Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 15, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Entity Registrant Name | Timber Pharmaceuticals, Inc. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 36,843,045 | ||
Entity Central Index Key | 0001504167 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Trading Symbol | TMBR | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Security Exchange Name | NYSE | ||
Entity Public Float | $ 12.1 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 10,348,693 | $ 57,073 |
Other current assets | 377,290 | 32,820 |
Total current assets | 10,725,983 | 89,893 |
Deposits | 114,534 | |
Right of use asset | 787,432 | |
Total assets | 11,627,949 | 89,893 |
Current liabilities | ||
Accounts payable | 395,049 | 501,451 |
Accrued expenses | 768,661 | 214,660 |
License payable | 750,000 | |
Lease liability, current portion | 217,651 | |
Total current liabilities | 1,381,361 | 1,466,111 |
Notes payable | 37,772 | |
Lease liability | 579,455 | |
Deferred tax liability | 37,842 | |
Other liabilities | 73,683 | |
Total liabilities | 2,110,113 | 1,466,111 |
Commitments and contingencies (Note 11) | ||
Members' and stockholders' equity (deficit) | ||
Common stock | 27,132 | |
Additional paid-in capital | 25,826,295 | |
Accumulated deficit | (18,245,396) | (3,075,113) |
Total members' and stockholders' equity (deficit) | 7,608,031 | (1,376,218) |
Total liabilities and members' and stockholders' equity (deficit) | 11,627,949 | 89,893 |
Preferred Units | ||
Members' and stockholders' equity (deficit) | ||
Preferred stock | 1,624,228 | |
Common Units | ||
Members' and stockholders' equity (deficit) | ||
Common stock | $ 74,667 | |
Redeemable Series A Convertible Preferred Stock | ||
Members' and stockholders' equity (deficit) | ||
Preferred stock | $ 1,909,805 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 27,132,420 | 0 |
Common stock, shares outstanding | 27,132,420 | 0 |
Redeemable Series A Convertible Preferred Stock | ||
Series A convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Series A convertible preferred stock, shares authorized | 2,500 | 2,500 |
Series A convertible preferred stock, shares issued | 1,819 | 0 |
Series A convertible preferred stock, shares outstanding | 1,819 | 0 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Consolidated Statement of Operations | ||
Grant revenues | $ 270,538 | $ 453,810 |
Operating costs and expenses | ||
Research and development | 1,748,887 | 2,733,026 |
Research and development - license acquired | 1,070,000 | 12,371,332 |
Transaction costs | 1,501,133 | |
Selling, general and administrative | 488,799 | 4,060,186 |
Total operating expenses | 3,307,686 | 20,665,677 |
Loss from operations | (3,037,148) | (20,211,867) |
Other income (expense) | ||
Interest expense | (4,416,746) | |
Interest income | 816,657 | |
Change in fair value of investment in BioPharmX | 559,805 | |
Change in fair value of warrant liability | 8,156,770 | |
Gain (loss) on foreign currency exchange | (130) | 15,609 |
Total other income (expense) | (130) | 5,132,095 |
Loss before provision for income taxes | (3,037,278) | (15,079,772) |
Provision for income taxes | 37,842 | |
Net loss | (3,037,278) | (15,117,614) |
Accrued dividend on preferred stock units | (37,835) | (52,669) |
Cumulative dividends on Series A preferred stock | (90,516) | |
Net loss attributable to common stockholders | $ (3,075,113) | $ (15,260,799) |
Basic and diluted net loss per share attributable to common stockholders | $ (0.49) | $ (0.97) |
Basic and diluted weighted average number of shares outstanding | 6,295,724 | 15,699,869 |
Consolidated Statements of Memb
Consolidated Statements of Members' and Stockholders' Equity (Deficit) - USD ($) | Series A preferred stock | Preferred Units | Common Units | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning Balance at Feb. 25, 2019 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Beginning Balance (in shares) at Feb. 25, 2019 | 0 | 0 | 0 | 0 | |||
Increase (decrease) in stockholders' equity (deficit) | |||||||
Issuance of stock for cash | $ 1,399,900 | $ 100 | 100 | ||||
Issuance of stock for cash (in shares) | 1,400,000 | 10,000 | |||||
Non-cash contribution from TardiMed | $ 186,493 | 186,493 | |||||
Non-cash contribution from TardiMed(in shares) | 186,493 | ||||||
Accrued preferred unit dividend | $ 37,835 | (37,835) | |||||
Accrued preferred unit dividend (in shares) | 37,835 | ||||||
Stock-based compensation | $ 74,567 | 74,567 | |||||
Net loss | (3,037,278) | (3,037,278) | |||||
Ending Balance at Dec. 31, 2019 | $ 1,624,228 | $ 74,667 | (3,075,113) | (1,376,218) | |||
Ending Balance (in shares) at Dec. 31, 2019 | 1,624,328 | 10,000 | |||||
Increase (decrease) in stockholders' equity (deficit) | |||||||
Issuance of common stock for acquisition of BioPharmX | $ 1,367 | 8,366,666 | 8,368,033 | ||||
Issuance of common stock for acquisition of BioPharmX (in shares) | 1,367,326 | ||||||
Issuance of stock for cash | $ 4,186 | 17,495,814 | 17,500,000 | ||||
Issuance of stock for cash (in shares) | 4,185,981 | ||||||
Series A liability classified warrants | 16,511,634 | 16,511,634 | |||||
Bridge Loan converted to equity | 5,000,000 | 5,000,000 | |||||
Reclassification of bridge warrant | 3,423,204 | 3,423,204 | |||||
Non-cash contribution from TardiMed | $ 142,392 | 142,392 | |||||
Non-cash contribution from TardiMed(in shares) | 142,392 | ||||||
Accrued preferred unit dividend | $ 52,669 | (52,669) | |||||
Accrued preferred unit dividend (in shares) | 52,669 | ||||||
Conversion of common units to common stock pursuant to BioPharmX acquisition | $ (74,667) | $ 6,296 | 68,371 | 74,667 | |||
Conversion of common units to common stock pursuant to BioPharmX acquisition (in shares) | (10,000) | 6,295,724 | |||||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition | $ 1,819,289 | $ (1,819,289) | (1,819,289) | ||||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition (in shares) | 1,819 | (1,819,389) | |||||
Accrued dividend series A preferred stock | $ 90,516 | (90,516) | (90,516) | ||||
Exercise of Series B warrants | $ 15,283 | (8,907) | 6,377 | ||||
Exercise of Series B warrants (in shares) | 15,283,389 | ||||||
Reclassification of Series A warrant liability | 7,864,377 | 7,864,377 | |||||
Stock-based compensation | 218,919 | 218,919 | |||||
Net loss | (15,117,614) | (15,117,614) | |||||
Ending Balance at Dec. 31, 2020 | $ 1,909,805 | $ 27,132 | $ 25,826,295 | $ (18,245,396) | $ 7,608,031 | ||
Ending Balance (in shares) at Dec. 31, 2020 | 1,819 | 27,132,420 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (3,037,278) | $ (15,117,614) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Research and development-licenses acquired | 1,070,000 | 12,371,332 |
Non-cash contribution from TardiMed | 186,493 | 142,392 |
Stock-based compensation | 74,567 | 218,919 |
Change in fair value of warrant liability | (8,156,770) | |
Change in fair value of investment in BioPharmX | (559,805) | |
Amortization of loan discount | (775,000) | |
Amortization of debt discount | 4,232,718 | |
Amortization of right of use assets | 116,938 | |
Accrued interest on BioPharmX loan | (41,655) | |
Accrued interest on bridge notes | 183,333 | |
Deferred taxes | 37,842 | |
Changes in assets and liabilities: | ||
Other current assets | (32,820) | (342,443) |
Accounts payable | 501,451 | (716,525) |
Accrued expenses | 214,660 | 221,671 |
Lease liability | (108,646) | |
Net cash used in operating activities | (1,022,927) | (8,293,313) |
Cash flows from investing activities | ||
Cash acquired with acquisition of BioPharmX | 340,786 | |
Loan to BioPharmX | (2,250,000) | |
Purchase of research and development licenses - AFT Pharmaceuticals Limited | (320,000) | (750,000) |
Net cash used in investing activities | (320,000) | (2,659,214) |
Cash flows from financing activities: | ||
Proceeds from PPP loan | 37,772 | |
Proceeds from the issuance of preferred stock | 1,399,900 | |
Proceeds from the issuance of common stock and warrants, net of issuance costs | 100 | 17,500,000 |
Proceeds from bridge notes payable | 3,700,000 | |
Proceeds from the exercise of Series B warrants | 6,375 | |
Net cash provided by financing activities | 1,400,000 | 21,244,147 |
Net increase in cash and cash equivalents | 57,073 | 10,291,620 |
Cash and cash equivalents, beginning of year | 57,073 | |
Cash and cash equivalents, end of year | $ 57,073 | 10,348,693 |
Non cash investing and financing activities: | ||
Issuance of common stock for acquisition of BioPharmx | 8,368,033 | |
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition | 1,819,289 | |
Conversion of common units to common stock pursuant to BioPharmX acquisition | 74,667 | |
Bridge loan converted to equity | 5,000,000 | |
Reclassification of bridge warrant | 3,423,204 | |
Series A liability classified warrants | 16,511,634 | |
Reclassification of Series A warrant liability | $ 7,864,377 |
Organization and description of
Organization and description of business operations | 12 Months Ended |
Dec. 31, 2020 | |
Organization and description of business operations | |
Organization and description of business operations | Note 1. Organization and description of business operations Timber Pharmaceuticals, Inc., formerly known as BioPharmX Corporation (together with its subsidiary Timber Pharmaceuticals Australia Pty Ltd. and Timber Pharmaceuticals LLC, the “Company” or “Timber”) is incorporated under the laws of the state of Delaware. Timber was founded in 2019 to develop treatments for unmet needs in medical dermatology. Timber has a particular focus on rare diseases or conditions of the skin for which there are no current treatments. Timber is initially targeting multiple indications in rare/orphan dermatology with no approved treatments. Merger Agreement On May 18, 2020, BioPharmX Corporation (“BioPharmX”) completed its business combination with Timber Pharmaceuticals LLC, a Delaware limited liability company (“Timber Sub”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of January 28, 2020 (the “Merger Agreement”), by and among BioPharmX, Timber Sub and BITI Merger, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), as amended by Amendment No. 1 thereto made and entered into as of March 24, 2020 (the “First Amendment”) and Amendment No. 2 thereto made and entered into as of April 27, 2020 (the “Second Amendment”) (the Merger Agreement, as amended by the First Amendment and the Second Amendment, the “Amended Merger Agreement”), pursuant to which Merger Sub merged with and into Timber Sub, with Timber Sub surviving as a wholly-owned subsidiary of the Company (the “Merger”). In connection with, and immediately prior to the completion of, the Merger, BioPharmX effected a reverse stock split of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1‑for‑12 (the “Reverse Stock Split”). Immediately after completion of the Merger, BioPharmX changed its name to “Timber Pharmaceuticals, Inc.” and the officers and directors of Timber Sub became the officers and directors of the Company. Under the terms of the Amended Merger Agreement, BioPharmX issued shares of Common Stock to the holders of common units of Timber Sub. Immediately after the Merger, there were approximately 11,849,031 shares of Common Stock outstanding (after the Reverse Stock Split). Pursuant to the terms of the Amended Merger Agreement, the former holders of common units of Timber Sub (including the Investors, as defined below, but excluding Value Appreciation Rights of Timber Sub (“VARs”), as defined below) owned in the aggregate approximately 88.5% of the outstanding Common Stock, with the Company’s stockholders immediately prior to the Merger owning approximately 11.5% of the outstanding Common Stock. The number of shares of Common Stock issued to the holders of common units of Timber Sub for each common unit of Timber Sub outstanding immediately prior to the Merger was calculated using an exchange ratio of approximately 629.57 shares of Common Stock for each Timber Sub unit. In addition, the 584 VARs that were outstanding immediately prior to Merger became denoted and payable in 367,670 shares of Common Stock at the Effective Time of the Merger (the “Effective Time”). Further, the holder of the 1,819,289 preferred units of Timber Sub outstanding immediately prior to the Merger received 1,819 shares of the newly created convertible Series A preferred stock at the Effective Time. As part of the Merger, the Company assumed 220,030 legacy BioPharmX warrants with a weighted average exercise price of $164.17 per share, and 97,870 legacy BioPharmX stock options with a weighted average exercise price of $45.81 per share. In connection with the Merger Agreement, BioPharmX entered into a Credit Agreement with Timber Sub, pursuant to which Timber Sub made a bridge loan to the Company (the “Bridge Loan”), in an aggregate amount of $2.25 million with $250,000 original issue discount. The Company incurred approximately $1.5 million of legal, consulting and other professional fees related to the Merger, which were classified as transaction expenses in the accompanying consolidated statement of operations for the year ended December 31, 2020. Securities Purchase Agreement On May 18, 2020, Timber and Timber Sub completed a private placement transaction (the “Pre-Merger Financing”) with the Investors pursuant to the Securities Purchase Agreement for an aggregate purchase price of approximately $25.0 million (comprised of (i) approximately $5 million credit with respect to the senior secured notes issued in connection with the bridge loan that certain of the Investors made to Timber Sub at the time of the execution of the Merger Agreement and (ii) approximately $20 million in cash from the Investors). Pursuant to the Pre-Merger Financing, (i) Timber Sub issued and sold to the Investors common units of Timber Sub which converted pursuant to the exchange ratio in the Merger into an aggregate of approximately 4,137,509 shares (the “Converted Shares”) of Common Stock; and (ii) the Company agreed to issue to each Investor, on the tenth trading day following the consummation of the Merger, (A) Series A Warrants representing the right to acquire shares of Common Stock (“Series A Warrants”) equal to 75% of the sum of (a) the number of Converted Shares issued to the Investor, without giving effect to any limitation on delivery contained in the Securities Purchase Agreement, and (b) the number of shares of Common Stock underlying the Series B Warrants issued to the Investor (the “Series B Warrants”) and (B) the Series B Warrants. On June 2, 2020, pursuant to the terms of the Securities Purchase Agreement, the Company issued 8,384,764 Series A Warrants to purchase shares of Common Stock (“Series A Warrants”) and 7,042,175 Series B Warrants to purchase shares of Common Stock (“Series B Warrants”). In addition, pursuant to the terms of the Securities Purchase Agreement, dated as of January 28, 2020 between Timber Sub and several of the Investors, the Company issued to such purchasers, on May 22, 2020, warrants to purchase 413,751 shares of Common Stock (the “Bridge Warrants”) which have an exercise price of $2.2362 per share. Investor Warrants Series A Warrants The Series A Warrants have an exercise price of $1.16 per share, were exercisable upon issuance and will expire on the day following the later to occur of (i) June 2, 2025 and (ii) the date on which the Series A Warrants have been exercised in full (without giving effect to any limitation on exercise contained therein) and no shares remain issuable thereunder. As of March 15, 2021, the Series A Warrants are exercisable for 16,701,824 shares of Common Stock in the aggregate. Pursuant to the Series A Warrants, the Company has agreed not to enter into, allow or be party to certain fundamental transactions, generally including any merger with or into another entity, sale of all or substantially all of the Company’s assets, tender offer or exchange offer, or reclassification of the Common Stock (a “Fundamental Transaction”) until May 1, 2021. Thereafter, upon any exercise of a Series A Warrant, the holder shall have the right to receive, for each share of Common Stock that would have been issuable upon such exercise immediately prior to the occurrence of a Fundamental Transaction, at the option of the holder (without regard to any limitation on the exercise of the Series A Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which the Series A Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation on the exercise of the Series A Warrant). For purposes of any such exercise, the determination of the exercise price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the exercise price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of the Series A Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under the Series A Warrants, upon which the Series A Warrants shall become exercisable for shares of Common Stock, shares of the Common Stock of the Successor Entity or the consideration that would have been issuable to the holders had they exercised the Series A Warrants prior to such Fundamental Transaction, at the holders’ election. Additionally, at the request of a holder delivered before the 90th day after the consummation of a Fundamental Transaction, the Company must purchase such holder’s warrant for the value calculated using the Black-Scholes option pricing model as of the day immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated. If the Company fails to issue to a holder of Series A Warrants the number of shares of Common Stock to which such holder is entitled upon such holder’s exercise of the Series A Warrants, then the Company shall be obligated to pay the holder on each day while such failure is continuing an amount equal to 1.5% of the market value of the undelivered shares determined using a trading price of Common Stock selected by the holder while the failure is continuing and if the holder purchases shares of Common Stock in connection with such failure (“Series A Buy-In Shares”), then the Company must, at the holder’s discretion, reimburse the holder for the cost of such Series A Buy-In Shares or deliver the owed shares and reimburse the holder for the difference between the price such holder paid for the Series A Buy-In Shares and the market price of such shares, measured at any time of the holder’s choosing while the delivery failure was continuing. Further, the Series A Warrants provide that, in the event that the Company does not have sufficient authorized shares to deliver in satisfaction of an exercise of a Series A Warrant, then unless the holder elects to void such attempted exercise, the holder may require the Company to pay an amount equal to the product of (i) the number of shares that the Company is unable to deliver and (ii) the highest volume-weighted average price of a share of Common Stock as quoted on the NYSE American during the period beginning on the date of such attempted exercise and ending on the date that the Company makes the applicable payment. On November 19, 2020 the Company entered into waiver agreements with each of the holders of the Company’s Series A Warrants. Pursuant to the waiver agreements the holders agreed to waive certain provisions in the Warrants in order to allow for one immediate and final reset of the number of shares of common stock underlying the Warrants and the exercise price of the Series A Warrants, and permanently waive the provisions providing for future resets of the number of shares of common stock underlying the Warrants and the exercise price of the Series A Warrants (other than the anti-dilution protection provisions in the Series A Warrants providing for adjustments to the exercise price of the Series A Warrants upon a dilutive issuance). As a result, the exercise price of the Series A Warrants was set at $1.16 per share and the number of shares underlying all of the Series A Warrants was set at 20,178,214. Series B Warrants The Series B Warrants had an exercise price of $0.001 per share, were exercisable upon issuance and were exercised in full on March 4, 2021. The Series B Warrants were exercisable for 22,766,776 shares of Common Stock in the aggregate. On November 19, 2020 the Company entered into waiver agreements with each of the holders of the Company’s Series B Warrants. Pursuant to the waiver agreements the holders agreed to waive certain provisions in the Warrants in order to allow for one immediate and final reset of the number of shares of common stock underlying the Series B Warrants. As a result, the number of shares underlying all of the Series B Warrants was set at 22,766,776 and the exercise price remains at $.001 per share. During the year ended December 31, 2020, 15,292,744 Series B warrants were exercised for 15,284,992 shares of the Company’s common stock. The number of shares underlying a holder’s Series B Warrants was calculated using the existing formula set forth in the Series B Warrants and was reached by dividing the initial purchase price paid by the holder under the Purchase Agreement by a “Reset Price”, equal to the arithmetic average of the five (5) lowest Weighted Average Prices (as defined in the Warrants) of the Common Stock during the applicable “Reset Period,” in this case being the nine Trading Day (as defined in the Warrants) period ending on the Effective Date (but not less than the Reset Floor Price), and subtracting from such quotient the number of shares of Common Stock issued (or that were issuable) under the Purchase Agreement to the holder. Bridge Warrants The Bridge Warrants, were issued on May 22, 2020 to the Bridge Investors, have an exercise price of $2.2362 per share, were immediately exercisable upon issuance and have a term of five years from the date of issuance. The Bridge Warrants are exercisable for 413,751 shares of Common Stock in the aggregate. The Bridge Warrants provide that if Timber issues or sells or in accordance with the terms of the Bridge Warrants, is deemed to have issued or sold any shares of Common Stock for a price per share lower than the exercise price then in effect subject to certain limited exceptions, then the exercise price of the Bridge Warrants shall be reduced to such lower price per share. Upon the consummation of Fundamental Transaction by the Company, upon any exercise of a Bridge Warrant, the holder shall have the right to receive, for each share of Common Stock that would have been issuable upon such exercise immediately prior to the occurrence of a Fundamental Transaction, at the option of the holder (without regard to any limitation on the exercise of the Bridge Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which the Bridge Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation on the exercise of the Bridge Warrant). For purposes of any such exercise, the determination of the exercise price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the exercise price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of the Bridge Warrant following such Fundamental Transaction. The Company shall cause any Successor Entity to assume in writing all of the obligations of the Company under the Bridge Warrants, upon which the Bridge Warrants shall become exercisable for shares of Common Stock, shares of the Common Stock of the Successor Entity or the consideration that would have been issuable to the holders had they exercised the Bridge Warrants prior to such Fundamental Transaction, at the holders’ election. Additionally, at the request of a holder of a Bridge Warrant delivered before the 90th day after the consummation of a Fundamental Transaction, Timber or the successor entity must purchase such holder’s warrant for the value calculated using the Black-Scholes option pricing model as of the day immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated. The Bridge Warrants also contain a “cashless exercise” feature that allows the holders to exercise the Bridge Warrants without making a cash payment in the event that there is no effective registration statement registering the shares issuable upon exercise of the Bridge Warrants. The Bridge Warrants are subject to a blocker provision which restricts the exercise of the Bridge Warrants if, as a result of such exercise, the holder, together with its affiliates and any other person whose beneficial ownership of Common Stock would be aggregated with the holder’s for purposes of Section 13(d) of the Exchange Act would beneficially own in excess of 4.99% or 9.99% of the outstanding shares of Common Stock (including the shares of Common Stock issuable upon such exercise), as such percentage ownership is determined in accordance with the terms of the Bridge Warrants. Liquidity and Capital Resources The Company has no product revenues, incurred operating losses since Inception, and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. The Company had an accumulated deficit of approximately $18.2 million at December 31, 2020, a net loss of approximately $15.1 million, and approximately $8.3 million of net cash used in operating activities for the year ended December 31, 2020. Going Concern The Company has evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year beyond the filing of this Annual Report. Based on such evaluation and the Company’s current plans, which are subject to change, management believes that the Company’s existing cash and cash equivalents as of December 31, 2020 are not sufficient to satisfy its operating cash needs for the year after the filing of this Annual Report. The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern. The Company’s future liquidity and capital funding requirements will depend on numerous factors, including: · its ability to raise additional funds to finance its operations, including its ability to access financing that may be unavailable due to contractual limitations under the Securities Purchase Agreement; · the outcome, costs and timing of clinical trial results for the Company’s current or future product candidates, including the timing, progress, costs and results of its Phase 2b clinical trial of TMB‑001 for the treatment of congenital ichthyosis as well as its ongoing Phase 2b clinical trial of TMB‑002 for the treatment of facial angiofibromas in tuberous sclerosis complex; · the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; · the emergence and effect of competing or complementary products; · its ability to maintain, expand and defend the scope of its intellectual property portfolio, including the amount and timing of any payments the Company may be required to make, or that it may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; · the cost and timing of completion of commercial-scale manufacturing activities; · the cost of establishing sales, marketing and distribution capabilities for its products in regions where it chooses to commercialize its products on its own; · the initiation, progress, timing and results of the commercialization of its product candidates, if approved for commercial sale; · its ability to retain its current employees and the need and ability to hire additional management and scientific and medical personnel; and · the terms and timing of any collaborative, licensing or other arrangements that it has or may establish. The Company will need to raise substantial additional funds through one or more of the following: issuance of additional debt or equity and/or the completion of a licensing or other commercial transaction for one or more of the Company’s product candidates. If the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. This could affect future development and business activities and potential future clinical studies and/or other future ventures. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or convertible debt financings will likely have a dilutive effect on the holdings of the Company’s existing stockholders. The impact of the worldwide spread of a novel strain of coronavirus (“COVID-19”) has been unprecedented and unpredictable. Site activation and patient enrollment have recently been impacted by the COVID‑19 pandemic in the larger and longer TMB‑002 study, especially at our contracted test sites in Eastern Europe. The Company is continuing to assess the effect on its operations by monitoring the spread of COVID‑19 and the actions implemented to combat the virus throughout the world and its assessment of the impact of COVID‑19 may change. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Basis of Presentation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") as determined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and include all adjustments necessary for the fair presentation of its consolidated balance sheet, results of operations and cash flows for the period presented. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relate to the valuations of warrants, notes, and equity-based awards and member units. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and money market mutual funds. Research and Development Research and development costs, including in-process research and development acquired as part of an asset acquisition for which there is no alternative future use, are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. Accrued Outsourcing Costs Substantial portions of the Company’s preclinical studies and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors (collectively “CROs”). These CROs generally bill monthly or quarterly for services performed, or bill based upon milestone achievement. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. The Company outsources a substantial portion of its clinical trial activities, utilizing external entities such as CROs, independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical studies. For each clinical trial that the Company conducts, certain clinical trial costs are expensed immediately, while others are expensed over time based on the number of patients in the trial, the attrition rate at which patients leave the trial, and/or the period over which clinical investigators or CROs are expected to provide services. The Company’s estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. Fair Value Measurement The Company follows the accounting guidance in ASC 820 for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of December 31, 2020 and 2019, the recorded values of prepaid expenses, accounts payable, accrued expenses, and license payable, approximate the fair values due to the short-term nature of the instruments. Leases The Company accounts for its leases under the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Revenue Recognition The Company has not yet generated any revenue from product sales. The Company’s source of revenue in 2020 and 2019 has been from grants. When grant funds are received after costs have been incurred, the Company records grant revenue upon the receipt of cash. Warrant Liability The Company had accounted for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statements of operations. The Company issued Series A Warrants to purchase 8,384,764 shares of its common stock to investors in connection with the $20 million financing in May 2020, and recorded these outstanding warrants as a liability at fair value utilizing a Monte Carlo simulation model. As further described in Note 6, the fair value of the warrants issued by the Company in connection with the $5.0 million Bridge Notes has been estimated using a probability-weighted Black-Scholes option pricing model. Upon consummation of the Merger the Series B Warrants are classified as equity. Pursuant to the waiver agreement related to the Company’s Series A Warrants (see Note 1), on November 19, 2020, the warrant liability was reclassified to additional paid-in capital. Stock-Based Compensation The Company expenses stock-based compensation to employees, non-employees and board members over the requisite service period based on the estimated grant-date fair value of the awards and actual forfeitures. The Company accounts for forfeitures as they occur. Stock-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. All stock-based compensation costs are recorded in general and administrative or research and development costs in the consolidated statements of operations based upon the underlying individual’s role at the Company. In 2019, the Company granted VARs to certain employees at specified exercise prices. The Company estimates the fair value of VARs using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of equity-based awards represented management’s best estimates and involve inherent uncertainties and the application of management’s judgment. All equity-based compensation costs are recorded in general and administrative or research and development costs in the statements of operations. Convertible Preferred Stock The Company records shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company has applied the guidance in ASC 480‑10‑S99‑3A, Securities and Exchange Commission (“SEC”) Staff Announcement: Classification and Measurement of Redeemable Securities and has therefore classified the Series A convertible preferred stock as mezzanine equity. The convertible preferred stock is recorded outside of stockholders’ deficit because, in the event of certain change of control events considered not solely within the Company’s control, such as a merger, acquisition and sale of all or substantially all of the Company’s assets, the convertible preferred stock will become redeemable at the option of the holders. Loss Per Share Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. To calculate the basic EPS numerator, income available to common stockholders must be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not declared) from income from continuing operations and also from net income. If there is a loss from continuing operations or a net loss, the amount of the loss shall be increased by those preferred dividends. The outstanding Series A Preferred Stock has cumulative dividends, whether or not declared. The basic and diluted net loss amounts are the same for the year ended December 31, 2020 and the period from inception through December 31, 2019, as a result of the net loss and anti-dilutive impact of the potentially dilutive securities. Potentially dilutive shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, value appreciation rights, and warrants. Potentially dilutive shares issuable upon conversion of the Series A Preferred Stock are calculated using the if-converted method. The following is a reconciliation of the numerator and denominator of the diluted net loss per share computations for the periods presented below: For the Period from February 26, 2019 Year Ended (Inception) through December 31, 2020 December 31, 2019 Basic and diluted loss per share: Net loss $ (15,117,614) $ (3,037,278) Accrued dividend on preferred stock units (52,669) (37,835) Cumulative dividends on Series A preferred stock (90,516) Net loss attributable to common stockholders $ (15,260,799) $ (3,075,113) Basic and diluted weighted average number of shares outstanding 15,699,869 6,295,724 Basic and diluted net loss per share attributable to common stockholders $ (0.97) $ (0.49) Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share for the year ended December 31, 2020 and the period from inception through December 31, 2019, because their inclusion would be anti-dilutive are as follows: December 31, 2020 2019 Series A warrants 20,178,214 — Bridge warrants 413,751 — Variable appreciation rights 367,670 429,368 Options to purchase common stock 184,456 — Series A preferred stock 1,819,389 — Legacy stock options 15,781 — Legacy warrants 219,928 — 23,199,189 429,368 Income taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more-likely than not that some or all of the deferred tax assets will not be realized. The Company also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. In accordance with this guidance, tax positions must meet a more-likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of tax position. The Company’s policy is to account for income tax related interest and penalties in income tax expense in the accompanying consolidated statements of operations. Recent accounting pronouncements In June 2018, the FASB issued ASU 2018‑07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted this standard effective February 2019. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU No. 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, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impact this ASU will have on its condensed consolidated financial statements and related disclosures. |
Acquisition of BioPharmX
Acquisition of BioPharmX | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition of BioPharmX | |
Acquisition of BioPharmX | Note 3. Acquisition of BioPharmX As described in Note 1, on May 18, 2020, the Company completed its acquisition of BioPharmX in accordance with the terms of the Merger Agreement. The acquisition was accounted for as an asset acquisition/reverse merger. Pursuant to the Merger Agreement, following the Merger, the Timber Sub members, including the investors funding the $20 million investment and the bridge investors, own approximately 88.5% of the outstanding common stock of BioPharmX, and the BioPharmX stockholders own approximately 11.5% of the outstanding common stock as of the date of the merger. The cost of the BioPharmX acquisition, which represents the consideration transferred to BioPharmX stockholders in the BioPharmX acquisition, of $12.4 million consists of the following: Number of shares of the combined company owned by BioPharmX stockholders 1,367,326 Multiplied by the fair value per share of BioPharmX common stock $ 6.12 Total estimated fair value of common stock 8,368,033 Add: net liabilities acquired (2,833,453) Add: investment in BioPharmX (1,169,846) Total consideration - recorded as research and development acquired $ 12,371,332 The total cost of the BioPharmX acquisition was allocated to the net liabilities acquired as follows: Cash and cash equivalents $ 340,786 Other current assets 2,027 Deposits 114,534 ROU asset 904,370 Accounts payable (610,882) Credit cards 760 Accrued expenses (148,999) Note - short term (2,456,614) Operating lease liability - short term (259,712) Other long term liabilities (73,682) Operating lease liability - long term (646,041) Net liabilities acquired $ (2,833,453) |
Credit Agreement with BioPharmX
Credit Agreement with BioPharmX | 12 Months Ended |
Dec. 31, 2020 | |
Credit Agreement with BioPharmX | |
Credit Agreement with BioPharmX | Note 4. Credit Agreement with BioPharmX Loan to BioPharmX In 2020, prior to the BioPharmX acquisition the Company loaned BioPharmX $2.5 million in three tranches. During the year ended December 31, 2020, the Company recorded interest income of approximately $42,000. In connection with the loan the Company also received a warrant which was subsequently exercised for 193,596 common shares of BioPharmX. The following is a summary of the loan and investment in BioPharmX during the year ended December 31, 2020: Investment in Loan to BioPharmX BioPharmX Total Balance as of January 1, 2020 $ — $ — $ — Principal balance 2,400,000 — 2,400,000 Accrued interest 41,655 — 41,655 Fair value of BioPharmX common stock — 625,000 625,000 Change in fair value — 559,805 559,805 Balance as of May 18, 2020 $ 2,441,655 $ 1,184,805 $ 3,626,460 Acquisition of BioPharmX (2,456,614) — (2,456,614) Loan and investment in BioPharmX - recorded as research and development license acquired 14,959 (1,184,805) (1,169,846) Balance as of December 31, 2020 $ — $ — $ — |
Purchases of Assets
Purchases of Assets | 12 Months Ended |
Dec. 31, 2020 | |
Purchases of Assets | |
Purchases of Assets | Note 5. Purchases of Assets Acquisition of Intellectual Property Rights from Patagonia Pharmaceuticals LLC ("Patagonia") On February 28, 2019, the Company acquired the intellectual property rights to a topical formulation of isotretinoin for the treatment of congenital ichthyosis and identified as TMB‑001, formerly PAT‑001, from Patagonia (the "TMB‑001 Acquisition"). Upon closing of the TMB‑001 Acquisition, the Company paid a one-time upfront payment of $50,000 to Patagonia. Patagonia is entitled to up to $27.0 million of cash milestone payments relating to certain regulatory and commercial achievements of TMB‑001, with the first being $4.0 million for the initiation of a Phase 3 pivotal trial, as agreed with the FDA. In addition, Patagonia is entitled to net sales earn-out payments ranging from low single digits to mid- double digits. The Company is responsible for all development activities. The potential regulatory and commercial milestones are not yet considered probable, and no milestone payments have been accrued at December 31, 2020 and 2019. On June 26, 2019 the Company acquired the intellectual property rights to a locally administered formulation of sitaxsentan for the treatment of cutaneous fibrosis and/or pigmentation disorders, and identified as TMB‑003, formerly PAT-S03, from Patagonia (the "TMB‑003 Acquisition"). Upon closing of the TMB‑003 Acquisition, the Company paid a one-time upfront payment of $20,000 to Patagonia. Patagonia is entitled to up to $10.25 million of cash milestone payments relating to certain regulatory and commercial achievements of TMB‑003, with the first being a one-time payment of $250,000 upon the opening of an IND with the FDA. In addition, Patagonia is entitled to net sales earn-out payments ranging from low to mid-single digits. The Company is responsible for all development activities. The potential regulatory and commercial milestones are not yet considered probable, and no milestone payments have been accrued at December 31, 2020 and 2019. The TMB‑001 Acquisition and TMB‑003 Acquisition were accounted for as an asset acquisition as the majority of the fair value of the assets acquired were concentrated in a group of similar assets, and the acquired assets did not have outputs or employees. Because the assets had not yet received regulatory approval, the purchase price paid for these assets was recorded as research and development expense in the Company’s statement of operations for the period from Inception to December 31, 2019. On January 12, 2021, the Company announced that the U.S. Food and Drug Administration has granted orphan drug designation to TMB‑003. Acquisition of License from AFT Pharmaceuticals Limited ("AFT") On July 5, 2019, the Company and AFT entered into a license agreement which provides the Company with (i) an exclusive license to certain licensed patents, licensed know-how and AFT trademarks to commercialize the Pascomer product in the United States, Canada and Mexico and (2) a co-exclusive license to develop the Pascomer product in this territory. Concurrently, the Company granted to AFT an exclusive license to commercialize the Pascomer product outside of the Company’s territory and co-exclusive sublicense to develop and manufacture the licensed product for commercialization outside of the Company’s territory (the "AFT License Agreement"). The AFT License Agreement also provides for the formation of a joint steering committee to oversee, coordinate and review recommendations and approve decisions in respect of the matters the development and commercialization of the Pascomer product, in which both the Company and AFT have the right to appoint two members. The committee is currently comprised of three members. We have final decision-making authority on all matters relating to the commercialization of the Pascomer product in the specified territory and on all matters related to the development (and regulatory approval) of the Pascomer product, with certain exceptions. The development of the Pascomer product is being conducted pursuant to a written development plan, written by AFT and approved by the joint steering committee, which is reviewed on at least an annual basis. AFT shall perform clinical trials of the Pascomer product in the specified territory and shall perform all CMC (chemistry, manufacturing and controls) and related activities to support regulatory approval. The Company is responsible for all expenses incurred by AFT during the term of the AFT License Agreement and shall equally share all costs and expenses with AFT, incurred by AFT for development and marketing work performed in furtherance of regulatory approval and commercialization worldwide, outside of the specified territory. The Company is entitled to receive a significant percentage of the economics (royalties and milestones) in any licensing transaction that AFT executes outside of North America, Australia, New Zealand, and Southeast Asia. Pursuant to the AFT License Agreement, the Company is obligated to reimburse AFT for previously spent development costs, subject to certain limitations, and to pay a one-time, irrevocable and non-creditable upfront payment to AFT, payable in scheduled installments. Specifically, the Company paid $0.25 million in October 2019 and the remaining $0.75 million due in quarterly installments with the last payment on July 1, 2020. AFT is entitled to up to $25.5 million of cash milestone payments relating to certain regulatory and commercial achievements of the AFT License. In addition, AFT is entitled to net sales royalties ranging from high single digits to low double digits for the program licensed. The potential regulatory and commercial milestones are not yet considered probable, and no milestone payments have been accrued at December 31, 2020 and 2019. The AFT License Agreement was accounted for as an asset acquisition pursuant to ASU 2017‑01 as the majority of the fair value of the assets acquired were concentrated in a group of similar assets, and the acquired assets did not have outputs or employees. Because the assets had not yet received regulatory approval, the purchase price paid for these assets was recorded as research and development expense in the Company’s statement of operations for the period from Inception to December 31, 2019. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 6. Fair Value Measurements During the year ended December 31, 2020, in connection with the Bridge Notes, the Company assumed a warrant obligation to purchase shares of the Company’s common stock. Each warrant was exercisable into a number of shares of $0.001 par value common stock of BioPharmX, and had a term of 5 years from the closing date of the Merger (See Note 8). The warrant obligation was recognized as a Level 3 liability on the funding dates and adjusted to fair value. Upon issuance of the warrant on May 18, 2020, the warrant liability was reclassified to equity. The inputs using the probability Black-Scholes model to calculate the fair value of the warrants related to the Bridge Notes are as follows: For the period January 28, 2020 - May 18, 2020 Dividend yield — Expected price volatility 84.9 % Risk free interest rate 0.38% - 1.48 % Expected term 5.0 - 5.3 years On June 2, 2020, in connection with the Merger Agreement, the Company issued Series A Warrants with an initial exercise price of $2.7953 per share, are immediately exercisable upon issuance, and have a term of five years from the date of issuance. The Series A Warrants were initially exercisable for 8,384,764 shares of common stock in the aggregate. On November 19, 2020, in connection with the Series A Warrants waiver agreements (see Note 1), the number of shares of common stock underlying the Series A Warrants was set at 20,178,214 and have a set exercise price of $1.16 per share. The inputs using the Monte Carlo simulation model in measuring the Company’s Series A Warrants at the issuance date of June 2, 2020 and during the year ended December 31, 2020, are as follows: Year Ended June 2, 2020 December 31, 2020 Dividend yield — — Expected price volatility 78.2 % 78.8% - 81.6 % Risk free interest rate 0.32 % 0.26% - 0.35 % Expected term (in years) 5.0 4.5 The warrants were classified as liabilities and measured at fair value on the issuance date, with subsequent changes in fair value recognized as other expense on the consolidated statement of operations. As of December 31, 2020, the warrant liability was reclassified to equity. There were no assets or liabilities measured at fair value during the year ended December 31, 2019. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2020: Bridge Warrants Series A Warrants Total Balance at January 1, 2020 $ — $ — $ — January 28, 2020 - First closing issuance 929,899 — 929,899 February 14, 2020 - Second closing issuance 981,557 — 981,557 March 13, 2020 - Third closing issuance 1,021,262 — 1,021,262 Sub-total 2,932,718 — 2,932,718 Issuance of Series A warrants — 16,511,634 16,511,634 Change in fair value 490,486 (8,647,256) (8,156,770) Reclassification of bridge warrants to equity (3,423,204) — (3,423,204) Reclassification of Series A warrants to equity — (7,864,378) (7,864,378) Balance at December 31, 2020 $ — $ — $ — |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | Note 7. Accrued Expenses The Company’s accrued expenses consisted of the following: December 31, December 31, 2020 2019 Research and development $ 158,911 $ 128,239 Professional fees 142,599 — Personnel expenses 438,722 86,421 Other 28,429 — Total $ 768,661 $ 214,660 |
Bridge Notes Payable
Bridge Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Bridge Notes Payable | |
Bridge Notes Payable | Note 8. Bridge Notes Payable In connection with the Merger Agreement and the Credit Agreement, Timber entered into a Securities Purchase Agreement, dated as of January 28, 2020 (the “SPA”) with certain institutional investors (the “Buyers”), pursuant to which the Buyers agreed to purchase, and Timber agreed to issue, senior secured promissory notes (the “Bridge Notes”) from Timber in the aggregate principal amount of $5 million, in exchange for an aggregate purchase price of $3.75 million, representing aggregate discount of $1.25 million. Timber also agreed to reimburse the Buyer’s representative $50,000 in transaction costs. The Company was also obligated to issue warrants to the Buyers (as further discussed below) In the quarter ended March 31, 2020, the Company received a total of $3.7 million. The Bridge Notes bear interest at a rate of 15% per annum (25% upon the occurrence of an event of default thereunder) and are repayable upon the earlier of (i) the closing of a fundamental transaction of Timber, (ii) the date on which Timber’s equity is registered under the Securities Exchange Act of 1934, as amended or is exchanged for equity so registered the Public Company Date or (iii) July 28, 2020. The Bridge Notes and any unpaid interest are automatically exchangeable into securities issued pursuant to the Securities Purchase Agreement, described in Note 1, based on the per share price received from investors in the Securities Purchase Agreement, which was $6.0423, per share. The Company issued 827,499 shares to settle the Bridge Notes. In connection with the SPA, the Company was obligated, within five trading days following the consummation of the first capital raising transaction, post-Merger (see Note 1), to issue to the Buyers, warrants to purchase a total number shares of common stock that equates to 100% of the as-converted shares, as if the Bridge Notes were convertible at the lowest price any securities are sold, convertible or exercisable into in the Timber Funding or the next round of financing. Each warrant would be exercisable into a number of shares of $0.001 par value common stock of BioPharmX, and have a term of 5 years from the closing date of the Merger. The warrants do not meet the scope exception of ASC 815, Derivative Accounting, and therefore, have been accounted for as a liability. The warrant liability had initially been recorded at the fair value on the date the Company became obligated to issue the warrants (each closing date of the Bridge Notes), with subsequent changes in fair value recognized at each reporting period end date (See Note 6). There was no change in fair value of the warrants recognized during the year ended December 31, 2020, the Company recorded approximately $0.6 million as the change in fair value of the warrants as reflected in the consolidated statement of operations. The Company recorded the debt less its discount and less the fair value of the warrant liability. Pursuant to the Merger Agreement, as of May 18, 2020, the Company reclassified its Bridge Notes and related warrant liability to equity. The following table reflects the activity related to the Company’s Bridge Notes during the year ended December 31, 2020 and as of December 31, 2020: Bridge Notes Payable Balance at January 1, 2020 $ — January 28, 2020 - First closing issuance 1,666,666 February 14, 2020 - Second closing issuance 1,666,667 March 13, 2020 - Third closing issuance 1,666,667 Original issue discount (1,300,000) Discount resulting from allocation of proceeds to warrant liability (2,932,718) Sub-total 767,282 Amortization of debt discount 4,232,718 Reclassification of bridge note to equity (5,000,000) Balance at December 31, 2020 $ — The debt discount resulting from the allocation of proceeds to the warrant liability was amortized through interest expense during the year ended December 31, 2020. The inputs used to calculate the fair value of the warrants using the probability Black-Scholes model are as follows: For the period January 28,2020- May 18, 2020 Dividend yield — Expected price volatility 84.9 % Risk free interest rate 0.38% - 1.48 % Expected term 5.0 - 5.3 years |
Temporary Equity, and Members'
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | 12 Months Ended |
Dec. 31, 2020 | |
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | |
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | Note 9. Temporary Equity, and Members’ and Stockholder’s Equity (Deficit) The Company entered into a Merger Agreement with BioPharmX and effective May 18, 2020, the Company converted its common and preferred units into shares of common and preferred stock. Common Stock On May 18, 2020, immediately prior to the Merger, the Company filed an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a Reverse Stock Split. As a result of the Reverse Stock Split, the number of issued and outstanding shares of common stock immediately prior to the Reverse Stock Split was reduced into a smaller number of shares, such that every 12 shares of common stock held by a stockholder of the Company immediately prior to the Reverse Stock Split were combined and reclassified into one share of common stock after the Reverse Stock Split. All outstanding and unexercised warrants to purchase shares of common stock otherwise remain in effect pursuant to their terms, subject to adjustment to account for the Reverse Stock Split. Immediately following the Reverse Stock Split there were approximately 1,367,326 shares of common stock outstanding prior to the Merger. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares instead received cash in lieu of their fractional shares. Under the terms of the Amended Merger Agreement, the Company issued shares of common stock to the holders of common units. The 9,000 common units issued to TardiMed have been converted into 5,666,152 shares of common stock, and the 1,000 common units issued to Patagonia have been converted into 629,572 shares of common stock. On May 18, 2020, pursuant to the Merger Agreement (see Note 1), 1,367,326 shares of common stock were issued for the acquisition of BioPharmX (see Note 4), with a fair value of approximately $8.4 million or $6.12 per share. On May 18, 2020, pursuant to the Merger Agreement, 4,186,625 shares of common stock were issued to the investors of the $20 million private placement financing (See Note 1), aggregate net proceeds received totaled $17.5 million) and to settle the $5 million Bridge Notes. Bridge Warrants On May 22, 2020, pursuant to the Securities Purchase Agreement, the Company issued the Bridge Warrants exercisable for 413,751 shares of Common Stock in the aggregate (see Note 1). The Bridge Warrants have an exercise price of $2.2362 per share, were immediately exercisable upon issuance and have a term of five years from the date of issuance. Redeemable Series A Convertible Preferred Stock In connection with the Merger, on May 18, 2020, the Company filed a Certificate of Designation of Preferences, Rights and Limitations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware that became effective immediately. Pursuant to the Certificate of Designations, the Company designated 2,500 shares of the Company’s previously undesignated preferred stock as Series A Preferred (the “Series A Preferred Stock”). The shares of Series A Preferred Stock have no voting rights. The holders of the Series A Preferred Stock are entitled to cumulative dividends from an after the date of issuance at a per annum of eight percent (8.00%) of the stated value. Dividends will be payable as and if declared by the Board out of amounts legally available therefore or upon a liquidation or redemption. Each share of Series A Preferred Stock is convertible at any time at the holder’s option into a number of shares of common stock (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions as specified in the Certificate of Designations) at a conversion price equal to the stated value of the Series A Preferred Stock of $1,000 (plus any accrued dividends) divided by the conversion price, which shall be the greater of (i) $18.054 and (ii) the amount that is 110% of the Final Price Per Share (as defined in the Financing Purchase Agreement), or $2.46. Holders of the Series A Preferred Stock are entitled to a liquidation preference in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company. In addition, upon a Change of Control, the Series A Preferred Stock shall be redeemable for cash at the option of the holders, in whole or in part. As of December 31, 2020 and 2019, the Company accrued preferred dividends of $143,185 and $37,835 respectively as a component of members’ deficit. As of May 18, 2020, pursuant to the Merger Agreement, the holder of 1,819,289 preferred units of Timber Sub outstanding immediately prior to the Merger, received 1,819 shares of newly created convertible Series A preferred stock. The Company’s Series A Preferred Stock is currently redeemable at December 31, 2020 at the option of the holder and has been recorded at the redemption value of $1.9 million. The following table summarizes the Company’s Series A Preferred Stock for the year ended December 31, 2020: Series A Preferred Stock Shares Amount Total temporary equity as of January 1, 2020 — $ — Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition 1,819 1,819,289 Cumulative dividends on Series A Preferred Stock — 90,516 Total temporary equity as of December 31, 2020 1,819 $ 1,909,805 As of December 31, 2019, the membership units issued and paid were as follows: Units Common units 10,000 Preferred units 1,586,493 The Amended and Restated Limited Liability Company Agreement, between TardiMed Sciences LLC ("TardiMed") and Patagonia, as of March 20, 2019 and as amended on July 26, 2019 (the "LLC Agreement"), provides that 9,000 common units have been issued to TardiMed and are outstanding, and 1,000 common units have been issued to Patagonia and are outstanding. These common units were issued in exchange for initial capital contributions from TardiMed and Patagonia of $90 and $10, respectively. In addition, pursuant to the LLC Agreement, TardiMed agreed to commit $2.5 million of capital of the Company in exchange for preferred units, at a purchase price of $1.00 per Preferred Unit. During 2019, TardiMed contributed $1.6 million of its commitment capital and 1,586,493 Preferred units have been issued to TardiMed and are outstanding. Rights of membership units As agreed to in the LLC Agreement, the Company shall be managed by a board of managers (the "Board") composed initially of up to three members ("Managers"), elected by the common unitholders and preferred unitholders holding a majority of the outstanding common units. Pursuant to the LLC Agreement, Patagonia has the right to appoint one Manager on the Board for a period of three years. With certain exceptions provided for in the LLC Agreement, each Manager shall have one vote. Distributions rights Preferred units are entitled to an eight percent cumulative annual return on the sum of such Preferred units outstanding, which shall accrue and compound annually, whether or not declared, and whether or not there are funds legally available for the payment thereof. Such preferred unit return is in preference to any distributions to common unit holders. Series B Warrants During the year ended December 31, 2020, 15,292,744 Series B Warrants were exercised for 15,284,992 shares of the Company’s common stock and the Company received proceeds of $6,375 |
Equity-based compensation
Equity-based compensation | 12 Months Ended |
Dec. 31, 2020 | |
Equity-based compensation | |
Equity-based compensation | Note 10. Equity-based compensation On May 18, 2020, the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) became effective, and the 2020 Plan reserved a total of 970,833 shares of common stock for issuance. The 2020 Plan provides for options to purchase shares of common stock, stock appreciation rights, restricted stock units, restricted or unrestricted shares of common stock, performance shares, performance units, incentive bonus awards, other stock-based awards and other cash-based awards. Options granted generally vest over a period of three years and have a maximum term of ten years from the date of grant. Furthermore, the Company maintains its 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan permits the granting of incentive units (the “Incentive Units”). The maximum aggregate Incentive Units that may be subject to awards and issued under the Plan is 699,454. At December 31, 2020 and 2019, Incentive Units outstanding under the 2019 Plan were 367,671 and 437,553 units, respectively. During the year ended December 31, 2020 and the period from inception through December 31, 2019, stock-based compensation expenses were as follows: For the Period from February 26, 2019 Year Ended (Inception) through December 31, 2020 December 31, 2019 Employee value appreciation right awards $ 72,975 $ 74,567 Stock options 145,944 — $ 218,919 $ 74,567 The Company has a 2019 Equity Incentive Plan (the "Plan") that permits the granting of incentive units (the "Incentive Units"). The maximum aggregate units that may be subject to awards and issued under the Plan is 1,111. At December 31, 2019, 695 Incentive Units were outstanding under the Plan. Value Appreciation Rights In 2019 the Company granted equity-based awards similar to stock options under the 2019 Plan as Value Appreciation Rights (“VARs”). The VARs have an exercise price, a vesting period and an expiration date, in addition to other terms similar to typical equity option grant terms. The following is a summary of VARs issued and outstanding as of December 31, 2020 and for the year ended December 31, 2020: Weighted Average Remaining Weighted Average Contractual Life (in Number of Units Exercise Price Total Intrinsic Value years) Outstanding as of February 26, 2019 (Inception) — $ — $ — — Issued 462,106 $ 0.01 8.9 Cancelled (24,553) $ 0.01 — Outstanding as of December 31, 2019 437,553 $ 0.01 $ 279,077 9.4 Cancelled (69,882) $ 0.01 — Outstanding as of December 31, 2020 367,671 $ 0.01 $ 269,502 8.4 Exercisable at December 31, 2020 87,511 $ 0.01 $ 64,145 8.4 On January 6, 2020, 69,882 VARs were cancelled due to the voluntary termination of the Company’s Chief Science Officer. During the year ended December 31, 2020, approximately $8,000 of compensation costs were reversed related to the cancelled VARs. As of December 31, 2020, the unrecognized compensation costs were approximately $0.1 million, which will be recognized over an estimated weighted-average amortization period of 1.1 years. Stock Options During the year ended December 31, 2020, the Company granted 232,996 options to purchase shares of the Company’s common stock to employees and board members. The following is a summary of the options outstanding as of December 31, 2020: Weighted Average Remaining Shares Underlying Weighted Average Contractual Aggregate Intrinsic Options Exercise Price Term (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 232,996 $ 2.87 9.4 — Canceled (48,540) $ 2.87 — — Outstanding as of December 31, 2020 184,456 $ 2.87 9.4 $ — Exercisable at December 31, 2020 — $ 2.87 9.4 $ — During the year ended December 31, 2020, 48,540 options to purchase shares of the Company’s common stock were canceled due to the voluntary termination of two of the Company’s employees. During the year ended December 31, 2020, approximately $18,000 of compensation costs were reversed related to the cancelled options. As part of the Merger, the Company assumed the following legacy stock options and warrants: Weighted Average Shares Underlying Remaining Options and Weighted Average Contractual Aggregate Intrinsic Warrants Exercise Price Term (Years) Value Legacy BioPharmX options - May 18, 2020 45,975 $ 65.97 1.2 $ — Canceled (30,194) $ 61.11 — $ — Legacy BioPharmX options - December 31, 2020 15,781 $ 75.27 2.3 $ — Legacy BioPharmX warrants 219,928 $ 164.09 2.7 $ — The fair value of stock option grants are estimated on the date of grant using the Black-Scholes option-pricing model. The Company was historically a private company and lacked company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. Additionally, due to an insufficient history with respect to stock option activity and post-vesting cancellations, the expected term assumption for employee grants is based on a permitted simplified method, which is based on the vesting period and contractual term for each tranche of awards. The mid-point between the weighted-average vesting term and the expiration date is used as the expected term under this method. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect for time periods approximately equal to the expected term of the award. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The following are the key assumptions used to estimate the fair value of the stock options granted during the year ended December 31, 2020: Year Ended December 31, 2020 Expected life 5-7 years Expected volatility 79.0 % Risk-free interest rate 0.3 % Expected dividend yield — As of December 31, 2020, the unrecognized compensation costs related to stock options were approximately $0.2 million, which will be recognized over an estimated weighted-average amortization period of 1.1 years. There were no options outstanding during the period from February 26, 2019 (Inception) through December 31, 2019. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Income taxes | Note 11. Income taxes The components of earnings before income taxes for the year ended December 31, 2020 were as follows: Year Ended December 31, 2020 Income (loss) before income taxes: Domestic $ (14,839,605) Foreign (240,167) $ (15,079,772) The provision for income taxes for the year ended December 31, 2020 is as follows: December 31, 2020 Current US Federal $ — US State — Total current provision — Deferred US Federal — US State — Foreign 37,842 Total deferred provision 37,842 Total provision for income taxes $ 37,842 A reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows: December 31, 2020 Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 5.5 % Foreign rate differential (0.1) % Non-taxable entity (6.0) % Change in FV of warrant liability 11.8 % Convertible note interest (4.6) % Other 0.2 % Change in valuation allowance (28.2) % Income taxes provision (benefit) (0.4) % The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets and liabilities consist of the following: December 31, 2020 Deferred tax assets: Net operating loss 26,359,856 Research and Development Credits 1,216,951 Fixed assets 21,998 Intangible assets 53,297 Impairment Loss 21,654 Stock compensation 290,904 Deferred lease liability 492,998 Other 13,751 Total deferred income tax assets 28,471,409 Less: Valuation allowance (27,876,694) Deferred tax assets, net 594,715 Deferred income tax liabilities: Deferred lease assets (466,679) Other (165,878) Total deferred income tax liabilities (632,557) Deferred tax, net (37,842) In assessing the realizability of the net deferred tax assets, the Company considers all relevant positive and negative evidence to determine whether it is more likely than not that some portion of the deferred income tax will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. At December 31, 2020, the Company has recorded a full valuation allowance against its net deferred tax assets of approximately $27.9 million. Prior to the acquisition of BioPharmX on May 18, 2020 the Company was treated as a partnership for the federal and state income tax purposes. As of December 31, 2020, the Company had federal net operating loss (“NOL”) carryforwards of approximately $96.4 million (including $80.4 million of NOL’s acquired from BioPharmX), available to reduce future taxable income, if any, for federal and state income tax purposes. The federal NOL will be carried forward indefinitely. The state net operating loss carryforwards will begin to expire in 2040. As of December 31, 2020, the Company has research and development credit carryforwards of approximately $1.2 million acquired from BioPharmX available to reduce future taxable income subject to expiration. Under the Internal Revenue Code (“IRC”) Section 382, annual use of the Company’s net operating loss carryforwards to offset taxable income may be limited based on cumulative changes in ownership. The Company has not completed an analysis to determine whether any such limitations have been triggered as of December 31, 2020. The Company has no income tax affect due to the recognition of a full valuation allowance on the expected tax benefits of future loss carry forwards based on uncertainty surrounding realization of such assets. On December 22, 2017, the U.S. enacted comprehensive tax legislation (the “Tax Act”). Under the Tax Act, federal NOLs generated after December 31, 2017 are carried forward indefinitely for US federal income tax purposes. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was enacted and signed into law, and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date. The CARES Act, among other things, includes changes to the tax provisions that benefits business entities and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act, including, permitting net operating losses, or NOLs, carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act provides other reliefs and stimulus measures. We have evaluated the impact of the CARES Act, and do not expect that any provision of the CARES Act would result in a material cash benefit to us or have a material impact on our financial statements or internal controls over financial reporting. The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2020 and 2019. The Company’s policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. The Company did not accrue either interest or penalties for the year ended December 31, 2020 and 2019. The Company files income tax returns in the U.S. federal jurisdiction and several states. Given that the company has incurred tax losses in most years since its inception, all of the Company’s tax years are effectively open to examination. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | Note 12. Commitments and contingencies Leases In connection with the Merger of BioPharmX, the Company acquired a lease and corresponding sublease for the BioPharmX facility in San Jose, California. The sublease is to be used for general office and research laboratory purposes, has an effective date of February 1, 2020, and has a lease term of 4 years which expires on December 30, 2023. The lease expense is significantly reduced by the payments received in connection with the sublease. The components of lease expense were as follows: Year Ended December 31, 2020 Operating leases: Operating lease cost $ 192,115 Variable lease cost 57,013 Operating lease expense $ 249,128 Lease income - sub lease (206,614) Net rent expense $ 42,514 Other information: Year Ended December 31, 2020 Operating cash flows - operating leases $ 182,441 Right-of-use assets obtained in exchange for operating lease liabilities $ 904,370 Weighted-average remaining lease term – operating leases 3.0 Weighted-average discount rate – operating leases 15.0 % As of December 31, 2020, future minimum payments for the lease are as follows: Operating Leases Year Ended December 31, 2021 $ 322,656 Year Ended December 31, 2022 332,568 Year Ended December 31, 2023 342,468 Total $ 997,692 Less present value discount (200,586) Operating lease liabilities $ 797,106 The Company had no operating leases for the period from inception through December 31, 2019. Litigation As of December 31, 2020 and 2019 there was no litigation against the Company. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related party transactions | |
Related party transactions | Note 13. Related party transactions Patagonia Patagonia is a private, family-owned company founded in 2013 to address the medical needs of people with rare and serious dermatological conditions. On February 28, 2019 and June 26, 2019, the Company acquired the TMB‑001 and TMB‑003 licenses from Patagonia (see Note 3 for the payment terms and more details), respectively. The Chief Operating Officer, Executive Vice-President and Secretary of the Company is also the President of Patagonia. On February 27, 2019, the Company issued 1,000 founder common units to Patagonia for $10. As of December 31, 2019, Patagonia held 1,000 common units which represented 10% of the total voting units outstanding. During the year ended December 31, 2020, the 1,000 common units were converted to 629,572 shares of the Company’s common stock in connection with its merger with BioPharmX (See Note 1). As of December 31, 2020, Patagonia owns 45 shares of the Company’s common stock. TardiMed The Chairman of the Board of the Company is a Managing Member of TardiMed. The Chief Operating Officer, Executive Vice President and Secretary and the Chief Financial Officer and Executive Vice President of the Company are also partners of TardiMed. As of December 31, 2020 TardiMed holds 5,437,517 shares of common stock, which represents 20% of the total voting shares outstanding. From February 26, 2019 to December 31, 2019, TardiMed contributed $1.4 million in exchange for 1.4 million preferred units. TardiMed contributed $186,493 for management fees and reimbursed expenses for the period from inception through December 31, 2019 in exchange for 186,493 preferred units. During the year ended December 31, 2020, TardiMed contributed an additional $0.1 million in exchange for 142,392 preferred units. In connection with the Merger Agreement, these preferred units and dividends have converted into 1,819 shares of Series A preferred stock. The Company reimbursed TardiMed $400,346 for management fees and reimbursed expenses for the year ended December 31, 2020. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | Note 14. Subsequent events The Company has evaluated its subsequent events from December 31, 2020 through the date these consolidated financial statements were issued and has determined that there are no subsequent events requiring disclosure in these consolidated financial statements other than the items noted below. Common Stock Effective February 4, 2021, the Company entered an employment agreement with its new Chief Medical Officer, and in connection with the employment agreement, the Company intends to grant 347,991 options to purchase shares of the Company’s common stock. Warrants All Series B Warrants have been exercised as of March 4, 2021. As of March 15, 2021, 3,476,390 of Series A warrants have been exercised as of March 15, 2021. Lease On March 10, 2021, the Company entered into a lease agreement with SIG 110 LLC with respect to a 3,127 square foot office space at 110 Allen Road, Suite 401, Basking Ridge, New Jersey. Pursuant to the lease agreement entered into on March 10, 2021, the lease expires in March 2023. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") as determined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and include all adjustments necessary for the fair presentation of its consolidated balance sheet, results of operations and cash flows for the period presented. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relate to the valuations of warrants, notes, and equity-based awards and member units. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and money market mutual funds. |
Research and Development | Research and Development Research and development costs, including in-process research and development acquired as part of an asset acquisition for which there is no alternative future use, are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. |
Accrued Outsourcing Costs | Accrued Outsourcing Costs Substantial portions of the Company’s preclinical studies and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors (collectively “CROs”). These CROs generally bill monthly or quarterly for services performed, or bill based upon milestone achievement. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. The Company outsources a substantial portion of its clinical trial activities, utilizing external entities such as CROs, independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical studies. For each clinical trial that the Company conducts, certain clinical trial costs are expensed immediately, while others are expensed over time based on the number of patients in the trial, the attrition rate at which patients leave the trial, and/or the period over which clinical investigators or CROs are expected to provide services. The Company’s estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. |
Fair Value Measurement | Fair Value Measurement The Company follows the accounting guidance in ASC 820 for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of December 31, 2020 and 2019, the recorded values of prepaid expenses, accounts payable, accrued expenses, and license payable, approximate the fair values due to the short-term nature of the instruments. |
Leases | Leases The Company accounts for its leases under the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. |
Revenue Recognition | Revenue Recognition The Company has not yet generated any revenue from product sales. The Company’s source of revenue in 2020 and 2019 has been from grants. When grant funds are received after costs have been incurred, the Company records grant revenue upon the receipt of cash. |
Warrant Liability | Warrant Liability The Company had accounted for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statements of operations. The Company issued Series A Warrants to purchase 8,384,764 shares of its common stock to investors in connection with the $20 million financing in May 2020, and recorded these outstanding warrants as a liability at fair value utilizing a Monte Carlo simulation model. As further described in Note 6, the fair value of the warrants issued by the Company in connection with the $5.0 million Bridge Notes has been estimated using a probability-weighted Black-Scholes option pricing model. Upon consummation of the Merger the Series B Warrants are classified as equity. Pursuant to the waiver agreement related to the Company’s Series A Warrants (see Note 1), on November 19, 2020, the warrant liability was reclassified to additional paid-in capital. |
Stock-Based Compensation | Stock-Based Compensation The Company expenses stock-based compensation to employees, non-employees and board members over the requisite service period based on the estimated grant-date fair value of the awards and actual forfeitures. The Company accounts for forfeitures as they occur. Stock-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. All stock-based compensation costs are recorded in general and administrative or research and development costs in the consolidated statements of operations based upon the underlying individual’s role at the Company. In 2019, the Company granted VARs to certain employees at specified exercise prices. The Company estimates the fair value of VARs using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of equity-based awards represented management’s best estimates and involve inherent uncertainties and the application of management’s judgment. All equity-based compensation costs are recorded in general and administrative or research and development costs in the statements of operations. |
Convertible Preferred Stock | Convertible Preferred Stock The Company records shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company has applied the guidance in ASC 480‑10‑S99‑3A, Securities and Exchange Commission (“SEC”) Staff Announcement: Classification and Measurement of Redeemable Securities and has therefore classified the Series A convertible preferred stock as mezzanine equity. The convertible preferred stock is recorded outside of stockholders’ deficit because, in the event of certain change of control events considered not solely within the Company’s control, such as a merger, acquisition and sale of all or substantially all of the Company’s assets, the convertible preferred stock will become redeemable at the option of the holders. |
Loss Per Share | Loss Per Share Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. To calculate the basic EPS numerator, income available to common stockholders must be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not declared) from income from continuing operations and also from net income. If there is a loss from continuing operations or a net loss, the amount of the loss shall be increased by those preferred dividends. The outstanding Series A Preferred Stock has cumulative dividends, whether or not declared. The basic and diluted net loss amounts are the same for the year ended December 31, 2020 and the period from inception through December 31, 2019, as a result of the net loss and anti-dilutive impact of the potentially dilutive securities. Potentially dilutive shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, value appreciation rights, and warrants. Potentially dilutive shares issuable upon conversion of the Series A Preferred Stock are calculated using the if-converted method. The following is a reconciliation of the numerator and denominator of the diluted net loss per share computations for the periods presented below: For the Period from February 26, 2019 Year Ended (Inception) through December 31, 2020 December 31, 2019 Basic and diluted loss per share: Net loss $ (15,117,614) $ (3,037,278) Accrued dividend on preferred stock units (52,669) (37,835) Cumulative dividends on Series A preferred stock (90,516) Net loss attributable to common stockholders $ (15,260,799) $ (3,075,113) Basic and diluted weighted average number of shares outstanding 15,699,869 6,295,724 Basic and diluted net loss per share attributable to common stockholders $ (0.97) $ (0.49) Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share for the year ended December 31, 2020 and the period from inception through December 31, 2019, because their inclusion would be anti-dilutive are as follows: December 31, 2020 2019 Series A warrants 20,178,214 — Bridge warrants 413,751 — Variable appreciation rights 367,670 429,368 Options to purchase common stock 184,456 — Series A preferred stock 1,819,389 — Legacy stock options 15,781 — Legacy warrants 219,928 — 23,199,189 429,368 |
Income taxes | Income taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more-likely than not that some or all of the deferred tax assets will not be realized. The Company also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. In accordance with this guidance, tax positions must meet a more-likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of tax position. The Company’s policy is to account for income tax related interest and penalties in income tax expense in the accompanying consolidated statements of operations. |
Recent accounting pronouncements | Recent accounting pronouncements In June 2018, the FASB issued ASU 2018‑07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted this standard effective February 2019. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU No. 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, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impact this ASU will have on its condensed consolidated financial statements and related disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies | |
Summary of reconciliation of numerator and denominator of the diluted net loss per share | For the Period from February 26, 2019 Year Ended (Inception) through December 31, 2020 December 31, 2019 Basic and diluted loss per share: Net loss $ (15,117,614) $ (3,037,278) Accrued dividend on preferred stock units (52,669) (37,835) Cumulative dividends on Series A preferred stock (90,516) Net loss attributable to common stockholders $ (15,260,799) $ (3,075,113) Basic and diluted weighted average number of shares outstanding 15,699,869 6,295,724 Basic and diluted net loss per share attributable to common stockholders $ (0.97) $ (0.49) |
Schedule of anti dilutive securities excluded in the computation of diluted loss per share | December 31, 2020 2019 Series A warrants 20,178,214 — Bridge warrants 413,751 — Variable appreciation rights 367,670 429,368 Options to purchase common stock 184,456 — Series A preferred stock 1,819,389 — Legacy stock options 15,781 — Legacy warrants 219,928 — 23,199,189 429,368 |
Acquisition of BioPharmX (Table
Acquisition of BioPharmX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition of BioPharmX | |
Schedule of total consideration | Number of shares of the combined company owned by BioPharmX stockholders 1,367,326 Multiplied by the fair value per share of BioPharmX common stock $ 6.12 Total estimated fair value of common stock 8,368,033 Add: net liabilities acquired (2,833,453) Add: investment in BioPharmX (1,169,846) Total consideration - recorded as research and development acquired $ 12,371,332 |
Schedule of total cost of the BioPharmX acquisition | Cash and cash equivalents $ 340,786 Other current assets 2,027 Deposits 114,534 ROU asset 904,370 Accounts payable (610,882) Credit cards 760 Accrued expenses (148,999) Note - short term (2,456,614) Operating lease liability - short term (259,712) Other long term liabilities (73,682) Operating lease liability - long term (646,041) Net liabilities acquired $ (2,833,453) |
Credit Agreement with BioPhar_2
Credit Agreement with BioPharmX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Agreement with BioPharmX | |
Summary of activity related to the Company's loan to BioPharmX | Investment in Loan to BioPharmX BioPharmX Total Balance as of January 1, 2020 $ — $ — $ — Principal balance 2,400,000 — 2,400,000 Accrued interest 41,655 — 41,655 Fair value of BioPharmX common stock — 625,000 625,000 Change in fair value — 559,805 559,805 Balance as of May 18, 2020 $ 2,441,655 $ 1,184,805 $ 3,626,460 Acquisition of BioPharmX (2,456,614) — (2,456,614) Loan and investment in BioPharmX - recorded as research and development license acquired 14,959 (1,184,805) (1,169,846) Balance as of December 31, 2020 $ — $ — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Schedule of changes in Level 3 liabilities measured at fair value | The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2020: Bridge Warrants Series A Warrants Total Balance at January 1, 2020 $ — $ — $ — January 28, 2020 - First closing issuance 929,899 — 929,899 February 14, 2020 - Second closing issuance 981,557 — 981,557 March 13, 2020 - Third closing issuance 1,021,262 — 1,021,262 Sub-total 2,932,718 — 2,932,718 Issuance of Series A warrants — 16,511,634 16,511,634 Change in fair value 490,486 (8,647,256) (8,156,770) Reclassification of bridge warrants to equity (3,423,204) — (3,423,204) Reclassification of Series A warrants to equity — (7,864,378) (7,864,378) Balance at December 31, 2020 $ — $ — $ — |
Bridge warrants | |
Fair Value Measurements | |
Schedule of inputs used | The inputs using the probability Black-Scholes model to calculate the fair value of the warrants related to the Bridge Notes are as follows: For the period January 28, 2020 - May 18, 2020 Dividend yield — Expected price volatility 84.9 % Risk free interest rate 0.38% - 1.48 % Expected term 5.0 - 5.3 years |
Series A Warrants | |
Fair Value Measurements | |
Schedule of inputs used | The inputs using the Monte Carlo simulation model in measuring the Company’s Series A Warrants at the issuance date of June 2, 2020 and during the year ended December 31, 2020, are as follows: Year Ended June 2, 2020 December 31, 2020 Dividend yield — — Expected price volatility 78.2 % 78.8% - 81.6 % Risk free interest rate 0.32 % 0.26% - 0.35 % Expected term (in years) 5.0 4.5 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, December 31, 2020 2019 Research and development $ 158,911 $ 128,239 Professional fees 142,599 — Personnel expenses 438,722 86,421 Other 28,429 — Total $ 768,661 $ 214,660 |
Bridge Notes Payable (Tables)
Bridge Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Bridge Notes Payable | |
Schedule of bridge notes and warrant liability activity | Bridge Notes Payable Balance at January 1, 2020 $ — January 28, 2020 - First closing issuance 1,666,666 February 14, 2020 - Second closing issuance 1,666,667 March 13, 2020 - Third closing issuance 1,666,667 Original issue discount (1,300,000) Discount resulting from allocation of proceeds to warrant liability (2,932,718) Sub-total 767,282 Amortization of debt discount 4,232,718 Reclassification of bridge note to equity (5,000,000) Balance at December 31, 2020 $ — |
Bridge Loan | |
Bridge Notes Payable | |
Schedule of inputs used | For the period January 28,2020- May 18, 2020 Dividend yield — Expected price volatility 84.9 % Risk free interest rate 0.38% - 1.48 % Expected term 5.0 - 5.3 years |
Temporary Equity, and Members_2
Temporary Equity, and Members' and Stockholder's Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' DEFICIT | |
Summary of membership units issued and paid | Units Common units 10,000 Preferred units 1,586,493 |
Series A preferred stock | |
STOCKHOLDERS' DEFICIT | |
Summary of stock option plan activity | Series A Preferred Stock Shares Amount Total temporary equity as of January 1, 2020 — $ — Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition 1,819 1,819,289 Cumulative dividends on Series A Preferred Stock — 90,516 Total temporary equity as of December 31, 2020 1,819 $ 1,909,805 |
Equity-based compensation (Tabl
Equity-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Summary of stock based compensation expense | During the year ended December 31, 2020 and the period from inception through December 31, 2019, stock-based compensation expenses were as follows: For the Period from February 26, 2019 Year Ended (Inception) through December 31, 2020 December 31, 2019 Employee value appreciation right awards $ 72,975 $ 74,567 Stock options 145,944 — $ 218,919 $ 74,567 |
Summary of VARs issued and outstanding | The following is a summary of VARs issued and outstanding as of December 31, 2020 and for the year ended December 31, 2020: Weighted Average Remaining Weighted Average Contractual Life (in Number of Units Exercise Price Total Intrinsic Value years) Outstanding as of February 26, 2019 (Inception) — $ — $ — — Issued 462,106 $ 0.01 8.9 Cancelled (24,553) $ 0.01 — Outstanding as of December 31, 2019 437,553 $ 0.01 $ 279,077 9.4 Cancelled (69,882) $ 0.01 — Outstanding as of December 31, 2020 367,671 $ 0.01 $ 269,502 8.4 Exercisable at December 31, 2020 87,511 $ 0.01 $ 64,145 8.4 |
Summary of stock options outstanding | The following is a summary of the options outstanding as of December 31, 2020: Weighted Average Remaining Shares Underlying Weighted Average Contractual Aggregate Intrinsic Options Exercise Price Term (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 232,996 $ 2.87 9.4 — Canceled (48,540) $ 2.87 — — Outstanding as of December 31, 2020 184,456 $ 2.87 9.4 $ — Exercisable at December 31, 2020 — $ 2.87 9.4 $ — |
Summary of valuation assumptions were used to calculate the estimated fair value of awards granted | The following are the key assumptions used to estimate the fair value of the stock options granted during the year ended December 31, 2020: Year Ended December 31, 2020 Expected life 5-7 years Expected volatility 79.0 % Risk-free interest rate 0.3 % Expected dividend yield — |
Stock options and warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Summary of stock options outstanding | Weighted Average Shares Underlying Remaining Options and Weighted Average Contractual Aggregate Intrinsic Warrants Exercise Price Term (Years) Value Legacy BioPharmX options - May 18, 2020 45,975 $ 65.97 1.2 $ — Canceled (30,194) $ 61.11 — $ — Legacy BioPharmX options - December 31, 2020 15,781 $ 75.27 2.3 $ — Legacy BioPharmX warrants 219,928 $ 164.09 2.7 $ — |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Schedule of components of earnings before income taxes | The components of earnings before income taxes for the year ended December 31, 2020 were as follows: Year Ended December 31, 2020 Income (loss) before income taxes: Domestic $ (14,839,605) Foreign (240,167) $ (15,079,772) |
Provision for income taxes | The components of earnings before income taxes for the year ended December 31, 2020 were as follows: Year Ended December 31, 2020 Income (loss) before income taxes: Domestic $ (14,839,605) Foreign (240,167) $ (15,079,772) The provision for income taxes for the year ended December 31, 2020 is as follows: December 31, 2020 Current US Federal $ — US State — Total current provision — Deferred US Federal — US State — Foreign 37,842 Total deferred provision 37,842 Total provision for income taxes $ 37,842 |
Schedule of reconciliation of the statutory income tax rates | A reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows: December 31, 2020 Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 5.5 % Foreign rate differential (0.1) % Non-taxable entity (6.0) % Change in FV of warrant liability 11.8 % Convertible note interest (4.6) % Other 0.2 % Change in valuation allowance (28.2) % Income taxes provision (benefit) (0.4) % |
Schedule of deferred tax assets and liabilities | The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets and liabilities consist of the following: December 31, 2020 Deferred tax assets: Net operating loss 26,359,856 Research and Development Credits 1,216,951 Fixed assets 21,998 Intangible assets 53,297 Impairment Loss 21,654 Stock compensation 290,904 Deferred lease liability 492,998 Other 13,751 Total deferred income tax assets 28,471,409 Less: Valuation allowance (27,876,694) Deferred tax assets, net 594,715 Deferred income tax liabilities: Deferred lease assets (466,679) Other (165,878) Total deferred income tax liabilities (632,557) Deferred tax, net (37,842) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies | |
Schedule of components of lease expense | Year Ended December 31, 2020 Operating leases: Operating lease cost $ 192,115 Variable lease cost 57,013 Operating lease expense $ 249,128 Lease income - sub lease (206,614) Net rent expense $ 42,514 |
Schedule of Other Information | Year Ended December 31, 2020 Operating cash flows - operating leases $ 182,441 Right-of-use assets obtained in exchange for operating lease liabilities $ 904,370 Weighted-average remaining lease term – operating leases 3.0 Weighted-average discount rate – operating leases 15.0 % |
Schedule of future minimum payments | As of December 31, 2020, future minimum payments for the lease are as follows: Operating Leases Year Ended December 31, 2021 $ 322,656 Year Ended December 31, 2022 332,568 Year Ended December 31, 2023 342,468 Total $ 997,692 Less present value discount (200,586) Operating lease liabilities $ 797,106 |
Organization and description _2
Organization and description of business operations - Merger Agreement (Details) | May 18, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Mar. 13, 2020USD ($) | Feb. 14, 2020USD ($) | Jan. 28, 2020USD ($) | Dec. 31, 2019$ / sharesshares |
Merger Agreement | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Common shares outstanding | 27,132,420 | 0 | ||||
Outstanding common stock owned | 88.50% | |||||
VARs | ||||||
Merger Agreement | ||||||
Outstanding at the ending (in shares) | 367,671 | 437,553 | ||||
Bridge Loan | ||||||
Merger Agreement | ||||||
Issuance | $ | $ 1,666,667 | $ 1,666,667 | $ 1,666,666 | |||
Original issue Discount | $ | $ 1,300,000 | |||||
Merger Agreement | ||||||
Merger Agreement | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Conversion reverse stock split ratio | 0.0833 | |||||
Common shares outstanding | 11,849,031 | |||||
Weighted Average Exercise Prices | $ / shares | $ 164.17 | |||||
Legal, consulting and other professional fees | $ | $ 1,500,000 | |||||
Merger Agreement | BioPharmX | ||||||
Merger Agreement | ||||||
Outstanding common stock owned | 88.50% | |||||
Merger conversion ratio | 220,030 | |||||
Weighted Average Exercise Prices | $ / shares | $ 45.81 | |||||
Number of rights outstanding | 97,870 | |||||
Merger Agreement | Timber Sub | ||||||
Merger Agreement | ||||||
Ownership held by stockholders | 11.50% | |||||
Common stock issued per unit | 629.57 | |||||
Common stock issued for VARs | 367,670 | |||||
Preferred units before merger | 1,819,289 | |||||
Issuance | $ | $ 2,250,000 | |||||
Merger Agreement | Timber Sub | VARs | ||||||
Merger Agreement | ||||||
Outstanding at the ending (in shares) | 584 | |||||
Merger Agreement | Timber Sub | Series A preferred stock | ||||||
Merger Agreement | ||||||
Common stock on conversion of units | 1,819 | |||||
Merger Agreement | Timber Sub | Bridge Loan | ||||||
Merger Agreement | ||||||
Original issue Discount | $ | $ 250,000 |
Organization and description _3
Organization and description of business operations - Securities Purchase Agreement (Details) - USD ($) $ / shares in Units, $ in Millions | May 18, 2020 | Dec. 31, 2020 | Jun. 02, 2020 | May 22, 2020 |
Bridge warrants | ||||
Securities Purchase Agreement | ||||
Warrants exercise price (in dollars per share) | $ 0.001 | |||
Securities Purchase Agreement | ||||
Securities Purchase Agreement | ||||
Number of shares issued upon conversion | 4,137,509 | |||
Securities Purchase Agreement | Bridge warrants | ||||
Securities Purchase Agreement | ||||
Common stock for which warrants exercised | 413,751 | |||
Securities Purchase Agreement | Series A Warrants | ||||
Securities Purchase Agreement | ||||
Percentage of right to acquire shares | 75.00% | |||
Common stock for which warrants exercised | 8,384,764 | |||
Securities Purchase Agreement | Series B Warrants | ||||
Securities Purchase Agreement | ||||
Common stock for which warrants exercised | 7,042,175 | |||
Securities Purchase Agreement | Timber Sub | ||||
Securities Purchase Agreement | ||||
Cash proceeds from issuance of common units | $ 20 | |||
Securities Purchase Agreement | Bridge Investors | Bridge warrants | ||||
Securities Purchase Agreement | ||||
Warrants exercise price (in dollars per share) | $ 2.2362 | |||
Securities Purchase Agreement | Bridge Loan | ||||
Securities Purchase Agreement | ||||
Warrants exercise price (in dollars per share) | $ 0.001 | |||
Private Placement | Securities Purchase Agreement | ||||
Securities Purchase Agreement | ||||
Aggregate purchase price | 25 | |||
Private Placement | Securities Purchase Agreement | Bridge Loan | ||||
Securities Purchase Agreement | ||||
Aggregate purchase price | $ 5 |
Organization and description _4
Organization and description of business operations - Series A Warrants, Series B Warrants, Bridge Warrants (Details) - $ / shares | 12 Months Ended | ||||
Dec. 31, 2020 | Mar. 15, 2021 | Mar. 04, 2021 | Nov. 19, 2020 | May 22, 2020 | |
Series A Warrants | |||||
Warrants | |||||
Warrants exercise price (in dollars per share) | $ 1.16 | ||||
Common stock for which warrants exercised | 20,178,214 | ||||
Percentage of market trading price to be paid for undeliverable shares | 1.50% | ||||
Series A Warrants | Subsequent events | |||||
Warrants | |||||
Warrants exercise price (in dollars per share) | $ 1.16 | ||||
Common stock for which warrants exercised | 16,701,824 | ||||
Series B Warrants | |||||
Warrants | |||||
Warrants exercise price (in dollars per share) | $ 0.001 | ||||
Common stock for which warrants exercised | 22,766,776 | ||||
Number of warrants exercised | 15,292,744 | ||||
Shares issued upon exercise of warrants | 15,284,992 | ||||
Series B Warrants | Subsequent events | |||||
Warrants | |||||
Warrants exercise price (in dollars per share) | $ 0.001 | ||||
Common stock for which warrants exercised | 22,766,776 | ||||
Bridge warrants | |||||
Warrants | |||||
Warrants exercise price (in dollars per share) | $ 2.2362 | ||||
Term of warrants | 5 years | ||||
Common stock for which warrants exercised | 413,751 | ||||
Bridge warrants | Minimum | |||||
Warrants | |||||
Percentage of exercise price on reset price | 4.99% | ||||
Bridge warrants | Maximum | |||||
Warrants | |||||
Percentage of exercise price on reset price | 9.99% |
Organization and description _5
Organization and description of business operations - Liquidity and Capital Resources (Details) - USD ($) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Organization and description of business operations | ||
Accumulated deficit | $ (3,075,113) | $ (18,245,396) |
Net loss | (3,037,278) | (15,117,614) |
Net cash used in operating activities | $ (1,022,927) | $ (8,293,313) |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ in Millions | 1 Months Ended | |
May 31, 2020 | Nov. 19, 2020 | |
Series A Warrants | ||
Class of Warrant or Right [Line Items] | ||
Common stock for which warrants exercised | 20,178,214 | |
Private Placement | Bridge Loan | ||
Class of Warrant or Right [Line Items] | ||
Aggregate purchase price | $ 5 | |
Private Placement | Series A Warrants | ||
Class of Warrant or Right [Line Items] | ||
Common stock for which warrants exercised | 8,384,764 | |
Aggregate purchase price | $ 20 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of reconciliation of the numerator and denominator of diluted net income (loss) per share (Details) - USD ($) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Basic and diluted loss per share: | ||
Net loss | $ (3,037,278) | $ (15,117,614) |
Accrued dividend on preferred stock units | (37,835) | (52,669) |
Cumulative dividends on Series A preferred stock | (90,516) | |
Net loss attributable to common stockholders | $ (3,075,113) | $ (15,260,799) |
Basic and diluted weighted average number of shares outstanding | 6,295,724 | 15,699,869 |
Basic and diluted net loss per share attributable to common stockholders | $ (0.49) | $ (0.97) |
Reconciliation of Income (Loss) Per Share | ||
Basic and diluted loss per share: | ||
Net loss | $ (3,037,278) | $ (15,117,614) |
Accrued dividend on preferred stock units | (37,835) | (52,669) |
Cumulative dividends on Series A preferred stock | (90,516) | |
Net loss attributable to common stockholders | $ (3,075,113) | $ (15,260,799) |
Basic and diluted weighted average number of shares outstanding | 6,295,724 | 15,699,869 |
Basic and diluted net loss per share attributable to common stockholders | $ (0.49) | $ (0.97) |
Significant Accounting Polici_6
Significant Accounting Policies - Anti-dilutive loss per share (Details) - Reconciliation of Income (Loss) Per Share - shares | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 429,368 | 23,199,189 |
Series A Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 20,178,214 | |
Bridge Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 413,751 | |
Variable appreciation rights | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 429,368 | 367,670 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 184,456 | |
Series A preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 1,819,389 | |
Legacy stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 15,781 | |
Legacy warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securites excluded from computation of diluted loss per share | 219,928 |
Acquisition of BioPharmX (Detai
Acquisition of BioPharmX (Details) | May 18, 2020USD ($)$ / sharesshares |
Acquisition of BioPharmX | |
Number of shares of the combined company owned by BioPharmX stockholders | shares | 1,367,326 |
Multiplied by the fair value per share of BioPharmX common stock | $ / shares | $ 6.12 |
Total estimated fair value of common stock | $ 8,368,033 |
Add: net liabilities acquired | (2,833,453) |
Add: investment in BioPharmX | (1,169,846) |
Total consideration - recorded as research and development acquired | $ 12,371,332 |
Acquisition of BioPharmX - Tota
Acquisition of BioPharmX - Total cost (Details) | May 18, 2020USD ($) |
Acquisition of BioPharmX | |
Cash and cash equivalents | $ 340,786 |
Other current assets | 2,027 |
Deposits | 114,534 |
ROU asset | 904,370 |
Accounts payable | (610,882) |
Credit cards | 760 |
Accrued expenses | (148,999) |
Note - short term | (2,456,614) |
Operating lease liability - short term | (259,712) |
Other long term liabilities | (73,682) |
Operating lease liability - long term | (646,041) |
Net liabilities acquired | $ (2,833,453) |
Acquisition of BioPharmX - Addi
Acquisition of BioPharmX - Additional information (Details) | May 18, 2020USD ($) |
Acquisition of BioPharmX | |
Investment received | $ 20,000,000 |
Percentage of voting interests acquired | 88.50% |
Percentage of interest held by BioPharmx | 11.50% |
Total consideration | $ 12,371,332 |
Credit Agreemnt with BioPharmX
Credit Agreemnt with BioPharmX (Details) | 12 Months Ended |
Dec. 31, 2020USD ($)itemshares | |
Loan to BioPharmX | |
Investments in and Advances to Affiliates [Line Items] | |
Amount advanced to BioPharmX | $ 2,500,000 |
Number of tranches in which the company loaned | item | 3 |
Interest income | $ 42,000 |
Investment in BioPharmX | |
Investments in and Advances to Affiliates [Line Items] | |
Common Stock issued on warrants exercises | shares | 193,596 |
Credit Agreement with BioPhar_3
Credit Agreement with BioPharmX - Summary of loan receivable and investment (Details) - USD ($) | 5 Months Ended | 7 Months Ended |
May 18, 2020 | Dec. 31, 2020 | |
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||
Beginning balance | $ 3,626,460 | |
Principal balance | $ 2,400,000 | |
Accrued interest | 41,655 | |
Fair value of BioPharmX common stock | 625,000 | |
Change in fair value | 559,805 | |
Acquisition of BioPharmX | (2,456,614) | |
Loan and investment in BioPharmX - recorded as research and development license acquired | (1,169,846) | |
Ending balance | 3,626,460 | |
Loan to BioPharmX | ||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||
Beginning balance | 2,441,655 | |
Principal balance | 2,400,000 | |
Accrued interest | 41,655 | |
Acquisition of BioPharmX | (2,456,614) | |
Loan and investment in BioPharmX - recorded as research and development license acquired | 14,959 | |
Ending balance | 2,441,655 | |
Investment in BioPharmX | ||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||
Beginning balance | 1,184,805 | |
Fair value of BioPharmX common stock | 625,000 | |
Change in fair value | 559,805 | |
Loan and investment in BioPharmX - recorded as research and development license acquired | $ (1,184,805) | |
Ending balance | $ 1,184,805 |
Purchases of Assets (Details)
Purchases of Assets (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Oct. 31, 2019 | Dec. 31, 2020 | |
Patagonia license agreement | TMB-001 License | |||
Finite-Lived Intangible Assets [Line Items] | |||
Upfront fee | $ 50,000 | ||
Cash milestone payments entitled | 27,000,000 | ||
Initial cash milestone payments entitled | 4,000,000 | ||
Accrued milestone payments | $ 0 | 0 | |
Patagonia license agreement | TMB-003 License | |||
Finite-Lived Intangible Assets [Line Items] | |||
Upfront fee | 20,000 | ||
Cash milestone payments entitled | 10,250,000 | ||
Initial cash milestone payments entitled | 250,000 | ||
Accrued milestone payments | 0 | 0 | |
AFT license agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Upfront fee | 750,000 | $ 250,000 | |
Cash milestone payments entitled | 25,500,000 | ||
Accrued milestone payments | $ 0 | $ 0 | |
Right to appoint members | 2 | ||
Number of committee members | 3 |
Fair Value Measurements - Input
Fair Value Measurements - Inputs using the probability black scholes models to calculate the fair value of warrants related to the bridge notes (Details) | Dec. 31, 2020 | Jun. 02, 2020 | May 18, 2020USD ($) |
Expected price volatility | |||
Fair Value Measurements | |||
Warrants | 84.9 | ||
Risk-free interest rate | Minimum | |||
Fair Value Measurements | |||
Warrants | 0.38 | ||
Risk-free interest rate | Maximum | |||
Fair Value Measurements | |||
Warrants | 1.48 | ||
Expected term | Minimum | |||
Fair Value Measurements | |||
Warrants | 5 | ||
Expected term | Maximum | |||
Fair Value Measurements | |||
Warrants | 5.3 | ||
Bridge warrants | Expected price volatility | |||
Fair Value Measurements | |||
Warrants | 84.9 | ||
Bridge warrants | Risk-free interest rate | Minimum | |||
Fair Value Measurements | |||
Warrants | 0.38 | ||
Bridge warrants | Risk-free interest rate | Maximum | |||
Fair Value Measurements | |||
Warrants | 1.48 | ||
Bridge warrants | Expected term | Minimum | |||
Fair Value Measurements | |||
Warrants | 5 | ||
Bridge warrants | Expected term | Maximum | |||
Fair Value Measurements | |||
Warrants | 5.3 | ||
Series A Warrants | Expected price volatility | |||
Fair Value Measurements | |||
Warrants | 78.2 | ||
Series A Warrants | Expected price volatility | Minimum | |||
Fair Value Measurements | |||
Warrants | 78.8 | ||
Series A Warrants | Expected price volatility | Maximum | |||
Fair Value Measurements | |||
Warrants | 81.6 | ||
Series A Warrants | Risk-free interest rate | |||
Fair Value Measurements | |||
Warrants | 0.32 | ||
Series A Warrants | Risk-free interest rate | Minimum | |||
Fair Value Measurements | |||
Warrants | 0.26 | ||
Series A Warrants | Risk-free interest rate | Maximum | |||
Fair Value Measurements | |||
Warrants | 0.35 | ||
Series A Warrants | Expected term | |||
Fair Value Measurements | |||
Warrants | 4.5 | 5 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in level 3 liabilities measured at fair value (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Mar. 14, 2020 | Mar. 13, 2020 | Feb. 14, 2020 | Jan. 28, 2020 | |
Changes in Level 3 liabilities measured at fair value | |||||
Issue of Series A warrants | $ (8,156,770) | ||||
Level 3 | |||||
Changes in Level 3 liabilities measured at fair value | |||||
Subtotal | $ 2,932,718 | $ 1,021,262 | $ 981,557 | $ 929,899 | |
Issue of Series A warrants | 16,511,634 | ||||
Change in fair value | (8,156,770) | ||||
Bridge Warrants | Level 3 | |||||
Changes in Level 3 liabilities measured at fair value | |||||
Subtotal | $ 2,932,718 | $ 1,021,262 | $ 981,557 | $ 929,899 | |
Change in fair value | 490,486 | ||||
Reclassification of bridge note to equity | (3,423,204) | ||||
Series A Warrants | Level 3 | |||||
Changes in Level 3 liabilities measured at fair value | |||||
Issue of Series A warrants | 16,511,634 | ||||
Change in fair value | (8,647,256) | ||||
Reclassification of bridge note to equity | $ (7,864,378) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional information (Details) - USD ($) | Dec. 31, 2020 | Nov. 19, 2020 | Jun. 02, 2020 | Dec. 31, 2019 |
Fair Value Measurements | ||||
Assets measured at fair value of Level 1 to Level 2 transfers | $ 0 | |||
Assets measured at fair value of Level 2 to Level 1 transfers | 0 | |||
Assets measured at fair value of Level 1 to Level 3 transfers | 0 | |||
Assets measured at fair value of Level 3 to Level 1 transfers | 0 | |||
Liabilities measured at fair value of Level 1 to Level 2 transfers | 0 | |||
Liabilities measured at fair value of Level 2 to Level 1 transfers | 0 | |||
Liabilities measured at fair value of Level 1 to Level 3 transfers | 0 | |||
Liabilities measured at fair value of Level 3 to Level 1 transfers | $ 0 | |||
Bridge warrants | ||||
Fair Value Measurements | ||||
Warrants exercise price (in dollars per share) | $ 0.001 | |||
Term of warrants | 5 years | |||
Series A Warrants | ||||
Fair Value Measurements | ||||
Warrants exercise price (in dollars per share) | $ 1.16 | $ 2.7953 | ||
Term of warrants | 5 years | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 20,178,214 | 8,384,764 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Research and development | $ 158,911 | $ 128,239 |
Professional fees | 142,599 | |
Personnel expenses | 438,722 | 86,421 |
Other | 28,429 | |
Total | $ 768,661 | $ 214,660 |
Bridge Notes Payable - Reclassi
Bridge Notes Payable - Reclassification to Equity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Mar. 13, 2020 | Feb. 14, 2020 | Jan. 28, 2020 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount | $ 4,232,718 | |||
Bridge Loan | ||||
Debt Instrument [Line Items] | ||||
Issuance | $ 1,666,667 | $ 1,666,667 | $ 1,666,666 | |
Original issue Discount | 1,300,000 | |||
Discount resulting from allocation of proceeds to warrant liability | (2,932,718) | |||
Amortization of debt discount | 4,232,718 | |||
Reclassification of bridge note to equity | (5,000,000) | |||
Warrant liability | ||||
Debt Instrument [Line Items] | ||||
Discount resulting from allocation of proceeds to warrant liability | $ 767,282 |
Bridge Notes Payable - Inputs u
Bridge Notes Payable - Inputs used to calculate the fair value of the warrants (Details) | May 18, 2020USD ($) |
Expected price volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants | 84.9 |
Risk-free interest rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants | 1.48 |
Risk-free interest rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants | 0.38 |
Expected term | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants | 5.3 |
Expected term | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants | 5 |
Bridge Notes Payable - Addition
Bridge Notes Payable - Additional information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2020 | Mar. 13, 2020 | Feb. 14, 2020 | Jan. 28, 2020 | |
Bridge Notes Payable | |||||
Change in fair value of warrant liability | $ (8,156,770) | ||||
Bridge Loan | |||||
Bridge Notes Payable | |||||
Gross amount of loan | $ 1,666,667 | $ 1,666,667 | $ 1,666,666 | ||
Original issue discount | 1,300,000 | ||||
Securities Purchase Agreement | |||||
Bridge Notes Payable | |||||
Change in fair value of warrant liability | 600,000 | ||||
Securities Purchase Agreement | Bridge Loan | |||||
Bridge Notes Payable | |||||
Original issue discount | 1,250,000 | ||||
Reimbursement of transaction costs | $ 50,000 | ||||
Proceeds from loan | $ 3,700,000 | ||||
Interest rate | 15.00% | ||||
Interest rate on occurrence of default | 25.00% | ||||
Per share price received from investors | $ 6.0423 | ||||
Shares issued to settle notes | 827,499 | ||||
Number of trading days | 5 days | ||||
Percentage of common stock converted from warrants | 100.00% | ||||
Warrants exercise price (in dollars per share) | $ 0.001 | ||||
Term of warrants | 5 years | ||||
Change in fair value of warrant liability | $ 0 | ||||
Securities Purchase Agreement | Bridge Loan | First closing | |||||
Bridge Notes Payable | |||||
Gross amount of loan | 5,000,000 | ||||
Amount of loan | $ 3,750,000 |
Temporary Equity, and Members_3
Temporary Equity, and Members' and Stockholder's Equity (Deficit) - Common Stock, Bridge Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | May 18, 2020 | Dec. 31, 2020 | May 22, 2020 | Dec. 31, 2019 |
Common Stock | ||||
Common shares outstanding | 27,132,420 | 0 | ||
Common stock issued on acquisition | 1,367,326 | |||
Private Placement | ||||
Common Stock | ||||
Shares issued to investors | 20,000,000 | |||
Aggregate net proceeds | $ 17.5 | |||
BioPharmX | ||||
Common Stock | ||||
Common shares outstanding | 1,367,326 | |||
Fair value of common stock issued on acquisition | $ 8.4 | |||
Fair value per share of common stock issued on acquisition | $ 6.12 | |||
Merger Agreement | ||||
Common Stock | ||||
Common shares outstanding | 11,849,031 | |||
Merger Agreement | Private Placement | ||||
Common Stock | ||||
Common stock issued on acquisition | 4,186,625 | |||
Patagonia | ||||
Common Stock | ||||
Common stock issued on acquisition | 1,000 | |||
Conversion of common stock issued | 629,572 | |||
TardiMed | ||||
Common Stock | ||||
Common stock issued on acquisition | 9,000 | |||
Conversion of common stock issued | 5,666,152 | |||
Bridge warrants | ||||
Common Stock | ||||
Amount of loan | $ 5 | |||
Common stock for which warrants exercised | 413,751 | |||
Warrants exercise price (in dollars per share) | $ 2.2362 | |||
Term of warrants | 5 years |
Temporary Equity, and Members_4
Temporary Equity, and Members' and Stockholder's Equity (Deficit) - Redeemable Series A Convertible Preferred Stock (Details) - USD ($) | May 18, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||
Beginning Balance | $ (1,376,218) | ||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition | (1,819,289) | ||
Ending Balance | 7,608,031 | ||
Series A preferred stock | |||
Class of Stock [Line Items] | |||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition | $ 1,819,289 | ||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition (in shares) | 1,819 | ||
Ending Balance | $ 1,909,805 | ||
Ending Balance (in shares) | 1,819 | ||
Redeemable Series A Convertible Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock designated | 2,500 | ||
Cumulative dividends percentage | 8.00% | ||
Minimum conversion price | $ 1,000 | ||
Conversion price | $ 18.054 | ||
Percentage of final price per share | 110.00% | ||
Per share of final price | $ 2.46 | ||
Accrued preferred dividends | $ 143,185 | $ 37,835 | |
Timber Sub | Series A preferred stock | |||
Class of Stock [Line Items] | |||
Beginning Balance | $ 0 | ||
Beginning Balance (in shares) | 0 | ||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition | $ 1,819,289 | ||
Conversion of preferred units to Series A preferred stock pursuant to BioPharmX acquisition (in shares) | 1,819 | ||
Cumulative dividends on Series A Preferred Stock | $ 90,516 | ||
Cumulative dividends on Series A Preferred Stock (in shares) | 0 | ||
Ending Balance | $ 1,909,805 | ||
Ending Balance (in shares) | 1,819 | ||
Timber Sub | Redeemable Series A Convertible Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred units before merger | 1,819,289 | ||
Common stock on conversion of units | 1,819 | ||
Temporary Equity, Accretion to Redemption Value | $ 1,900,000 |
Temporary Equity, and Members_5
Temporary Equity, and Members' and Stockholder's Equity (Deficit) - Membership Rights, Distributions Rights (Details) | Jul. 26, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)shares |
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | |||
Common units | 10,000 | ||
Preferred units | 1,586,493 | ||
Initial number of managers in board | $ | 3 | ||
Number of votes per manager | $ | 1 | ||
Cumulative annual return | 8.00% | ||
TardiMed | |||
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | |||
Common units | 9,000 | ||
Preferred units | 1,586,493 | ||
Number of common units outstanding | 9,000 | ||
Initial capital contributions | $ | $ 90 | ||
Preferred unit issuance value | $ | $ 2,500,000 | ||
Purchase price per share | $ / shares | $ 1 | ||
Commitment capital contributed | $ | $ 1,600,000 | ||
Number of preferred units outstanding | 1,586,493 | ||
Patagonia | |||
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | |||
Common units | 1,000 | ||
Number of common units outstanding | 1,000 | ||
Initial capital contributions | $ | $ 10 | ||
Right to appoint number of directors | $ | 1 | ||
Term for director position | 3 years |
Temporary Equity, and Members_6
Temporary Equity, and Members' and Stockholder's Equity (Deficit) - Series B Warrants (Details) - Series B Warrants | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Temporary Equity, and Members' and Stockholder's Equity (Deficit) | |
Number of warrants exercised | 15,292,744 |
Shares issued upon exercise of warrants | 15,284,992 |
Proceeds from exercise of warrants | $ | $ 6,375 |
Equity-based compensation (Deta
Equity-based compensation (Details) - USD ($) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation expense | $ 74,567 | $ 218,919 |
Employee value appreciation right awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation expense | $ 74,567 | 72,975 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation expense | $ 145,944 |
Equity-based compensation - Val
Equity-based compensation - Value Appreciation Rights (Details) - VARs - USD ($) | Jan. 06, 2020 | Feb. 25, 2019 | Dec. 31, 2019 | Dec. 31, 2020 |
Number of Units | ||||
Outstanding at the beginning (in shares) | 437,553 | |||
Issued | 462,106 | |||
Cancelled | 69,882 | (24,553) | (69,882) | |
Outstanding at the ending (in shares) | 437,553 | 367,671 | ||
Exercisable (in shares) | 87,511 | |||
Weighted Average Exercise Price | ||||
Outstanding at the beginning (in dollares per shares) | $ 0.01 | |||
Issued (in dollars per share) | $ 0.01 | |||
Cancelled (in dollares per share) | 0.01 | 0.01 | ||
Outstanding at the ending (in dollares per shares) | $ 0.01 | 0.01 | ||
Exercisable (in dollares per shares) | $ 0.01 | |||
Total Intrinsic Value | ||||
Outstanding at the beginning intrinsic value | $ 279,077 | |||
Outstanding at the ending intrinsic value | $ 279,077 | 269,502 | ||
Exercisable | $ 64,145 | |||
Weighted Average Remaining Contractual Life (in years) | ||||
Outstanding (in years) | 0 years | 9 years 4 months 24 days | 8 years 4 months 24 days | |
Issued (in years) | 8 years 10 months 24 days | |||
Exercisable (in years) | 8 years 4 months 24 days |
Equity-based compensation - Sto
Equity-based compensation - Stock Options (Details) - Stock Options - $ / shares | 12 Months Ended |
Dec. 31, 2020 | |
Shares Underlying Options | |
Outstanding at the beginning (in shares) | 0 |
Granted | 232,996 |
Canceled | (48,540) |
Outstanding at the ending (in shares) | 184,456 |
Weighted Average Exercise Price | |
Granted | $ 2.87 |
Canceled | 2.87 |
Outstanding at the ending (in dollars per share) | 2.87 |
Exercisable at December 31, 2020 | $ 2.87 |
Weighted Average Remaining Contractual Term (Years) | |
Granted (in years) | 9 years 4 months 24 days |
Outstanding at the ending (in years) | 9 years 4 months 24 days |
Exercisable at September 30, 2020 (in years) | 9 years 4 months 24 days |
Equity-based compensation - Leg
Equity-based compensation - Legacy Stock Options Warrants (Details) - Stock options and warrants - $ / shares | May 18, 2020 | Dec. 31, 2020 | Dec. 31, 2020 |
Shares Underlying Options | |||
Canceled | (30,194) | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Prices, Canceled | $ 61.11 | ||
Legacy BioPharmXOptions | |||
Shares Underlying Options | |||
Shares Underlying Options and Warrants | 45,975 | 15,781 | 15,781 |
Weighted Average Exercise Price | |||
Weighted Average Exercise Prices | $ 65.97 | $ 75.27 | $ 75.27 |
Weighted Average Remaining Contractual Term (Years) | |||
Weighted Average Remaining Contractual Life (in Years) | 1 year 2 months 12 days | 2 years 3 months 18 days | |
Legacy BioPharmXWarrants | |||
Shares Underlying Options | |||
Shares Underlying Options and Warrants | 219,928 | 219,928 | |
Weighted Average Exercise Price | |||
Weighted Average Exercise Prices | $ 164.09 | $ 164.09 | |
Weighted Average Remaining Contractual Term (Years) | |||
Weighted Average Remaining Contractual Life (in Years) | 2 years 8 months 12 days |
Equity-based compensation - Key
Equity-based compensation - Key Assumptions (Details) - Stock Options | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 79.00% |
Risk-free interest rate | 0.30% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life | 5 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life | 7 years |
Equity-based compensation - Add
Equity-based compensation - Additional information (Details) | May 18, 2020shares | Jan. 06, 2020shares | Dec. 31, 2019shares | Dec. 31, 2020USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of employees voluntary terminated | $ | 2 | |||
2020 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance | 970,833 | |||
Vesting period | 3 years | |||
Expiration term | 10 years | |||
Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum aggregate Units that may be subject to awards and issued under the Plan | 1,111 | |||
Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Incentive units outstanding | 437,553 | 367,671 | ||
Incentive Units | 2019 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum aggregate Units that may be subject to awards and issued under the Plan | 699,454 | |||
Incentive Units | Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Incentive units outstanding | 695 | |||
VARs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Incentive units outstanding | 437,553 | 367,671 | ||
Cancelled (in shares) | 69,882 | (24,553) | (69,882) | |
Reversal of compensation cost | $ | $ 8,000 | |||
Unrecognized compensation cost | $ | $ 100,000 | |||
Estimated weighted-average amortization period | 1 year 1 month 6 days | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Canceled | 48,540 | |||
Reversal of compensation cost | $ | $ 18,000 | |||
Unrecognized compensation cost | $ | $ 200,000 | |||
Estimated weighted-average amortization period | 1 year 1 month 6 days | |||
Options outstanding | 0 | 184,456 | ||
Number of options granted | 232,996 |
Income Taxes - Summary of compo
Income Taxes - Summary of components of earnings before income taxes (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income (loss) before income taxes: | |
Domestic | $ (14,839,605) |
Foreign | (240,167) |
Total | $ (15,079,772) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Current | |
US Federal | $ 0 |
US State | 0 |
Total current provision | 0 |
Deferred | |
US Federal | 0 |
US State | 0 |
Foreign | 37,842 |
Total deferred provision | 37,842 |
Total provision for income taxes | $ 37,842 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Income Tax Rates (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Statutory federal income tax rate | 21.00% |
State taxes, net of federal tax benefit | 5.50% |
Foreign rate differential | (0.10%) |
Non-taxable entity | (6.00%) |
Change in FV of warrant liability | 11.80% |
Convertible note interest | (4.60%) |
Other | 0.20% |
Change in valuation allowance | (28.20%) |
Income taxes provision (benefit) | (0.40%) |
Income Taxes - Temporary Differ
Income Taxes - Temporary Differences and Carry Fowards of Deferred Tax Assets and Liabilities (Details) | Dec. 31, 2020USD ($) |
Deferred tax assets: | |
Net operating loss | $ 26,359,856 |
Research and Development Credits | 1,216,951 |
Fixed assets | 21,998 |
Intangible assets | 53,297 |
Impairment Loss | 21,654 |
Stock compensation | 290,904 |
Deferred lease liability | 492,998 |
Other | 13,751 |
Total deferred income tax assets | 28,471,409 |
Valuation allowance | (27,876,694) |
Deferred tax assets, net | 594,715 |
Deferred income tax liabilities: | |
Deferred lease assets | (466,679) |
Other | (165,878) |
Total deferred income tax liabilities | (632,557) |
Deferred tax, net | $ (37,842) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets valuation allowance | $ 27,876,694 | |
Deferred tax assets research and development | $ 1,216,951 | |
Net Operating Loss Carryforwards Percentage | 100.00% | |
Income tax penalties interest accrued | $ 0 | $ 0 |
BioPharmX | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 80,400,000 | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 96,400,000 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2040 |
Commitments and contingencies_2
Commitments and contingencies (Details) - USD ($) | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2019 | Feb. 28, 2019 | |
Commitments and contingencies | ||||
Lease term | 4 years | |||
Operating leases: | ||||
Operating lease cost | $ 192,115 | |||
Variable lease cost | 57,013 | |||
Operating lease expense | 249,128 | |||
Lease income - sub lease | (206,614) | |||
Net rent expense | 42,514 | |||
Estimated claim liability | $ 0 | 0 | $ 0 | $ 0 |
Operating cash flows - operating leases | $ 0 | 182,441 | ||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 904,370 | |||
Weighted-average remaining lease term - operating leases | 3 years | |||
Weighted-average discount rate - operating leases | 15.00% |
Commitments and contingencies -
Commitments and contingencies - Future minimum payments (Details) - USD ($) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
OperatingLeaseLiabilitiesPaymentsDueAbstract | ||
Year Ended December 31, 2021 | $ 322,656 | |
Year Ended December 31, 2022 | 332,568 | |
Year Ended December 31, 2023 | 342,468 | |
Total | 997,692 | |
Less present value discount | (200,586) | |
Operating lease liabilities | 797,106 | |
Operating Lease, Payments | $ 0 | $ 182,441 |
Related party transactions (Det
Related party transactions (Details) - USD ($) | Feb. 27, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Related party transactions | ||||
Number of founder common units issued | 10 | |||
Patagonia | ||||
Related party transactions | ||||
Number of common shares on conversion of units | 629,572 | |||
Percentage in total voting shares outstanding | 10.00% | 10.00% | ||
Founder common units contribution | $ 1,000 | $ 1,000 | $ 1,000 | |
Number of founder common units issued | 45 | |||
TardiMed | ||||
Related party transactions | ||||
Number of common shares on conversion of units | 5,437,517 | |||
Percentage in total voting shares outstanding | 20.00% | |||
Founder common units contribution | $ 1,400,000 | $ 100,000 | ||
Number of founder common units issued | 1,400,000 | 142,392 | ||
Number of common shares on conversion of preferred units and dividends | 1,819 | |||
Management fees | $ 186,493 | $ 400,346 | ||
Reimbursed expenses | $ 186,493 | $ 400,346 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent events | Mar. 15, 2021shares | Mar. 10, 2021ft² | Feb. 04, 2021shares |
SUBSEQUENT EVENTS | |||
Land Subject to Ground Leases | ft² | 3,127 | ||
Lease Expiration Date | Mar. 31, 2023 | ||
Series A Warrants | |||
SUBSEQUENT EVENTS | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 3,476,390 | ||
Common Stock | |||
SUBSEQUENT EVENTS | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 347,991 |