At-The-Market Offering On December 21, 2022, we entered into a Capital on Demand TM |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment, which is the business of development and commercialization of products related to comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and brain stimulation solutions. Accordingly, the Company has a single reporting segment. |
Reverse Stock Split | Reverse Stock Split On March 11, 2021, the Company’s Board of Directors (the “Board”) approved a one-for-three reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 (“common stock”) effective end-of-day March 31, 2021 (the “Reverse Stock Split”). All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise and/or vesting of all outstanding stock options, restricted stock units and warrants to purchase shares of common stock. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split. Any fraction of a share of common stock that was created as a result of the Reverse Stock Split was rounded up to the next whole share. The common stock par value and additional paid-in-capital line items contained in the financial statements were adjusted to account for the Reverse Stock Split for all periods presented. Lastly, the authorized shares and par value per share of the common stock and preferred stock were not adjusted as a result of the Reverse Stock Split. |
Management’s Use of Estimates | Management’s Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, primarily in connection with the convertible promissory notes when outstanding, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original contractual maturity on date of purchase of less than or equal to three months to be classified and presented as cash equivalents on the Balance Sheets. Cash equivalents are stated at cost, which approximates fair value. The Company’s cash and cash equivalents may include demand deposit accounts with large financial institutions, institutional money market funds, U.S. treasury securities, and corporate notes and bonds. The Company monitors the creditworthiness of the financial institutions, institutional money market funds, and corporations in which the Company invests its surplus funds. The Company has experienced no credit losses from its cash and cash equivalent investments. |
Short Term Investment | Short Term Investment The Company invests its excess cash in United States (U.S.) Treasury securities and highly rated corporate securities. The Company intends and has the ability to hold these investments to maturity. Securities with original maturity dates of more than three months are reported as held-to-maturity investments and are recorded at amortized cost, which approximates fair value due to the negligible risk of changes in value due to interest rates. All investments held on September 30, 2022 had contractual maturities of less than one year. The amortized cost and estimated fair values of the Company’s investments as of September 30, 2022 are as follows: Unrealized Unrealized Amortized Holding Holding Losses Fair Short-term: U.S. treasury and corporate notes $ 2,981,010 $ — $ 2,870 $ 2,978,140 Total $ 2,981,010 $ — $ 2,870 $ 2,978,140 |
Revenue Recognition | Revenue Recognition The Company entered into a development and distribution agreement which has current and future revenue recognition implications. See “Note 7 – Zimmer Development Agreement.” In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Product Revenue Revenues from product sales are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. At the inception of each customer contract, performance obligations are identified and the total transaction price is allocated to the performance obligations. The Company commenced commercial sales of cEEG strip/grid and electrode cable assembly products in the first quarter of fiscal year 2021. Cost of Product Revenue Cost of product revenue consists of the manufacturing and materials costs incurred by the Company’s third-party contract manufacturer in connection with the Company’s strip and grid cortical electrodes (the “Strip/Grid Products”) and outside supplier materials costs in connection with the . In addition, cost of product revenue includes royalty fees incurred in connection with the Company’s license agreements. Collaborations Revenue A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Account Standards Codification (“ASC”) Topic 606. (“ASC 606”). Performance obligations may include license rights, development services, and services associated with regulatory submission and approval processes. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. As part of the accounting for collaboration arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation. Licenses of intellectual property Milestone payments Royalties |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (“FASB”) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. As of September 30, 2022 and 2021, the fair values of cash, cash equivalents, short-term investments, accounts receivable, inventory, prepaid, other assets, accounts payable and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the convertible notes while outstanding were based on both the fair value of our common stock, discount associated with the embedded redemption features, and cash flow models discounted at current implied market rates evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments and are based on Level 3 inputs. There were no transfers between fair value hierarchy levels during the years ended September 30, 2022 and 2021. There were no financial instruments measured on a recurring basis outstanding as of September 30, 2022. The following table provides a roll-forward of the convertible notes measured at fair value on a recurring basis using unobservable level 3 inputs for the year ended September 30, 2021 as follows: 2021 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Conversion of convertible promissory notes to common stock (1,005,232 ) Change in fair value including accrued interest (1,974 ) Balance as of end of period – September 30, 2021 $ — |
Intellectual Property | Intellectual Property The Company has entered into two licensing agreements with major research institutions, which allow for access to certain patented technology and know-how. Payments under those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired technology. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost and reduced by accumulated depreciation. Depreciation expense is recognized over the estimated useful lives of the assets using the straight-line method. The estimated useful life for equipment and furniture ranges from three to seven years and three years for software. Tangible assets acquired for research and development activities and that have alternative use are capitalized over the useful life of the acquired asset. Estimated useful lives are periodically reviewed, and, when appropriate, changes are made prospectively. Software purchased for internal use consists primarily of amounts paid for perpetual licenses to third-party software providers and installation costs. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Maintenance and repairs are charged directly to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets, which consist of licensed intellectual property, property and equipment and right of use assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts The Company records a provision for doubtful accounts, when appropriate, based on historical experience and a detailed assessment of the collectability of its accounts receivable. In estimating the allowance for doubtful accounts, the Company considers, among other factors, the aging of the accounts receivable, its historical write-offs, the credit worthiness of each customer, and general economic conditions. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be recovered. Actual write-offs may be in excess of the Company’s estimated allowance. |
Inventories | Inventories Inventories are stated at the lower of cost (using the first-in, first-out “FIFO” method) or net realizable value. The Company calculates inventory valuation adjustments for excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives, and estimated future demand of the products and spare parts. The Company’s inventory is currently comprised of cEEG strip/grid and electrode cable assembly work-in-process and finished good product. The Strip/Grid Products are produced by a third-party contract manufacturer and the Electrode Cable Assembly Products are obtained from outside suppliers. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred. Research and development expenses may include costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees, and other external costs. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development |
Selling, General and Administrative | Selling, General and Administrative Selling, general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with research and development activities. Other significant costs include legal and litigation costs relating to corporate matters, intellectual property costs, professional fees for consultants assisting with regulatory, clinical, product development, financial matters, and beginning in the first quarter of fiscal year 2021, sales and marketing in connection with the commercial sale of cEEG strip/grid and electrode cable assembly products. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation — Stock Compensation |
Income Taxes | Income Taxes For the Company, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. |
Net Loss Per Share | Net Loss Per Share For the Company, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s convertible notes, warrants, stock options and restricted stock units, while outstanding, are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the warrants, stock options and restricted stock units. Diluted earnings with respect to the convertible notes utilize the if-converted method. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for both the years ended September 30, 2022 and 2021. The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the years ended September 30: 2022 2021 Warrants 7,103,344 7,503,808 Stock options 1,239,915 1,122,560 Restricted stock units 414,430 11,384 Unissued vested restricted stock units 7,316 1,148 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses” In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) In August 2020, FASB issued ASU 2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance, |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of invests its excess cash in unit | Unrealized Unrealized Amortized Holding Holding Losses Fair Short-term: U.S. treasury and corporate notes $ 2,981,010 $ — $ 2,870 $ 2,978,140 Total $ 2,981,010 $ — $ 2,870 $ 2,978,140 |
Schedule of convertible notes at fair value on a recurring basis using unobservable level 3 inputs | 2021 Convertible notes Balance as of beginning of period – September 30, 2020 $ 1,007,206 Conversion of convertible promissory notes to common stock (1,005,232 ) Change in fair value including accrued interest (1,974 ) Balance as of end of period – September 30, 2021 $ — |
Schedule of computation of diluted net loss per share | 2022 2021 Warrants 7,103,344 7,503,808 Stock options 1,239,915 1,122,560 Restricted stock units 414,430 11,384 Unissued vested restricted stock units 7,316 1,148 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of supplemental cash flow information related to the operating lease | For the Years Ended 2022 2021 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 130,727 $ 70,897 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 73,118 |
Schedule of supplemental balance sheet information related to the operating lease | As of 2022 2021 Right-of-use assets $ 181,355 $ 288,948 Lease liability $ 202,895 $ 315,673 Weighted average remaining lease term (years) 2.4 3.1 Weighted average discount rate 6.9 % 6.7 % |
Schedule of maturity of the lease liability | Calendar Year As of 2022 (period from October 1, 2022 to December 31, 2022) $ 32,928 2023 82,333 2024 84,391 2025 21,227 Total lease payments 220,879 Less imputed interest (17,984 ) Total 202,895 Short-term portion (83,339 ) Long-term portion $ 119,556 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Supplemental Balance Sheet Information Table [Abstract] | |
Schedule of inventory consisted | As of 2022 2021 Work-in-process $ 630,570 $ 98,287 Finished goods 73,968 — Total $ 704,538 $ 98,287 |
Schedule of prepaid and other assets | As of 2022 2021 Prepaid expenses $ 296,649 $ 151,109 Deferred offering costs — 92,934 Total $ 296,649 $ 244,043 |
Schedule of intangible assets | Useful Life Net Intangibles, September 30, 2020 12-13 years $ 156,523 Less: amortization (22,316 ) Net Intangibles, September 30, 2021 134,207 Less: amortization (22,315 ) Net Intangibles, September 30, 2022 $ 111,892 |
Schedule of property and equipment | As of 2022 2021 Equipment and furniture $ 538,061 $ 311,486 Software 1,895 1,895 Total property and equipment 539,956 313,381 Less accumulated depreciation (186,357 ) (90,052 ) Property and equipment, net $ 353,599 $ 223,329 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Liabilities [Abstract] | |
Schedule of accrued expenses | As of 2022 2021 Accrued payroll $ 521,368 $ 376,236 Operating lease liability, short term 83,339 112,778 Royalty Fees 111,132 72,083 Other — 83,152 Total $ 715,839 $ 644,249 |
Zimmer Development Agreement (T
Zimmer Development Agreement (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Zimmer Development Agreement [Abstract] | |
Schedule of deferred revenue | Deferred Revenue Balance as of September 30, 2020 $ 73,434 Revenue recognized (64,812 ) Balance as of September 30, 2021 8,622 Zimmer agreement amendment related to SEEG exclusivity maintenance 1,455,188 Revenue recognized (8,622 ) Balance as of September 30, 2022 $ 1,455,188 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | 2022 2021 Selling, general and administrative $ 780,818 $ 1,550,841 Research and development 166,394 242,358 Total stock-based compensation expense $ 947,212 $ 1,793,199 |
Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model | Number of Weighted Weighted- Aggregate Outstanding at September 30, 2020 492,842 $ 6.13 8.8 $ 96,088 Granted 703,117 $ 5.83 — — Exercised (1,538 ) $ 6.60 — — Forfeited/Cancelled (71,861 ) $ 6.85 — — Outstanding at September 30, 2021 1,122,560 $ 5.89 8.8 $ 127,339 Granted 152,690 $ 1.50 — — Exercised — $ — — — Forfeited/Cancelled (35,335 ) $ 4.14 — — Outstanding at September 30, 2022 1,239,915 $ 5.40 8.0 $ 89,295 Vested and expected to vest at September 30, 2022 1,239,915 $ 5.40 8.0 $ 89,295 Vested and exercisable at September 30, 2022 783,494 $ 5.76 7.7 $ 56,542 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of September 30, 2022 and 2021 of $1.69 and $3.95 per share, respectively. As of September 30, 2022 and 2021, 1,125,710 and 1,055,376 outstanding options, respectively, had no intrinsic value. |
Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model | 2022 2021 Expected stock price volatility 53.5 % 55.9 % Expected life of options (years) 5.6 6.0 Expected dividend yield 0 % 0 % Risk free interest rate 2.3 % 0.6 % |
Schedule of restricted stock unit activity | Number of Shares Non-vested at September 30, 2020 26,698 Granted 13,776 Vested (29,090 ) Non-vested at September 30, 2021 11,384 Granted 443,670 Vested (40,624 ) Non-vested at September 30, 2022 414,430 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Warrants Exercise Weighted Weighted Outstanding and exercisable at September 30, 2020 3,390,320 $ 5.40 - 9.00 $ 7.05 2.89 Issued 4,166,682 $ 5.25 $ 4.29 — Exercised (53,194 ) $ 5.61-8.25 $ 5.61 — Forfeited — $ — $ — — Outstanding and exercisable at September 30, 2021 7,503,808 $ 5.25-9.00 $ 6.06 3.23 Issued 350,000 $ 3.00 $ 3.00 4.84 Exercised — $ — $ — — Reverse split adjustment correction (100 ) $ — $ — — Forfeited (750,364 ) $ 5.40 $ 5.40 — Outstanding at September 30, 2022 7,103,344 $ 3.00-9.00 $ 5.98 2.68 Outstanding and exercisable at September 30, 2022 6,753,344 $ 5.25-9.00 $ 6.14 2.57 |
Schedule of summarizes information about warrants outstanding | Exercise Price Number Outstanding Weighted Average Number Exercisable at $ 3.00 350,000 4.84 — $ 5.25 4,166,682 3.29 4,166,682 $ 5.61 916,704 1.68 916,704 $ 6.00 45,171 1.75 45,171 $ 7.50 279,727 1.41 279,727 $ 8.25 62,906 1.75 62,906 $ 9.00 1,282,154 1.18 1,282,154 Total 7,103,344 6,753,344 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income tax computed at the statutory federal income tax rate | 2022 2021 Income tax benefit at federal statutory rate (21.0 )% (21.0 )% State income tax, net of federal benefit (7.7 ) (7.7 ) Research credits (3.0 ) (3.7 ) Stock-based compensation and other 0.7 1.0 Valuation allowance 31.0 31.4 Effective tax rate — % — % |
Schedule of deferred tax assets and liabilities | 2022 2021 Deferred tax assets: Federal and state operating loss carryforwards $ 10,164,679 $ 7,575,069 Acquired intangibles 26,447 24,541 Accruals and other 70,399 8,370 Research and development credit carryforwards 1,107,559 812,781 Stock-based compensation 688,998 451,757 Total deferred tax assets 12,058,082 8,872,518 Deferred tax liabilities: Fixed assets and other (140,538 ) (64,189 ) Total deferred tax liabilities (140,538 ) (64,189 ) Valuation allowance (11,917,544 ) (8,808,329 ) Net deferred tax assets $ — $ — |
Going Concern (Details)
Going Concern (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated deficit | $ 50.8 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Mar. 11, 2021 $ / shares | Sep. 30, 2022 $ / shares | Sep. 30, 2021 $ / shares | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Number of operating segments | 1 | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Contractual maturity term | 1 year | ||
Number of licensing agreements | 2 | ||
Reverse stock split | one-for-three | ||
Equipment and Furniture [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 3 years | ||
Equipment and Furniture [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 7 years | ||
Software [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 3 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of invests its excess cash in unit | Sep. 30, 2022 USD ($) |
Short-term: | |
Amortized Cost | $ 2,981,010 |
Unrealized Holding Gains | |
Unrealized Holding Losses | 2,870 |
Fair Value | 2,978,140 |
U.S. treasury and corporate notes [Member] | |
Short-term: | |
Amortized Cost | 2,981,010 |
Unrealized Holding Gains | |
Unrealized Holding Losses | 2,870 |
Fair Value | $ 2,978,140 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of convertible notes at fair value on a recurring basis using unobservable level 3 inputs | 12 Months Ended |
Sep. 30, 2021 USD ($) | |
Convertible notes | |
Balance as of beginning of period | $ 1,007,206 |
Conversion of convertible promissory notes to common stock | (1,005,232) |
Change in fair value including accrued interest | (1,974) |
Balance as of end of period |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of computation of diluted net loss per share - shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Computation Of Diluted Net Loss Per Share Abstract | ||
Warrants | 7,103,344 | 7,503,808 |
Stock options | 1,239,915 | 1,122,560 |
Restricted stock units | 414,430 | 11,384 |
Unissued vested restricted stock units | 7,316 | 1,148 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 12 Months Ended | |||
Jul. 02, 2021 USD ($) m² | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2020 USD ($) | |
Commitments and Contingencies (Details) [Line Items] | ||||
Royalty payments - 2020 | $ 50,000 | |||
Royalty payments - 2021 | $ 100,000 | |||
Royalty payments - 2022 | $ 150,000 | |||
Legal costs | $ 663,629 | 80,356 | ||
Facility lease agreement, description | The initial base rent for the Premises is $6,410 per month for the first 17 months, increasing to $7,076 per month by the end of the Term. In addition, as long as the Company is not in default under the Lease, the Company shall be entitled to an abatement of its base rent for the first 5 months. In addition, the Company will pay its pro rata share of the Landlord’s annual operating expenses associated with the premises, calculated as set forth in the Lease of which the Company is entitled to an abatement of these operating expense for the first 3 months. | |||
Lease space (in Square Meters) | m² | 1,162 | |||
Lease rental expense | $ 4,241 | |||
Additional extended term | 2 years | |||
Monthly lease rent | $ 504 | |||
Rent expense | 170,501 | 136,826 | ||
WARF License Agreement [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Royalty payments | 137,500 | 125,000 | ||
Mayo Agreement [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Royalty payments | $ 4,861 | $ 3,894 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of supplemental cash flow information related to the operating lease - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liability: | ||
Operating cash flows from operating leases | $ 130,727 | $ 70,897 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 73,118 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of supplemental balance sheet information related to the operating lease - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule Of Supplemental Balance Sheet Information Related To The Operating Lease Abstract | ||
Right-of-use assets | $ 181,355 | $ 288,948 |
Lease liability | $ 202,895 | $ 315,673 |
Weighted average remaining lease term (years) | 2 years 4 months 24 days | 3 years 1 month 6 days |
Weighted average discount rate | 6.90% | 6.70% |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of maturity of the lease liability | Sep. 30, 2022 USD ($) |
Schedule Of Maturity Of The Lease Liability Abstract | |
2022 (period from October 1, 2022 to December 31, 2022) | $ 32,928 |
2023 | 82,333 |
2024 | 84,391 |
2025 | 21,227 |
Total lease payments | 220,879 |
Less imputed interest | (17,984) |
Total | 202,895 |
Short-term portion | (83,339) |
Long-term portion | $ 119,556 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental Balance Sheet Information [Abstract] | ||
Amortization expense | $ 22,000 | |
Depreciation expense | $ 96,305 | $ 58,432 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information (Details) - Schedule of inventory consisted - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule Of Inventory Consisted [Abstract] | ||
Work-in-process | $ 630,570 | $ 98,287 |
Finished goods | 73,968 | |
Total | $ 704,538 | $ 98,287 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information (Details) - Schedule of prepaid and other assets - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule of prepaid and other assets [Abstract] | ||
Prepaid expenses | $ 296,649 | $ 151,109 |
Deferred offering costs | 92,934 | |
Total | $ 296,649 | $ 244,043 |
Supplemental Balance Sheet In_6
Supplemental Balance Sheet Information (Details) - Schedule of intangible assets - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangibles, beginning | $ 134,207 | $ 156,523 |
Less: amortization | (22,315) | (22,316) |
Net Intangibles, ending | $ 111,892 | $ 134,207 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangibles, beginning | 12 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangibles, beginning | 13 years |
Supplemental Balance Sheet In_7
Supplemental Balance Sheet Information (Details) - Schedule of property and equipment - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule of property and equipment [Abstract] | ||
Equipment and furniture | $ 538,061 | $ 311,486 |
Software | 1,895 | 1,895 |
Total property and equipment | 539,956 | 313,381 |
Less accumulated depreciation | (186,357) | (90,052) |
Property and equipment, net | $ 353,599 | $ 223,329 |
Accrued Expenses (Details)
Accrued Expenses (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Liabilities [Abstract] | |
Paycheck protection program, description | The PPP authorizes over $600 billion in forgivable loans to small businesses. Loan amounts may be forgiven to the extent proceeds are used to cover documented payroll, mortgage interest, rent, and utility costs over a 24-week measurement period following loan funding. Loans have a maturity of 2 years and an interest rate of 1%. Prepayments may be made without penalty. In April 2020, the Company received loan funding of $83,333 under the PPP and was recorded as a long-term liability. The PPP loan was forgiven on June 9, 2021 by the U.S. Small Business Administration and was reflected as other income in the accompanying statements of operations. Interest was nominal during the year ended September 30, 2021. |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of accrued expenses - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule Of Accrued Expenses Abstract | ||
Accrued payroll | $ 521,368 | $ 376,236 |
Operating lease liability, short term | 83,339 | 112,778 |
Royalty Fees | 111,132 | 72,083 |
Other | 83,152 | |
Total | $ 715,839 | $ 644,249 |
Zimmer Development Agreement (D
Zimmer Development Agreement (Details) - USD ($) | 12 Months Ended | ||
Aug. 02, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Zimmer Development Agreement (Details) [Line Items] | |||
Initial fee payment | $ 2,000,000 | ||
Aggregate number of warrants exercisable (in Shares) | 350,000 | ||
Warrants exercise price (in Dollars per share) | $ 3 | ||
Fair value of warrants | $ 100,000 | ||
Risk-free interest rate | 2.90% | ||
Expected volatility percentage | 53.50% | 55.90% | |
Expected life | 5 years | ||
Expected dividend yield percentage | 0% | 0% | |
Development agreement | $ 5,400,000 | ||
Initial exclusivity fee | 2,000,000 | ||
Under payment | 3,500,000 | ||
Product revenue | 171,169 | $ 178,146 | |
Total advertising expense | 270,612 | 338,837 | |
Development Agreement [Member] | |||
Zimmer Development Agreement (Details) [Line Items] | |||
Collaborations revenue recognized | 1,948,872 | $ 64,812 | |
Scenario Two [Member] | Development Agreement [Member] | Modified Connector by April 30, 2021 [Member] | |||
Zimmer Development Agreement (Details) [Line Items] | |||
Milestone payments paid | 3,500,000 | ||
Scenario Two [Member] | Development Agreement [Member] | Modified Connector by September 30, 2021 [Member] | |||
Zimmer Development Agreement (Details) [Line Items] | |||
Milestone payments paid | 2,000,000 | ||
Scenario One [Member] | Development Agreement [Member] | April 30, 2021 [Member] | |||
Zimmer Development Agreement (Details) [Line Items] | |||
Future potential milestone payments to Neuroone | $ 1,500,000 | ||
Scenario One [Member] | Development Agreement [Member] | On or before June 30, 2021 [Member] | |||
Zimmer Development Agreement (Details) [Line Items] | |||
Fair value of warrants | $ 100,000 |
Zimmer Development Agreement _2
Zimmer Development Agreement (Details) - Schedule of deferred revenue - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Deferred Revenue Abstract | ||
Balance as beginning | $ 8,622 | $ 73,434 |
Revenue recognized | (8,622) | (64,812) |
Balance as ending | 1,455,188 | $ 8,622 |
Zimmer agreement amendment related to SEEG exclusivity maintenance | $ 1,455,188 |
Convertible Promissory Notes _2
Convertible Promissory Notes and Warrant Agreements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 03, 2019 | Sep. 30, 2019 | Apr. 24, 2020 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Nov. 01, 2019 | |
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | |||||||
Changes of fair value benefit | $ (1,974) | ||||||
Accrued and unpaid interest | $ 615,159 | ||||||
Shares of common stock | 292,754 | ||||||
2019 Paulson Private Placement [Member] | |||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | |||||||
Convertible notes bear interest at fixed rate | 13% | 13% | |||||
Issuance costs incurred | 3,053 | ||||||
Paulson Convertible Note Offering [Member] | |||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | |||||||
Principal amount | $ 3,234,800 | ||||||
Extended maturity date, description | Extended the Maturity Date – The Second 2019 Paulson Notes Amendment extended the maturity date of the 2019 Paulson Notes from May 1, 2020 to November 1, 2020 (in either case, unless a change of control transaction happens prior to such date); | ||||||
Revised optional conversion terms, description | Revised Optional Conversion Terms – The Second 2019 Paulson Notes Amendment provided that the amount of shares to be received upon the a subscriber’s optional conversion of the 2019 Paulson Notes prior to a 2019 Qualified Financing (as defined in the 2019 Paulson Notes) would have equalled: (1) the Outstanding Balance as defined below of such subscriber’s 2019 Paulson Note elected by the subscriber to be converted divided by (2) an amount equal to 0.6 multiplied by the volume weighted average price of the common stock for the ten (10) trading days immediately preceding the date of conversion; and | ||||||
Non-cash interest on principal amount | $ 5,701 | ||||||
Warrants, description | Each 2019 Paulson Warrant grants the holder the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied by (ii) the principal amount of such subscriber’s 2019 Paulson Notes divided by 5.61, with an exercise price per share equal to $5.61. | ||||||
Warrants to purchase of common stock shares | 288,305 | ||||||
Warrants exercisable date of issuance and expire | Nov. 01, 2022 | ||||||
Paulson Convertible Note Offering [Member] | 2019 Qualified Financing [Member] | |||||||
Convertible Promissory Notes and Warrant Agreements (Details) [Line Items] | |||||||
Equity qualified financing, description | Revise the Registration Date – The Second 2019 Paulson Notes Amendment provided that promptly following the earlier of (1) May 1, 2020, if the applicable subscriber converted all or a majority of the Outstanding Balance of such subscriber’s 2019 Paulson Note prior to such date; (2) the final closing a 2019 Qualified Financing; and (3) the maturity date. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 04, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Aug. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation (Details) [Line Items] | ||||||
Option plan increases for future award issuance | 13% | |||||
Stock options, granted | 152,690 | 703,117 | ||||
Vested over a period term | 10 years | |||||
Total expense (in Dollars) | $ 582,329 | $ 983,301 | ||||
Exercise price (in Dollars per share) | $ 1.69 | $ 3.95 | ||||
Outstanding stock options | 1,125,710 | 1,055,376 | ||||
Stock options vested | 327,615 | 280,557 | ||||
Stock options exercised | 1,538 | |||||
Intrinsic value (in Dollars) | $ 2,648 | |||||
Compensation expense (in Dollars) | $ 645,910 | |||||
Unrecognized stock-based compensation (in Dollars) | $ 1,700,000 | |||||
Weighted average period | 2 years | |||||
2016 and 2017 Equity Incentive Plan [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Future issuance shares | 1,703,872 | |||||
Minimum [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Stock awards vesting points (in Dollars per share) | $ 5.22 | |||||
Maximum [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Stock awards vesting points (in Dollars per share) | $ 6.62 | |||||
2021 Activity [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Consulting agreements description | the Company reserved 420,350 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan was approved by the Company’s Board of Directors without stockholder approval in accordance with such rule. | In July 2021, two consulting agreements were executed whereby a total of 11,668 shares of common stock were issued and vested as of September 30, 2022. | ||||
Stock Options [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Stock options, granted | 152,690 | 703,117 | ||||
Weighted average grant date fair value, per share (in Dollars per share) | $ 0.76 | $ 3.01 | ||||
Vested over a period term | 4 years | |||||
Stock Options [Member] | 2017 Plan [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Shares reserved, description | the number of shares of common stock (i) outstanding and (ii) issuable upon exercise, conversion or settlement of outstanding awards under the 2017 Plan and any other outstanding options, warrants or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable for shares of common stock, in each case as of the close of business of the Company on December 31 of the preceding calendar year. On January 1, 2022 and 2021, 1,614,538 and 484,622 shares were added to the 2017 Plan, respectively, as a result of the evergreen provision. | |||||
2020 Activity [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Consulting agreements description | In August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company repurchase. The stock award under the agreement vested over a six-month period. | |||||
Two consulting agreements [Member] | 2021 Activity [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Shares of common stock | 62,659 | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Total expense (in Dollars) | $ 364,883 | $ 163,988 | ||||
Restricted stock units vested | 40,624 | 29,090 | ||||
Board of Directors [Member] | ||||||
Stock-Based Compensation (Details) [Line Items] | ||||||
Stock options, granted | 443,670 | 13,776 | ||||
Vested over a period term | 2 years | |||||
Grant date fair value (in Dollars per share) | $ 1.91 | $ 7.26 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total stock-based compensation expense | $ 947,212 | $ 1,793,199 |
Selling, general and administrative [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total stock-based compensation expense | 780,818 | 1,550,841 |
Research and development [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total stock-based compensation expense | $ 166,394 | $ 242,358 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of stock option plan activity - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Schedule Of Stock Option Plan Activity Abstract | |||
Number of Options, Outstanding at beginning | 1,122,560 | 492,842 | |
Weighted Average Exercise Price, Outstanding at beginning | $ 5.89 | $ 6.13 | |
Weighted- Average Remaining Contractual Term (years), Outstanding at beginning | 8 years | 8 years 9 months 18 days | |
Aggregate Intrinsic Value, Outstanding at beginning | [1] | $ 96,088 | |
Number of Options, Granted | 152,690 | 703,117 | |
Weighted Average Exercise Price, Granted | $ 1.5 | $ 5.83 | |
Weighted- Average Remaining Contractual Term (years), Granted | |||
Aggregate Intrinsic Value, Granted | [1] | ||
Number of Options, Exercised | (1,538) | ||
Weighted Average Exercise Price, Exercised | $ 6.6 | ||
Weighted- Average Remaining Contractual Term (years), Exercised | |||
Aggregate Intrinsic Value, Exercised | [1] | ||
Number of Options, Forfeited/Cancelled | (35,335) | (71,861) | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ 4.14 | $ 6.85 | |
Weighted- Average Remaining Contractual Term (years), Forfeited/Cancelled | |||
Aggregate Intrinsic Value, Forfeited/Cancelled | [1] | ||
Number of Options, Outstanding at ending | 1,239,915 | 1,122,560 | |
Weighted Average Exercise Price, Outstanding at ending | $ 5.4 | $ 5.89 | |
Weighted- Average Remaining Contractual Term (years), Outstanding at ending | 8 years | 8 years 9 months 18 days | |
Aggregate Intrinsic Value, Outstanding at ending | [1] | $ 89,295 | $ 127,339 |
Number of Options, Vested and expected | 1,239,915 | ||
Weighted Average Exercise Price, Vested and expected | $ 5.4 | ||
Weighted- Average Remaining Contractual Term (years),Vested and expected | 8 years | ||
Aggregate Intrinsic Value, Vested and expected | [1] | $ 89,295 | |
Number of Options, Vested and exercisable | 783,494 | ||
Weighted Average Exercise Price, Vested and exercisable | $ 5.76 | ||
Weighted- Average Remaining Contractual Term (years), Vested and exercisable | 7 years 8 months 12 days | ||
Aggregate Intrinsic Value, Vested and exercisable | [1] | $ 56,542 | |
[1]The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of September 30, 2022 and 2021 of $1.69 and $3.95 per share, respectively. As of September 30, 2022 and 2021, 1,125,710 and 1,055,376 outstanding options, respectively, had no intrinsic value. |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - Schedule of weighted-average assumptions used in the Black-Scholes option-pricing model | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Weighted Average Assumptions Used In The Black Scholes Option Pricing Model Abstract | ||
Expected stock price volatility | 53.50% | 55.90% |
Expected life of options (years) | 5 years 7 months 6 days | 6 years |
Expected dividend yield | 0% | 0% |
Risk free interest rate | 2.30% | 0.60% |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details) - Schedule of restricted stock unit activity - shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Restricted Stock Unit Activity Abstract | ||
Non-vested, Number of Shares beginning | 11,384 | 26,698 |
Granted, Number of Shares | 443,670 | 13,776 |
Vested, Number of Shares | (40,624) | (29,090) |
Non-vested, Number of Shares ending | 414,430 | 11,384 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Oct. 13, 2021 | Jan. 12, 2021 | Sep. 30, 2022 | Oct. 15, 2021 | |
Stockholders' Equity (Details) [Line Items] | ||||
Additional shares purchased | 562,500 | |||
Total gross proceeds (in Dollars) | $ 13.4 | |||
Other offering expenses payable (in Dollars) | $ 1.4 | |||
Public Offering [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Additional shares purchased | 3,750,000 | 422,057 | ||
Offering price, per share (in Dollars per share) | $ 3.2 | |||
2021 Private Placement [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Total gross proceeds (in Dollars) | $ 12.5 | |||
Aggregate share issued | 4,166,682 | |||
Purchase of warrants | 4,166,682 | |||
Purchase price (in Dollars per share) | $ 3 | |||
Initial exercise price (in Dollars per share) | $ 5.25 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of warrant activity - $ / shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stockholders' Equity (Details) - Schedule of warrant activity [Line Items] | ||
Warrants, Outstanding and exercisable, beginning (in Shares) | 7,503,808 | 3,390,320 |
Weighted Average Exercise Price, Outstanding and exercisable, beginning | $ 6.06 | $ 7.05 |
Weighted Average Term (years), Outstanding and exercisable, beginning | 2 years 10 months 20 days | |
Warrants, Issued (in Shares) | 350,000 | 4,166,682 |
Exercise Price Per Warrant, Issued | $ 3 | $ 5.25 |
Weighted Average Exercise Price, Issued | $ 3 | $ 4.29 |
Weighted Average Term (years), Issued | 4 years 10 months 2 days | |
Warrants, Exercised (in Shares) | (53,194) | |
Exercise Price Per Warrant, Exercised | ||
Weighted Average Exercise Price, Exercised | $ 5.61 | |
Weighted Average Term (years), Exercised | ||
Warrants, Reverse split adjustment correction, (in Shares) | (100) | |
Exercise Price Per Warrant, Reverse split adjustment correction | ||
Weighted Average Exercise Price, Reverse split adjustment correction | ||
Weighted Average Term (years), Reverse split adjustment correction | ||
Warrants, Forfeited (in Shares) | (750,364) | |
Exercise Price Per Warrant, Forfeited | $ 5.4 | |
Weighted Average Exercise Price, Forfeited | $ 5.4 | |
Weighted Average Term (years), Forfeited | ||
Warrants, Outstanding, Ending (in Shares) | 7,103,344 | |
Weighted Average Exercise Price, Outstanding, Ending | $ 5.98 | |
Weighted Average Term (years), Outstanding, Ending | 2 years 8 months 4 days | |
Warrants, Outstanding and exercisable, Ending (in Shares) | 6,753,344 | 7,503,808 |
Weighted Average Exercise Price, Outstanding and exercisable, Ending | $ 6.14 | $ 6.06 |
Weighted Average Term (years), Outstanding and exercisable, Ending | 2 years 6 months 25 days | 3 years 2 months 23 days |
Minimum [Member] | ||
Stockholders' Equity (Details) - Schedule of warrant activity [Line Items] | ||
Exercise Price Per Warrant, Outstanding and exercisable, beginning | $ 5.25 | $ 5.4 |
Exercise Price Per Warrant, Exercised | 5.61 | |
Exercise Price Per Warrant, Outstanding, Ending | 3 | |
Exercise Price Per Warrant, Outstanding and exercisable, Ending | 5.25 | 5.25 |
Maximum [Member] | ||
Stockholders' Equity (Details) - Schedule of warrant activity [Line Items] | ||
Exercise Price Per Warrant, Outstanding and exercisable, beginning | 9 | 9 |
Exercise Price Per Warrant, Exercised | 8.25 | |
Exercise Price Per Warrant, Outstanding, Ending | 9 | |
Exercise Price Per Warrant, Outstanding and exercisable, Ending | $ 9 | $ 9 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of summarizes information about warrants outstanding - Warrant [Member] | 12 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Number Outstanding, Total | 7,103,344 |
Number Exercisable , Total | 6,753,344 |
3.00 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 3 |
Number Outstanding, Total | 350,000 |
Weighted Average Remaining Contractual life (Years), Total | 4 years 10 months 2 days |
Number Exercisable , Total | |
5.25 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 5.25 |
Number Outstanding, Total | 4,166,682 |
Weighted Average Remaining Contractual life (Years), Total | 3 years 3 months 14 days |
Number Exercisable , Total | 4,166,682 |
5.61 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 5.61 |
Number Outstanding, Total | 916,704 |
Weighted Average Remaining Contractual life (Years), Total | 1 year 8 months 4 days |
Number Exercisable , Total | 916,704 |
6.00 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 6 |
Number Outstanding, Total | 45,171 |
Weighted Average Remaining Contractual life (Years), Total | 1 year 9 months |
Number Exercisable , Total | 45,171 |
7.50 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 7.5 |
Number Outstanding, Total | 279,727 |
Weighted Average Remaining Contractual life (Years), Total | 1 year 4 months 28 days |
Number Exercisable , Total | 279,727 |
8.25 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 8.25 |
Number Outstanding, Total | 62,906 |
Weighted Average Remaining Contractual life (Years), Total | 1 year 9 months |
Number Exercisable , Total | 62,906 |
9.00 [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price, Total (in Dollars per share) | $ / shares | $ 9 |
Number Outstanding, Total | 1,282,154 |
Weighted Average Remaining Contractual life (Years), Total | 1 year 2 months 4 days |
Number Exercisable , Total | 1,282,154 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0% | 0% |
Gross deferred tax assets | $ 12,058,000 | $ 8,873,000 |
Valuation allowance | 11,918,000 | 8,808,000 |
Federal net operating loss carryforwards | 35,408,000 | 26,355,000 |
Federal research credit carryforwards | 759,000 | 506,000 |
State net operating loss carryforwards | 35,249,000 | 26,355,000 |
State research credit carryforwards | $ 441,000 | $ 307,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of reconciliation of income tax computed at the statutory federal income tax rate | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule of reconciliation of income tax computed at the statutory federal income tax rate [Abstract] | ||
Income tax benefit at federal statutory rate | (21.00%) | (21.00%) |
State income tax, net of federal benefit | (7.70%) | (7.70%) |
Research credits | (3.00%) | (3.70%) |
Stock-based compensation and other | 0.70% | 1% |
Valuation allowance | 31% | 31.40% |
Effective tax rate |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of deferred tax assets and liabilities - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Deferred tax assets: | ||
Federal and state operating loss carryforwards | $ 10,164,679 | $ 7,575,069 |
Acquired intangibles | 26,447 | 24,541 |
Accruals and other | 70,399 | 8,370 |
Research and development credit carryforwards | 1,107,559 | 812,781 |
Stock-based compensation | 688,998 | 451,757 |
Total deferred tax assets | 12,058,082 | 8,872,518 |
Deferred tax liabilities: | ||
Fixed assets and other | (140,538) | (64,189) |
Total deferred tax liabilities | (140,538) | (64,189) |
Valuation allowance | (11,917,544) | (8,808,329) |
Net deferred tax assets |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Contribution Plan [Abstract] | ||
Employees compensation percentage | 100% | |
Deferrals percentage | 100% | |
Contributions percentage | 3% | |
Internal Revenue percentage | 100% | |
Contributions amount (in Dollars) | $ 30,697 | $ 14,803 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Dec. 31, 2022 | Nov. 04, 2022 |
Subsequent Events (Details) [Line Items] | ||
Aggregate offering cost | $ 9,000,000 | |
Gross proceeds percentage | 3% | |
Minimum [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Rent lease | $ 4,453 | |
Maximum [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Rent lease | $ 4,632 |