Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 18, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | ADIAL PHARMACEUTICALS, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 1,217,981 | |
Amendment Flag | false | |
Entity Central Index Key | 0001513525 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38323 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3074668 | |
Entity Address, Address Line One | 1180 Seminole Trail | |
Entity Address, Address Line Two | Suite 495 | |
Entity Address, City or Town | Charlottesville | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22901 | |
City Area Code | (434) | |
Local Phone Number | 422-9800 | |
Entity Interactive Data Current | Yes | |
Common stock | ||
Document Information Line Items | ||
Trading Symbol | ADIL | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Warrants | ||
Document Information Line Items | ||
Trading Symbol | ADILW | |
Title of 12(b) Security | Warrants | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 1,218,206 | $ 4,001,794 |
Purnovate sale payments receivable | 737,276 | |
Prepaid expenses and other current assets | 91,369 | 349,441 |
Current assets of discontinued operations | 428,700 | |
Total Current Assets | 2,046,851 | 4,779,935 |
Intangible assets, net | 4,195 | 4,477 |
Equity method investment | 1,727,897 | |
Assets of discontinued operations | 948,392 | |
Total Assets | 3,778,943 | 5,732,804 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable | 111,702 | 276,410 |
Accrued expenses | 324,411 | 963,327 |
Accrued expenses, related party | 20,000 | 175,000 |
Other current liabilities | 5,639 | 10,387 |
Current liabilities of discontinued operations | 365,742 | |
Total Current Liabilities | 461,752 | 1,790,866 |
Deferred tax liability | 1,690 | |
Long-term liabilities of discontinued operations | 663,754 | |
Total Liabilities | 461,752 | 2,456,310 |
Commitments and contingencies – see Note 10 | ||
Stockholders’ Equity | ||
Preferred Stock, 5,000,000 shares authorized with a par value of $0.001 per share, 0 shares outstanding at June 30, 2023 and December 31, 2022 | ||
Common Stock, 50,000,000 shares authorized with a par value of $0.001 per share, 1,197,630 and 1,067,491 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 1,198 | 1,067 |
Additional paid in capital | 68,808,556 | 66,949,958 |
Accumulated deficit | (65,492,563) | (63,674,531) |
Total Stockholders’ Equity | 3,317,191 | 3,276,494 |
Total Liabilities and Stockholders’ Equity | $ 3,778,943 | $ 5,732,804 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 1,197,630 | 1,067,491 |
Common Stock, shares outstanding | 1,197,630 | 1,067,491 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Research and development expenses | $ 429,896 | $ 679,966 | $ 795,512 | $ 722,394 |
General and administrative expenses | 1,047,499 | 2,563,844 | 2,950,658 | 4,984,963 |
Total Operating Expenses | 1,477,395 | 3,243,810 | 3,746,170 | 5,707,357 |
Loss From Operations | (1,477,395) | (3,243,810) | (3,746,170) | (5,707,357) |
Interest income | 19,426 | 6,930 | 48,318 | 12,045 |
Other expenses | (51,901) | (51,901) | ||
Total other income (expense) | (32,475) | 6,930 | (3,583) | 12,045 |
Income (Loss) Before Provision For Income Taxes | (1,509,870) | (3,236,880) | (3,749,753) | (5,695,312) |
Provision for income taxes | ||||
Loss from Continuing Operations | (1,509,870) | (3,236,880) | (3,749,753) | (5,695,312) |
Income (loss) from discontinued operations, net taxes | 2,597,674 | (610,652) | 1,931,721 | (1,060,059) |
Net Income (Loss) | $ 1,087,804 | $ (3,847,532) | $ (1,818,032) | $ (6,755,371) |
Loss per share from continuing operations, basic (in Dollars per share) | $ (1.33) | $ (3.33) | $ (3.42) | $ (6.1) |
Income per share from discontinued operations, basic and diluted (in Dollars per share) | 2.3 | (0.63) | 1.76 | (1.14) |
Net income (loss) per share, basic and diluted (in Dollars per share) | $ 0.96 | $ (3.96) | $ (1.66) | $ (7.24) |
Weighted average shares, diluted (in Shares) | 1,131,436 | 972,641 | 1,095,190 | 933,226 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net income (loss) per share, basic and diluted | $ 0.96 | $ (3.96) | $ (1.66) | $ (7.24) |
Weighted average shares, diluted | 1,131,436 | 972,641 | 1,095,190 | 933,226 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 838 | $ 54,450,088 | $ (50,943,115) | $ 3,507,811 |
Balance (in Shares) at Dec. 31, 2021 | 837,868 | |||
Equity-based compensation – stock option expense | 567,189 | 567,189 | ||
Equity-based compensation – stock issuances to consultants and employees | $ 18 | 416,405 | 416,423 | |
Equity-based compensation – stock issuances to consultants and employees (in Shares) | 18,000 | |||
Sale of common stock and warrants, net of transaction costs | $ 93 | 9,123,648 | 9,123,741 | |
Sale of common stock and warrants, net of transaction costs (in Shares) | 92,890 | |||
Net income (loss) | (2,907,839) | (2,907,839) | ||
Balance at Mar. 31, 2022 | $ 949 | 64,557,330 | (53,850,954) | 10,707,325 |
Balance (in Shares) at Mar. 31, 2022 | 948,758 | |||
Balance at Dec. 31, 2021 | $ 838 | 54,450,088 | (50,943,115) | 3,507,811 |
Balance (in Shares) at Dec. 31, 2021 | 837,868 | |||
Net income (loss) | (6,755,371) | |||
Balance at Jun. 30, 2022 | $ 1,034 | 65,658,832 | (57,698,486) | 7,961,380 |
Balance (in Shares) at Jun. 30, 2022 | 1,034,158 | |||
Balance at Mar. 31, 2022 | $ 949 | 64,557,330 | (53,850,954) | 10,707,325 |
Balance (in Shares) at Mar. 31, 2022 | 948,758 | |||
Equity-based compensation – stock option expense | 625,816 | 625,816 | ||
Equity-based compensation – stock issuances to consultants and employees | $ 11 | 473,895 | 473,906 | |
Equity-based compensation – stock issuances to consultants and employees (in Shares) | 10,800 | |||
Warrant Exercise | $ 74 | 1,791 | 1,865 | |
Warrant Exercise (in Shares) | 74,600 | |||
Net income (loss) | (3,847,532) | (3,847,532) | ||
Balance at Jun. 30, 2022 | $ 1,034 | 65,658,832 | (57,698,486) | 7,961,380 |
Balance (in Shares) at Jun. 30, 2022 | 1,034,158 | |||
Balance at Dec. 31, 2022 | $ 1,067 | 66,949,958 | (63,674,531) | 3,276,494 |
Balance (in Shares) at Dec. 31, 2022 | 1,067,491 | |||
Equity-based compensation – stock option expense | 397,442 | 397,442 | ||
Equity-based compensation – stock issuances to consultants and employees | 62,135 | 62,135 | ||
Sale of common stock, net of transaction costs | $ 73 | 609,540 | 609,613 | |
Sale of common stock, net of transaction costs (in Shares) | 73,144 | |||
Net income (loss) | (2,905,836) | (2,905,836) | ||
Balance at Mar. 31, 2023 | $ 1,140 | 68,019,075 | (66,580,367) | 1,439,848 |
Balance (in Shares) at Mar. 31, 2023 | 1,140,635 | |||
Balance at Dec. 31, 2022 | $ 1,067 | 66,949,958 | (63,674,531) | 3,276,494 |
Balance (in Shares) at Dec. 31, 2022 | 1,067,491 | |||
Net income (loss) | (1,818,032) | |||
Balance at Jun. 30, 2023 | $ 1,198 | 68,808,556 | (65,492,563) | 3,317,191 |
Balance (in Shares) at Jun. 30, 2023 | 1,197,630 | |||
Balance at Mar. 31, 2023 | $ 1,140 | 68,019,075 | (66,580,367) | 1,439,848 |
Balance (in Shares) at Mar. 31, 2023 | 1,140,635 | |||
Equity-based compensation – stock option expense | 310,263 | 310,263 | ||
Equity-based compensation – stock issuances to consultants and employees | $ 49 | 427,268 | 427,317 | |
Equity-based compensation – stock issuances to consultants and employees (in Shares) | 48,580 | |||
Issuance of commitment shares | $ 8 | 51,893 | 51,901 | |
Issuance of commitment shares (in Shares) | 7,983 | |||
Warrant Exercise | $ 1 | 57 | 58 | |
Warrant Exercise (in Shares) | 432 | |||
Net income (loss) | 1,087,804 | 1,087,804 | ||
Balance at Jun. 30, 2023 | $ 1,198 | $ 68,808,556 | $ (65,492,563) | $ 3,317,191 |
Balance (in Shares) at Jun. 30, 2023 | 1,197,630 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Loss from operations | $ (3,749,753) | $ (5,695,312) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Equity-based compensation | 1,197,157 | 2,083,333 |
Issuance of commitment shares | 51,901 | |
Depreciation of fixed assets | 282 | 282 |
Change in value of deferred tax liability | (1,690) | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 258,072 | 195,447 |
Accrued expenses | (638,916) | (1,457,077) |
Accrued expenses, related party | (155,000) | 175,000 |
Accounts payable | (169,456) | (15,229) |
Net cash used in continuing operating activities – continuing operations | (3,207,403) | (4,713,556) |
Net cash used in discontinued operations | (985,856) | (1,317,588) |
Net cash used in operating activities | (4,193,259) | (6,031,144) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase consideration received for sale of assets | 800,000 | |
Net cash used in investing activities – continuing operations | 800,000 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from sale of common stock | 609,613 | 9,123,741 |
Proceeds from warrant exercise | 58 | 1,865 |
Net cash provided by financing activities – continuing operations | 609,671 | 9,125,606 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2,783,588) | 3,094,462 |
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD | 4,001,794 | 6,062,173 |
CASH AND CASH EQUIVALENTS-END OF PERIOD | 1,218,206 | 9,156,635 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | ||
Income taxes paid | ||
Equity consideration received for sale of Purnovate | 1,727,897 | |
Reimbursement receivable in connection with sale of Purnovate | $ 737,276 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2023 | |
Description of Business [Abstract] | |
DESCRIPTION OF BUSINESS | 1 — DESCRIPTION OF BUSINESS Adial Pharmaceuticals, Inc. (“Adial”) was converted from a limited liability company formed on November 23, 2010 under the name Adial Pharmaceuticals, LLC in the Commonwealth of Virginia to a corporation and reincorporated in Delaware on October 1, 2017. Adial is presently engaged in the development of medications for the treatment or prevention of addictions and related disorders. Adial’s wholly owned subsidiary, Purnovate, Inc. (“Purnovate”), was acquired on January 26, 2021, having been formed as Purnovate, LLC in December of 2019. Purnovate was a drug development company with a platform focused on developing drug candidates for non-opioid pain reduction and other diseases and disorders potentially targeted with adenosine analogs that are selective, potent, stable, and soluble. On May 8, 2023, Adovate, LLC (“Adovate”), a Virginia limited liability company and related party sent a letter exercising its option effective May 16, 2023 for the purchase of the assets and business of the Company’s wholly owned subsidiary, Purnovate, Inc. and made payment of the $450,000 in fees due on exercise. On June 30, 2023, Adovate issued to us the equity due under the option exercise and we executed documents confirming the transfer of Purnovate’s business as described above, completing the sale. See Note 4 for additional information. In July of 2022, the Company released data from its ONWARD™ Phase 3 pivotal trial of its lead compound AD04 (“AD04”) for the treatment of Alcohol Use Disorder. Both the U.S. Food and Drug Administration (“FDA”) and the European Medicines Authority (“EMA”) have indicated they will accept heavy-drinking-based endpoints as a basis for approval for the treatment of Alcohol Use Disorder rather than the previously required abstinence-based endpoints. The Company has held meetings with the FDA and national medicines authorities in Europe to determine the path toward approval of AD04. Key patents have been issued in the United States, the European Union, and other jurisdictions for which the Company has exclusive license rights. The active ingredient in AD04 is ondansetron, a serotonin-3 antagonist. Due to its mechanism of action, AD04 has the potential to be used for the treatment of other addictive disorders, such as Opioid Use Disorder, obesity, smoking, and other drug addictions. |
Going Concern and Other Uncerta
Going Concern and Other Uncertainties | 6 Months Ended |
Jun. 30, 2023 | |
Going Concern and Other Uncertainties [Abstract] | |
GOING CONCERN AND OTHER UNCERTAINTIES | 2 — GOING CONCERN AND OTHER UNCERTAINTIES These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. The Company is in a development stage and has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception. Based on the current development plans for AD04 in both the U.S. and international markets and other operating requirements, the Company does not believe that the existing cash and cash equivalents are sufficient to fund operations for the next twelve months following the filing of these consolidated financial statements. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company has held meetings with the FDA and various European national authorities to discuss, based on the announced results of its ONWARD Phase 3 trial, the appropriate next steps towards the expeditious development of AD04 and to seek product approval. In January 2023, the Company entered into a 120 day exclusive option agreement for the sale of the Purnovate assets and related liabilities. On May 16, this option was exercised for a fee of $450,000. On June 30, 2023, $350,000 in funds for the reimbursement of previously incurred Purnovate project costs were paid to the Company by the buyer of Purnovate, and an approximately $740,000 in additional reimbursements are expected. However, even with the receipt of the exercise fee and estimated completed expense reimbursement, the Company will not have sufficient cash on hand to fund its operations for the twelve months following the filing of these financial statements and will require additional capital to fund its operations. There is no certainty that the Company will be able to access additional capital on acceptable terms, if at all, with or without the option having been exercised. If unable to access sufficient capital, the Company would be required to delay, scale back or eliminate some or all of its research and development programs or delay its approach to regulators concerning AD04, which would likely have a material adverse effect on the Company and its financial statements. The Company’s continued operations will depend on its ability to raise additional capital through various sources, such as equity and/or debt financings, grant funding, strategic relationships, or out-licensing in order to complete its subsequent clinical trial requirements for AD04. Management is actively pursuing financing and other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all. Without additional funding, the Company would be required to delay, scale back or eliminate some or all of its research and development programs, which would likely have a material adverse effect on the Company and its financial statements. Other Uncertainties Generally, the industry in which the Company operates subjects the Company to a number of other risks and uncertainties that can affect its operating results and financial condition. Such factors include, but are not limited to: the timing, costs and results of clinical trials and other development activities versus expectations; the ability to obtain regulatory approval to market product candidates; the ability to manufacture products successfully; competition from products sold or being developed by other companies; the price of, and demand for, Company products once approved; the ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products. With the results of the ONWARD trial having been released and regulatory approaches underway, the risk of delays to the Company’s development programs from COVID-19 are reduced. However, the ongoing effects of the ongoing coronavirus pandemic, such as supply chain disruptions and post-stimulus inflation, may increase non-trial costs such as insurance premiums, increase the demand for and cost of capital, increase loss of work time from key personnel, and negatively impact our other key vendors and suppliers. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principals of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. The interim operating results are not necessarily indicative of results that may be expected for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2022, included in the 2022 Form 10-K. The unaudited condensed consolidated financial statements represent the consolidation of the Company and its subsidiary in conformity with GAAP. All intercompany transactions have been eliminated in consolidation. Reverse Stock Split On August 4, 2023, the Company effected a reverse stock split of its outstanding shares of common stock, trading on Nasdaq under the symbol ADIL, at a ratio of 1-for-25. As a result of the reverse split, the Company had 1,197,630 shares of common stock outstanding immediately after effecting the reverse split. The shares authorized for issue under the Company’s charter remained 50,000,000 common stock. All references to common stock, stock warrants to purchase common stock, stock options to purchase common stock, share data, per share data and related information contained in these condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Use of Estimates The preparation of unaudited condensed 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 liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of the equity method investment, the valuation of stock-based compensation, accruals associated with third party providers supporting clinical trials and pre-clinical activities, estimated fair values of long-lived assets used to assess the value of intangible assets, acquired in-process research and development (“IPR&D”), and goodwill, measurement of contingent liabilities, and income tax asset realization. Basic and Diluted Loss per Share Basic and diluted loss per share are computed based on the weighted-average outstanding shares of common stock, which are all voting shares. Diluted net loss per share is computed giving effect to all proportional shares of common stock, including stock options and warrants to the extent dilutive. Basic and diluted net income and loss per share for the three and six months ended June 30, 2023 and 2022, were consistent, as the inclusion of all potential common shares outstanding would have an anti-dilutive effect Loss per share from continuing operations for all periods presented. The total potentially dilutive common shares that were excluded for the three and six month periods ended June 30, 2023 and 2022 were as follows: Potentially Dilutive 2023 2022 Warrants to purchase common shares 491,151 483,834 Common Shares issuable on exercise of options 208,902 167,279 Unvested restricted stock awards 33,333 8,611 Total potentially dilutive Common Shares excluded 733,386 659,724 Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At times, the Company’s cash balances may exceed the current insured amounts under the Federal Deposit Insurance Corporation. At June 30, 2023, the Company exceeded FDIC insurance limits by approximately $137,000 and held approximately $812,000 in non-FDIC insured cash equivalent accounts. Included in cash equivalents are money market investments with maturity dates less than ninety days when purchased and are carried at fair value. Unrealized gain or loss are included in the interest income and are immaterial to the financial statements. At December 31, 2022, the Company did not exceed FDIC insurance limits but held approximately $3.8 million in non-FDIC insured cash equivalent investments. Equity Method Investments The Company utilizes the equity method to account for investments when it possesses the ability to exercise significant influence, but not control, over the operating and financial decisions of the investee. Equity method investments are measured at cost minus impairment, if any, plus or minus the Company’s proportionate share of the equity method investee’s income or loss. The proportionate share of the income or loss from equity method investments is recognized on a lag. Currently the Company is not obligated to make additional capital contributions for its equity method investments, and therefore only records losses up to the amount of its total investment, inclusive of other investments in and loans to the investee, which are not accounted for as equity method investments. Fair Value Measurements FASB ASC 820, Fair Value Measurement, (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: ● Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). ● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). ● Level 3 inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). The fair value of cash and cash equivalents and accounts payable approximate their carrying value due to their short-term maturities. Financial instruments not recorded at fair value on a recurring basis include an equity method investment that has not be remeasured or impaired in the current period. Recent Accounting Pronouncements The FASB has recently issued various updates, most of which represented technical corrections to the accounting literature or application to specific industries. Management does not expect these updates to a have a material impact on the Company’s financial position, results of operations or cash flows. |
Sale of Purnovate
Sale of Purnovate | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations [Abstract] | |
SALE OF PURNOVATE | 4 — SALE OF PURNOVATE On May 8, 2023, Adovate sent a letter exercising its option effective May 16, 2023 for the purchase of the assets and business of the Company’s wholly owned subsidiary, Purnovate, Inc. and made payment of the $450,000 in fees due on exercise. On June 30, 2023, Adovate issued to us the equity due under the option exercise and we executed documents confirming the transfer of Purnovate’s business as described above, completing the sale. The CEO, founder, and a major equity holder of Adovate is a current director and the former CEO of the Company. Under the terms of the option agreement, on option exercise Adovate became liable for reimbursement of all Purnovate operating expenses incurred and paid after December 1, 2022, such reimbursement to be paid within thirty days of execution of the final acquisition agreement with the Company holding a security interest in the assets of Adovate until the expense reimbursement is paid in full. The Company estimated that, at option exercise, the total reimbursement due was approximately $1,090,000. On June 30, 2023, Adovate made a prepayment of $350,000 against the total reimbursement due, leaving approximately $740,000 in estimated reimbursements due. The Company expects the reimbursements due to be paid according to the option agreement in the third quarter of 2023. On June 30, 2023, Adovate issued to the Company a 19.9% equity stake in Adovate as part of consideration owed, which the Company valued at $1,727,897 (see Note 6). Consideration paid by Adovate also included contingent payments based on the occurrence of certain milestone events and a contingent royalty on future sales. No value has been imputed to these contingent payments on the Company’s balance sheet, since it is at present less likely than not that such payments will ever be made. Total consideration paid or receivable was $3,265,173. The assets, liabilities, and results of operations of Purnovate, Inc. have been classified as discontinued for purposes of these financial statements and have been retroactively reclassified for past periods. The gain of sale of Purnovate has been classified as income from discontinued operation. The table below summarizes the sale: Consideration: Cash, including upfronts exercise payments and expense reimbursements prepaid $ 800,000 Fair value of shares received 1,727,897 Expense reimbursements receivable 737,276 Total consideration 3,265,173 Assets sold: Fixed assets, net of depreciation 48,492 In process R&D 455,000 Goodwill 248,971 Operating lease right-of-use asset 180,229 Deposits and prepaid expenses on assumed contracts 428,700 Total assets sold 1,361,392 Liabilities transferred: Contingent liability 506,000 Lease liability 193,796 Payables and accrued liabilities 58,497 Liabilities transferred 758,293 Net assets sold 603,099 Gain on sale 2,662,074 |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations [Abstract] | |
DISCONTINUED OPERATIONS | 5 — DISCONTINUED OPERATIONS The business of the Company’s wholly owned subsidiary, Purnovate, Inc., was sold in the three months ended June 30, 2023 (see Note 4.). As a result, all the assets and liabilities and the operating results of Purnovate, Inc. have been classified as discontinued operations. Assets and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 are as follows; June 30, December 31, ASSETS Current Assets: Cash and cash equivalents $ — $ — Prepaid research and development — 428,700 Total Current Assets — 428,700 Fixed Assets, net — 50,424 Acquired in-process research and development — 455,000 Right-to-use Asset — 193,997 Goodwill — 248,971 Total Assets $ — $ 1,377,092 LIABILITIES Current Liabilities: Accounts payable $ — $ 117,424 Accrued expenses — 191,490 Lease liability, current — 56,828 Total Current Liabilities — 365,742 Long-term Liabilities: Contingent liabilities — 492,000 Lease liability, non-current — 150,547 Deferred tax liability — 21,207 Total Liabilities $ — $ 1,029,496 Income from discontinued operations, net of tax for the three and six month periods ended June 30, 2023 and 2022 are as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 Operating Expenses: Research and development expenses $ (50,071 ) $ 520,161 $ 260,748 $ 1,074,074 General and administrative expenses 114,297 66,491 455,431 107,985 Total Operating Expenses 64,226 586,652 716,179 1,182,059 Loss From Operations (64,226 ) (586,652 ) (716,179 ) (1,182,059 ) Other Income (Expense) Interest income (expense) (174 ) — (174 ) — Change in value of contingent liability — (24,000 ) (14,000 ) 122,000 Gain on sale 2,662,074 — 2,662,074 — Total other income (expense) 2,661,900 (24,000 ) 2,647,900 122,000 Income (loss) before provision for income taxes 2,597,674 (610,652 ) 1,931,721 (1,060,059 ) Provision for income taxes — — — — Gain (loss) from discontinued operations, net of tax $ 2,597,674 $ (610,652 ) $ 1,931,721 $ (1,060,059 ) |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments [Abstract] | |
EQUITY METHOD INVESTMENTS | 6 — EQUITY METHOD INVESTMENTS On June 30, 2023, Adovate, issued to the Company a 19.9% equity stake in Adovate as part of consideration owed upon the exercise of Adovate’s option to purchase the business and assets of the Company’s wholly owned subsidiary, Purnovate, Inc. (See Note 4.) Under the terms of the option agreement, Adovate is obligated to protect the Company against dilution by issuing additional equity to the Company in Adovate as Adovate equity is sold to maintain the Company’s 19.9% equity stake until such time as Adovate has raised $4 million through equity sales. The Company determined the fair value of this equity to be $1,727,897 at time of issue, based on the price of cash sales by Adovate of the same class of equity to third parties around the same time as the date of issue. In accordance with ASC 810, the Company determined that Adovate does not qualify as a variable interest entity, nor does the Company have a controlling financial interest in Adovate. The Company has influence over, but does not control, Adovate through its equity interest in Adovate. The Company has determined that the equity it owns is in-substance common stock. The Company is not the primary beneficiary as it does not have the power to direct the activities of Adovate that most significantly impact Adovate’s economic performance. Accordingly, the Company does not consolidate the financial statements of Adovate with those of the Company. The Company recorded the initial investment in Adovate of $1,727,897 in “Equity method investments” on its condensed consolidated balance sheet. Due to the timing and availability of Adovate’s financial information, the Company is recording its proportionate share of losses from Adovate on a one quarter lag basis and therefore, did not recognize any proportionate share of Adovate results of operations during the three and six months ended June 30, 2023. Adovate, which began substantial operations in May, 2023 and is a recently formed entity. The balance sheet information of Adovate as of June 30, 2023 is not available at the date of these statements. Adovate, as of June 30, 2023, had received $2.025 million in contributed capital. The Company is not aware of any material events or transactions relating to Adovate as of June 30, 2023 that would warrant impairment of the Company’s investment or additional disclosure or recognition in the Company’s condensed consolidated financial statements. Activity recorded for the Company’s equity method investment in Adovate in the six months ended June 30, 2023 is summarized in the following table: Equity investment carrying amount at January 1, 2023 $ — Fair value of equity method investment at issue 1,727,897 Equity investment carrying amount at June 30, 2023 $ 1,727,897 At June 30, 2023, the Company’s maximum exposure to loss is limited to the Company’s equity investment in Adovate and its reimbursement receivable of $737,276. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Accrued Expenses [Abstract] | |
ACCRUED EXPENSES | 7 — ACCRUED EXPENSES Accrued expenses consist of the following: June 30, December 31, Clinical research organization services and expenses $ — $ 123,386 Employee compensation 276,705 761,509 Legal and consulting services 41,890 72,616 Pre-clinical and manufacturing expenses 5,816 5,816 Total accrued expenses $ 324,411 $ 963,327 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8 — RELATED PARTY TRANSACTIONS In January 2011, the Company entered into an exclusive, worldwide license agreement with The University of Virginia Patent Foundation d/b/a the University of Virginia Licensing and Ventures Group (the “UVA LVG”) for rights to make, use or sell licensed products in the United States based upon patents and patent applications made and held by UVA LVG (the “UVA LVG License”). The Company is required to pay compensation to the UVA LVG, as described Note 10. A certain percentage of these payments by the Company to the UVA LVG may then be distributed to the Company’s former Chairman of the Board who currently serves as the Company’s Chief Medical Officer in his capacity as inventor of the patents by the UVA LVG in accordance with their policies at the time. See Note 10 for related party vendor, consulting, lease, and option agreements. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Shareholders' Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 9 — SHAREHOLDERS’ EQUITY Standby Equity Purchase Agreement On May 31, 2023, the Company entered into an Equity Purchase Agreement with Alumni Capital, LLC (“Alumni”). This agreement constituted a standby equity purchase agreement (a “SEPA”). Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Alumni up to $3,000,000 of newly issued shares, subject to increase to $10,000,000 at the option of the Company, at the Company’s request at any time during the commitment period, which commenced on May 31, 2023 and will end on the earlier of (i) December 31, 2024, or (ii) the date on which Alumni shall have made payment of advances requested by the Company totaling up to the commitment amount of $3,000,000. Each sale the Company requests under the SEPA (a “Purchase Notice”) may be for a number of shares of common stock with an aggregate value of up $500,000, and up to $2,000,000 provided certain conditions concerning the average daily trading value are met. The SEPA provides for shares to be sold to Alumni at 95% of the lowest daily volume weighted average price during the three days after a Purchase Notice is issued to Alumni. The Company determined that the SEPA contains put option elements and forward share issuance elements that fail to meet equity classification under ASC 815-40, Contracts in an Entity’s Own Equity Upon the Company’s entry into and subject to the terms and conditions set forth in the SEPA, 7,983 shares of common stock were issued to Alumni as consideration for its irrevocable commitment to purchase shares of common stock, pursuant to the SEPA, as shown in the consolidated statement of shareholders’ equity. The fair value of these shares of $51,901 was recorded as a finance (other) expense in the consolidated statements of operations. At June 30, 2023, no Purchase Notices had been issued under the SEPA. Common Stock Issuances On February 23, 2023, the Company entered into a securities purchase agreement (the “2023 Purchase Agreement”) with an accredited institutional investor (the “Investor”) providing for the issuance of 73,144 shares of the Common Stock, par value $0.001 (the “Common Stock”). Pursuant to the 2023 Purchase Agreement, the Investor purchased the Shares for an aggregate purchase price of $750,000 with net proceeds of $609,613, after placement agent fees and expenses. Pursuant to the Purchase Agreement, an aggregate of 73,144 Shares were issued to the Investor. The Company issued to the Placement Agent a warrant (the “Placement Agent Warrants”) to purchase up to an aggregate of 7,317 shares of common stock, representing 10% of the aggregate number of shares of Common Stock sold pursuant to the Purchase Agreement. The Placement Agent Warrants have an exercise price equal to $10.25 and are exercisable two months after the closing date and expire five years after the date of issuance. The total estimated fair value of the Placement agent warrant was $58,540. 2017 Equity Incentive Plan On October 9, 2017, the Company adopted the Adial Pharmaceuticals, Inc. 2017 Equity Incentive Plan (the “2017 Equity Incentive Plan”); which became effective on July 31, 2018. On October 13, 2022, by a vote of the shareholders, the number of shares issuable under the 2017 Equity Incentive Plan was increased to 380,000. At June 30, 2023, the Company had issued 138,531 shares and had outstanding 203,312 options to purchase shares of our common stock under the 2017 Equity Incentive Plan, as well as 5,587 options to purchase shares of common stock that were issued before the 2017 Equity Incentive Plan was adopted, leaving 38,157 available for issue. Stock Options The following table provides the stock option activity for the six months ended June 30, 2023: Total Weighted Weighted Weighted Outstanding December 31, 2022 172,676 7.21 $ 62.00 $ 47.75 Issued 39,800 7.50 6.00 Cancelled (3,577 ) 49.50 40.25 Outstanding June 30, 2023 208,899 7.44 $ 52.00 $ 40.00 Outstanding June 30, 2023, vested and exercisable 148,562 6.51 $ 62.50 $ 47.75 At June 30, 2023, the intrinsic value total of the outstanding options was zero dollars. During the six months ended June 30, 2023, 39,800 options to purchase shares of common stock were granted with a total value of $243,157. As of June 30, 2023, $1,301,501 in unrecognized compensation expense will be recognized over a weighted average remaining service period of 2.25 years. The components of stock-based compensation expense included in the Company’s Statements of Operations for the three and six months ended June 30, 2023 and 2022 are as follows: Three months ended Six months ended 2023 2022 2023 2022 Research and development options expense 40,636 52,438 89,549 128,828 Total research and development expenses 40,636 52,438 89,549 128,828 General and administrative options expense 269,627 573,378 618,156 1,064,177 Stock and warrants issued to consultants and employees 427,317 473,906 489,452 890,329 Total general and administrative expenses 696,944 1,047,284 1,107,608 1,954,506 Total stock-based compensation expense $ 737,580 $ 1,099,722 $ 1,197,157 $ 2,083,334 Stock Warrants The following table provides the activity in warrants for the respective periods. Total Weighted Weighted Average Outstanding December 31, 2022 486,726 3.04 $ 100.75 $ 0.25 Issued 7,317 5.00 10.25 0.00 Exercised (433 ) 0.13 0.23 Outstanding June 30, 2023 493,610 2.56 $ 99.5 $ 0.00 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10 — COMMITMENTS AND CONTINGENCIES License with University of Virginia Patent Foundation – Related Party In January 2011, the Company entered into an exclusive, worldwide license agreement with the University of Virginia Patent Foundation, dba UVA Licensing and Ventures Group (“UVA LVG”) for rights to make, use or sell licensed products in the United States based upon the ten separate patents and patent applications made and held by UVA LVG. As consideration for the rights granted in the UVA LVG License, the Company is obligated to pay UVA LVG yearly license fees and milestone payments, as well as a royalty based on net sales of products covered by the patent-related rights. More specifically, the Company paid UVA LVG a license issue fee and is obligated to pay UVA LVG (i) annual minimum royalties of $40,000 commencing in 2017; (ii) a $20,000 milestone payments upon dosing the first patient under a Phase 3 human clinical trial of a licensed product, $155,000 upon the earlier of the completion of a Phase 3 trial of a licensed product, partnering of a licensed product, or sale of the Company, $275,000 upon acceptance of an NDA by the FDA, and $1,000,000 upon approval for sale of AD04 in the U.S., Europe or Japan; as well as (iii) royalties equal to a 2% and 1% of net sales of licensed products in countries in which a valid patent exists or does not exist, respectively, with royalties paid quarterly. In the event of a sublicense to a third party, the Company is obligated to pay royalties to UVA LVG equal to a percentage of what the Company would have been required to pay to UVA LVG had it sold the products under sublicense itself. In addition, the Company is required to pay to UVA LVG 15% of any sublicensing income. A certain percentage of these payments by the Company to the UVA LVG may then be distributed to the Company’s former Chairman of the Board who currently serves as the Company’s Chief Medical Officer in his capacity as inventor of the patents by the UVA LVG in accordance with their policies at the time. The license agreement may be terminated by UVA LVG upon sixty (60) days written notice if the Company breaches its obligations thereunder, including failing to make any milestone, failure to make required payments, or the failure to exercise diligence to bring licensed products to market. In the event of a termination, the Company will be obligated to pay all amounts that accrued prior to such termination. The Company is required to use commercially reasonable efforts to achieve the goals of submitting a New Drug Application to the FDA for a licensed product by December 31, 2024 and commencing commercialization of an FDA approved product by December 31, 2025. If the Company were to fail to use commercially reasonable effort and fail to meet either goal, the licensor would have the right to terminate the license. The term of the license continues until the expiration, abandonment or invalidation of all licensed patents and patent applications, and following any such expiration, abandonment or invalidation will continue in perpetuity on a royalty-free, fully paid basis. During both the six months ended June 30, 2023 and 2022, the Company recognized $20,000 minimum license royalty expenses under this agreement, both of which were in accrued expenses, related party as of June 30, 2023 and 2022, respectively. Clinical Research Organization (CRO) On October 31, 2018, the Company entered into a master services agreement (“MSA”) with Crown CRO Oy (“Crown”) for contract clinical research and consulting services. The MSA has a term of five years, automatically renewed for two-year periods, unless either party gives written notice of a decision not to renew the agreement six months prior to automatic renewal. The MSA or a service agreement under it may be terminated by the Company, without penalty, on fourteen days written notice for scientific, administrative, or financial reasons, or if the purpose of the study becomes obsolete. In the event that the MSA or Service Order are terminated, Crown’s actual costs up the date of termination will be payable by the Company, but any unrealized milestones would not be owed. During the six months ended June 30, 2023, the Company acknowledged and paid the final milestone of $143,685 occurring with database transfer and recognized $20,299 in previously unaccrued expense associated with the Service Agreement 1, classified as a R&D expense. At June 30, 2023, all milestones associated with Service Agreement 1 had been paid, and no further material CRO fee expenses associated with this agreement were expected. Service Agreement 1 also estimated approximately $2.1 million (€2.2 million) in pass-through costs, mostly fees to clinical investigators and sites, which were billed as incurred and the total contingent upon individual site rate and enrollment rates. With clinical enrollment having ended, the Company has recorded approximately $3.5 million in site fees over the entire conduct of the trial and does not expect to record material additional site expenses. Consulting Agreements – Related Party On March 24, 2019, the Company entered into a consulting agreement (the “Consulting Agreement”) with Dr. Bankole A. Johnson, who at the time of the agreement was serving as the Chairman of the Board of Directors, for his service as Chief Medical Officer of the Company. The Consulting Agreement had an initial term of three years, which was extended in March 2022 for an additional three years, subject to earlier termination by either party with a 30 day notice, or by the Company for cause. Dr. Johnson resigned as Chairman of the Board of Directors at the time of execution of the consulting agreement. Under the terms of the Consulting Agreement, Dr. Johnson’s annual fee of $375,000 per year is paid twice per month. On September 8, 2022, Dr. Johnson’s consulting agreement was amended to increase his annual compensation to $430,000 annually and to pay him series of bonuses in cash and shares on the occurrence of certain milestones. The Company recognized $108,750 and $217,500 in compensation expense in the three and six months ended June 30, 2023, respectively, and recognized $99,150 and $198,300 in compensation expense in the three and six months ended June 30, 2022, respectively, as a result of this agreement. Consulting Agreement – Related Party On October 24, 2022, the Company entered into a Master Services Agreement (the “MSA”) with Abuwala & Company, LLC, dba as Orbytel, for provision of strategic consulting services. Orbytel made it known that it intended to utilize the services of the Keswick Group, LLC as a subcontractor in the provision of these services. Tony Goodman, a director of Company, is the founder and principal of Keswick Group, LLC, therefore Orbytel was considered a related party. Statement of work #1 (“SOW #1”), executed with the MSA, committed the Company to $209,250 in payments. During the six months ended June 30, 2023, the Company recognized the remaining $57,750 in expenses under SOW #1. Consulting Agreement – Related Party On March 15, 2023, the Company entered into a Master Services Agreement (the “MSA”) with the Keswick Group, LLC for provision of consulting services. Tony Goodman, a director, is the founder and principal of Keswick Group. Under the terms of this agreement, the Keswick Group is to be paid $22,000 per month for its services for a period of one year from execution of the MSA. In addition, should the Company execute a material partnering agreement on or before December 15, 2023, Keswick Group will be granted 4,000 shares of common stock. In the six months ended June 30, 2023, the Company recognized $77,100 in expenses associated with this agreement. Other Consulting and Vendor Agreements The Company has entered into a number of agreements and work orders for future consulting, clinical trial support, and testing services, with terms ranging between 12 and 36 months. These agreements, in aggregate, commit the Company to approximately $412 thousand in future cash. Litigation The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition, and cash flows. As of June 30, 2023, the Company did not have any pending legal actions. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Principals of Consolidation | Basis of Presentation and Principals of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. The interim operating results are not necessarily indicative of results that may be expected for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2022, included in the 2022 Form 10-K. The unaudited condensed consolidated financial statements represent the consolidation of the Company and its subsidiary in conformity with GAAP. All intercompany transactions have been eliminated in consolidation. |
Reverse Stock Split | Reverse Stock Split On August 4, 2023, the Company effected a reverse stock split of its outstanding shares of common stock, trading on Nasdaq under the symbol ADIL, at a ratio of 1-for-25. As a result of the reverse split, the Company had 1,197,630 shares of common stock outstanding immediately after effecting the reverse split. The shares authorized for issue under the Company’s charter remained 50,000,000 common stock. All references to common stock, stock warrants to purchase common stock, stock options to purchase common stock, share data, per share data and related information contained in these condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed 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 liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of the equity method investment, the valuation of stock-based compensation, accruals associated with third party providers supporting clinical trials and pre-clinical activities, estimated fair values of long-lived assets used to assess the value of intangible assets, acquired in-process research and development (“IPR&D”), and goodwill, measurement of contingent liabilities, and income tax asset realization. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share Basic and diluted loss per share are computed based on the weighted-average outstanding shares of common stock, which are all voting shares. Diluted net loss per share is computed giving effect to all proportional shares of common stock, including stock options and warrants to the extent dilutive. Basic and diluted net income and loss per share for the three and six months ended June 30, 2023 and 2022, were consistent, as the inclusion of all potential common shares outstanding would have an anti-dilutive effect Loss per share from continuing operations for all periods presented. The total potentially dilutive common shares that were excluded for the three and six month periods ended June 30, 2023 and 2022 were as follows: Potentially Dilutive 2023 2022 Warrants to purchase common shares 491,151 483,834 Common Shares issuable on exercise of options 208,902 167,279 Unvested restricted stock awards 33,333 8,611 Total potentially dilutive Common Shares excluded 733,386 659,724 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At times, the Company’s cash balances may exceed the current insured amounts under the Federal Deposit Insurance Corporation. At June 30, 2023, the Company exceeded FDIC insurance limits by approximately $137,000 and held approximately $812,000 in non-FDIC insured cash equivalent accounts. Included in cash equivalents are money market investments with maturity dates less than ninety days when purchased and are carried at fair value. Unrealized gain or loss are included in the interest income and are immaterial to the financial statements. At December 31, 2022, the Company did not exceed FDIC insurance limits but held approximately $3.8 million in non-FDIC insured cash equivalent investments. |
Equity Method Investments | Equity Method Investments The Company utilizes the equity method to account for investments when it possesses the ability to exercise significant influence, but not control, over the operating and financial decisions of the investee. Equity method investments are measured at cost minus impairment, if any, plus or minus the Company’s proportionate share of the equity method investee’s income or loss. The proportionate share of the income or loss from equity method investments is recognized on a lag. Currently the Company is not obligated to make additional capital contributions for its equity method investments, and therefore only records losses up to the amount of its total investment, inclusive of other investments in and loans to the investee, which are not accounted for as equity method investments. |
Fair Value Measurements | Fair Value Measurements FASB ASC 820, Fair Value Measurement, (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: ● Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). ● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). ● Level 3 inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). The fair value of cash and cash equivalents and accounts payable approximate their carrying value due to their short-term maturities. Financial instruments not recorded at fair value on a recurring basis include an equity method investment that has not be remeasured or impaired in the current period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB has recently issued various updates, most of which represented technical corrections to the accounting literature or application to specific industries. Management does not expect these updates to a have a material impact on the Company’s financial position, results of operations or cash flows. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Schedule of Potentially Dilutive Common Shares [Abstract] | |
Schedule of Dilutive Common Shares | The total potentially dilutive common shares that were excluded for the three and six month periods ended June 30, 2023 and 2022 were as follows: Potentially Dilutive 2023 2022 Warrants to purchase common shares 491,151 483,834 Common Shares issuable on exercise of options 208,902 167,279 Unvested restricted stock awards 33,333 8,611 Total potentially dilutive Common Shares excluded 733,386 659,724 |
Sale of Purnovate (Tables)
Sale of Purnovate (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations [Abstract] | |
Schedule of Additional Paid in Capital | The gain of sale of Purnovate has been classified as income from discontinued operation. The table below summarizes the sale: Consideration: Cash, including upfronts exercise payments and expense reimbursements prepaid $ 800,000 Fair value of shares received 1,727,897 Expense reimbursements receivable 737,276 Total consideration 3,265,173 Assets sold: Fixed assets, net of depreciation 48,492 In process R&D 455,000 Goodwill 248,971 Operating lease right-of-use asset 180,229 Deposits and prepaid expenses on assumed contracts 428,700 Total assets sold 1,361,392 Liabilities transferred: Contingent liability 506,000 Lease liability 193,796 Payables and accrued liabilities 58,497 Liabilities transferred 758,293 Net assets sold 603,099 Gain on sale 2,662,074 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations [Abstract] | |
Schedule of Assets and Liabilities Included Within Discontinued Operations | Assets and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 are as follows; June 30, December 31, ASSETS Current Assets: Cash and cash equivalents $ — $ — Prepaid research and development — 428,700 Total Current Assets — 428,700 Fixed Assets, net — 50,424 Acquired in-process research and development — 455,000 Right-to-use Asset — 193,997 Goodwill — 248,971 Total Assets $ — $ 1,377,092 LIABILITIES Current Liabilities: Accounts payable $ — $ 117,424 Accrued expenses — 191,490 Lease liability, current — 56,828 Total Current Liabilities — 365,742 Long-term Liabilities: Contingent liabilities — 492,000 Lease liability, non-current — 150,547 Deferred tax liability — 21,207 Total Liabilities $ — $ 1,029,496 |
Schedule of Income from discontinued operations, net of tax | Income from discontinued operations, net of tax for the three and six month periods ended June 30, 2023 and 2022 are as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 Operating Expenses: Research and development expenses $ (50,071 ) $ 520,161 $ 260,748 $ 1,074,074 General and administrative expenses 114,297 66,491 455,431 107,985 Total Operating Expenses 64,226 586,652 716,179 1,182,059 Loss From Operations (64,226 ) (586,652 ) (716,179 ) (1,182,059 ) Other Income (Expense) Interest income (expense) (174 ) — (174 ) — Change in value of contingent liability — (24,000 ) (14,000 ) 122,000 Gain on sale 2,662,074 — 2,662,074 — Total other income (expense) 2,661,900 (24,000 ) 2,647,900 122,000 Income (loss) before provision for income taxes 2,597,674 (610,652 ) 1,931,721 (1,060,059 ) Provision for income taxes — — — — Gain (loss) from discontinued operations, net of tax $ 2,597,674 $ (610,652 ) $ 1,931,721 $ (1,060,059 ) |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments [Abstract] | |
Schedule of Equity Method Investment | Activity recorded for the Company’s equity method investment in Adovate in the six months ended June 30, 2023 is summarized in the following table: Equity investment carrying amount at January 1, 2023 $ — Fair value of equity method investment at issue 1,727,897 Equity investment carrying amount at June 30, 2023 $ 1,727,897 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: June 30, December 31, Clinical research organization services and expenses $ — $ 123,386 Employee compensation 276,705 761,509 Legal and consulting services 41,890 72,616 Pre-clinical and manufacturing expenses 5,816 5,816 Total accrued expenses $ 324,411 $ 963,327 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Schedule of Stock Option Activity [Abstrac] | |
Schedule of Stock Option Activity | The following table provides the stock option activity for the six months ended June 30, 2023: Total Weighted Weighted Weighted Outstanding December 31, 2022 172,676 7.21 $ 62.00 $ 47.75 Issued 39,800 7.50 6.00 Cancelled (3,577 ) 49.50 40.25 Outstanding June 30, 2023 208,899 7.44 $ 52.00 $ 40.00 Outstanding June 30, 2023, vested and exercisable 148,562 6.51 $ 62.50 $ 47.75 |
Schedule of Stock-Based Compensation Expense | The components of stock-based compensation expense included in the Company’s Statements of Operations for the three and six months ended June 30, 2023 and 2022 are as follows: Three months ended Six months ended 2023 2022 2023 2022 Research and development options expense 40,636 52,438 89,549 128,828 Total research and development expenses 40,636 52,438 89,549 128,828 General and administrative options expense 269,627 573,378 618,156 1,064,177 Stock and warrants issued to consultants and employees 427,317 473,906 489,452 890,329 Total general and administrative expenses 696,944 1,047,284 1,107,608 1,954,506 Total stock-based compensation expense $ 737,580 $ 1,099,722 $ 1,197,157 $ 2,083,334 |
Schedule of Activity in Warrants | The following table provides the activity in warrants for the respective periods. Total Weighted Weighted Average Outstanding December 31, 2022 486,726 3.04 $ 100.75 $ 0.25 Issued 7,317 5.00 10.25 0.00 Exercised (433 ) 0.13 0.23 Outstanding June 30, 2023 493,610 2.56 $ 99.5 $ 0.00 |
Description of Business (Detail
Description of Business (Details) | 1 Months Ended |
Jan. 26, 2021 USD ($) | |
Purnovate, LLC [Member] | |
Description of Business (Details) [Line Items] | |
Payment fees | $ 450,000 |
Going Concern and Other Uncer_2
Going Concern and Other Uncertainties (Details) - USD ($) | 1 Months Ended | 6 Months Ended |
May 16, 2023 | Jun. 30, 2023 | |
Going Concern and Other Uncertainties [Abstract] | ||
Exercised fee | $ 450,000 | |
Funds for the reimbursement | $ 350,000 | |
Additional reimbursements amount | $ 740,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | Aug. 04, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock, shares authorized (in Shares) | 50,000,000 | 50,000,000 | |
FDIC Insured cash amount Insured cash amount | $ 137,000 | $ 3,800,000 | |
Cash Equivalents [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||
FDIC Insured cash amount Insured cash amount | $ 812,000 | ||
Subsequent Event [Member] | Common Stock [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Shares issued of outstanding shares of common stock (in Shares) | 1,197,630 | ||
Common stock, shares authorized (in Shares) | 50,000,000 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of Potentially Dilutive Common Shares - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Potentially Dilutive Common Shares [Abstract] | ||
Warrants to purchase common shares | 491,151 | 483,834 |
Common Shares issuable on exercise of options | 208,902 | 167,279 |
Unvested restricted stock awards | 33,333 | 8,611 |
Total potentially dilutive Common Shares excluded | 733,386 | 659,724 |
Sale of Purnovate (Details)
Sale of Purnovate (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Sale of Purnovate (Details) [Line Items] | |
Payment fees | $ 450,000 |
Reimbursement amount | 1,090,000 |
Prepayment of reimbursement | 350,000 |
Reimbursement due | 740,000 |
Consideration value | 1,727,897 |
Total consideration paid | $ 3,265,173 |
Equity Investment [Member] | |
Sale of Purnovate (Details) [Line Items] | |
Equity percentage | 19.90% |
Sale of Purnovate (Details) - S
Sale of Purnovate (Details) - Schedule of Additional Paid in Capital - Discontinued Operations [Member] | Dec. 31, 2023 USD ($) |
Consideration: | |
Cash, including upfronts exercise payments and expense reimbursements prepaid | $ 800,000 |
Fair value of shares received | 1,727,897 |
Expense reimbursements receivable | 737,276 |
Total consideration | 3,265,173 |
Assets sold: | |
Fixed assets, net of depreciation | 48,492 |
In process R&D | 455,000 |
Goodwill | 248,971 |
Operating lease right-of-use asset | 180,229 |
Deposits and prepaid expenses on assumed contracts | 428,700 |
Total assets sold | 1,361,392 |
Liabilities transferred: | |
Contingent liability | 506,000 |
Lease liability | 193,796 |
Payables and accrued liabilities | 58,497 |
Liabilities transferred | 758,293 |
Net assets sold | 603,099 |
Gain on sale | $ 2,662,074 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Schedule of Assets and Liabilities Included Within Discontinued Operations - Discontinued Operations [Member] - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | ||
Prepaid research and development | 428,700 | |
Total Current Assets | 428,700 | |
Fixed Assets, net | 50,424 | |
Acquired in-process research and development | 455,000 | |
Right-to-use Asset | 193,997 | |
Goodwill | 248,971 | |
Total Assets | 1,377,092 | |
Current Liabilities: | ||
Accounts payable | 117,424 | |
Accrued expenses | 191,490 | |
Lease liability, current | 56,828 | |
Total Current Liabilities | 365,742 | |
Long-term Liabilities: | ||
Contingent liabilities | 492,000 | |
Lease liability, non-current | 150,547 | |
Deferred tax liability | 21,207 | |
Total Liabilities | $ 1,029,496 |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of Income from discontinued operations, net of tax - Discontinued Operations [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Expenses: | ||||
Research and development expenses | $ (50,071) | $ 520,161 | $ 260,748 | $ 1,074,074 |
General and administrative expenses | 114,297 | 66,491 | 455,431 | 107,985 |
Total Operating Expenses | 64,226 | 586,652 | 716,179 | 1,182,059 |
Loss From Operations | (64,226) | (586,652) | (716,179) | (1,182,059) |
Other Income (Expense) | ||||
Interest income (expense) | (174) | (174) | ||
Change in value of contingent liability | (24,000) | (14,000) | 122,000 | |
Gain on sale | 2,662,074 | 2,662,074 | ||
Total other income (expense) | 2,661,900 | (24,000) | 2,647,900 | 122,000 |
Income (loss) before provision for income taxes | 2,597,674 | (610,652) | 1,931,721 | (1,060,059) |
Provision for income taxes | ||||
Gain (loss) from discontinued operations, net of tax | $ 2,597,674 | $ (610,652) | $ 1,931,721 | $ (1,060,059) |
Equity Method Investments (Deta
Equity Method Investments (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Equity Method Investments (Details) [Line Items] | |
Percentage of equity investment sold | 19.90% |
Equity Method Investment, Aggregate Cost | $ 4,000,000 |
Fair value of equity issued | 1,727,897 |
Equity method investment | 1,727,897 |
Contributed capital | 2,025,000 |
Reimbursement receivable | $ 737,276 |
Equity Investment [Member] | |
Equity Method Investments (Details) [Line Items] | |
Percentage of equity investment | 19.90% |
Equity Method Investments (De_2
Equity Method Investments (Details) - Schedule of Equity Method Investment | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Schedule of Equity Method Investment [Abstract] | |
Equity investment carrying amount | |
Fair value of equity method investment at issue | 1,727,897 |
Equity investment carrying amount | $ 1,727,897 |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of Accrued Expenses - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Accrued Expenses [Abstract] | ||
Clinical research organization services and expenses | $ 123,386 | |
Employee compensation | 276,705 | 761,509 |
Legal and consulting services | 41,890 | 72,616 |
Pre-clinical and manufacturing expenses | 5,816 | 5,816 |
Total accrued expenses | $ 324,411 | $ 963,327 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Oct. 13, 2022 | May 31, 2023 | Feb. 23, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | |
Shareholders' Equity (Details) [Line Items] | |||||||
Commitment amount | $ 3,000,000 | ||||||
Aggregate value | 500,000 | ||||||
Daily trading value | $ 2,000,000 | ||||||
Weighted average price, percentage | 95% | ||||||
General and administrative expense | $ 51,901 | ||||||
Aggregate purchase price | $ 750,000 | ||||||
Expenses fees | $ 609,613 | ||||||
Shares, issued (in Shares) | 73,144 | ||||||
Unregistered shares of common stock (in Shares) | 7,317 | ||||||
Percentage of aggregate shares | 10% | ||||||
Common Stock Issuances, description | The Placement Agent Warrants have an exercise price equal to $10.25 and are exercisable two months after the closing date and expire five years after the date of issuance. | ||||||
acement agent warrant | $ 58,540 | ||||||
Common stock, shares outstanding (in Shares) | 39,800 | 39,800 | |||||
Outstanding options intrinsic value | $ 0 | $ 0 | |||||
Granted value of common stock | 243,157 | ||||||
Unrecognized compensation expense | $ 1,301,501 | ||||||
Weighted average remaining service period | 2 years 3 months | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Common shares issued (in Shares) | 380,000 | ||||||
Common stock, shares outstanding (in Shares) | 138,531 | 138,531 | |||||
Common Stock [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Common stock , par value (in Dollars per share) | $ 0.001 | ||||||
Common shares issued (in Shares) | 48,580 | 10,800 | 18,000 | ||||
Keystone Equity Purchase Agreement [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Total proceeds (in Shares) | 73,144 | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Common stock, shares outstanding (in Shares) | 203,312 | 203,312 | |||||
Common stock available for issuance (in Shares) | 5,587 | 5,587 | |||||
Stock Option [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Shares issued (in Shares) | 38,157 | ||||||
Alumni capital [Member] | Minimum [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Value of shares | $ 3,000,000 | ||||||
Alumni capital [Member] | Maximum [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Value of shares | $ 10,000,000 | ||||||
Alumni capital [Member] | |||||||
Shareholders' Equity (Details) [Line Items] | |||||||
Common stock, shares issued (in Shares) | 7,983 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Schedule of Stock Option Activity - Share-Based Payment Arrangement, Option [Member] | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Schedule of Stock Option Activity [Abstract] | |
Total Options Outstanding, Beginning Balance (in Shares) | shares | 172,676 |
Weighted Average Remaining Term (Years), Beginning Balance | 7 years 2 months 15 days |
Weighted Average Exercise Price, Beginning Balance | $ 62 |
Weighted Average Fair Value at Issue, Beginning Balance | $ 47.75 |
Total Options Outstanding, Issued (in Shares) | shares | 39,800 |
Weighted Average Remaining Term (Years), Issued | $ 7.5 |
Weighted Average Fair Value at Issue, Issued | $ 6 |
Total Options Outstanding, Cancelled (in Shares) | shares | (3,577) |
Weighted Average Remaining Term (Years), Cancelled | $ 49.5 |
Weighted Average Fair Value at Issue, Cancelled | $ 40.25 |
Total Options Outstanding, Ending Balance (in Shares) | shares | 208,899 |
Weighted Average Remaining Term (Years), Ending Balance | 7 years 5 months 8 days |
Weighted Average Exercise Price, Ending Balance | $ 52 |
Weighted Average Fair Value at Issue, Ending Balance | $ 40 |
Total Options Outstanding, vested and exercisable (in Shares) | shares | 148,562 |
Weighted Average Remaining Term (Years),Outstanding, vested and exercisable | 6 years 6 months 3 days |
Weighted Average Exercise Price, Outstanding, vested and exercisable | $ 62.5 |
Weighted Average Fair Value at Issue ,Outstanding, vested and exercisable | $ 47.75 |
Shareholders' Equity (Details_2
Shareholders' Equity (Details) - Schedule of Stock-Based Compensation Expense - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | $ 737,580 | $ 1,099,722 | $ 1,197,157 | $ 2,083,334 |
Research and development options expense [Member] | ||||
Schedule of Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | 40,636 | 52,438 | 89,549 | 128,828 |
Total research and development expenses [Member] | ||||
Schedule of Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | 40,636 | 52,438 | 89,549 | 128,828 |
General and administrative options and warrants expense [Member] | ||||
Schedule of Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | 269,627 | 573,378 | 618,156 | 1,064,177 |
Stock issued to consultants and employees [Member] | ||||
Schedule of Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | 427,317 | 473,906 | 489,452 | 890,329 |
Total General and Administrative Expenses [Member] | ||||
Schedule of Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | $ 696,944 | $ 1,047,284 | $ 1,107,608 | $ 1,954,506 |
Shareholders' Equity (Details_3
Shareholders' Equity (Details) - Schedule of Activity in Warrants | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Schedule of Activity in Warrants [Abstract] | |
Total Warrants, Outstanding Beginning Balance (in Shares) | shares | 486,726 |
Weighted Average Remaining Term (Years), Outstanding Beginning Balance | 3 years 14 days |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 100.75 |
Average Intrinsic Value, Outstanding Beginning Balance | $ 0.25 |
Total Warrants, Issued (in Shares) | shares | 7,317 |
Weighted Average Remaining Term (Years), Issued | 5 years |
Weighted Average Exercise Price, Issued | $ 10.25 |
Average Intrinsic Value, Issued | $ 0 |
Total Warrants, Exercised (in Shares) | shares | (433) |
Weighted Average Exercise Price, Exercised | $ 0.13 |
Average Intrinsic Value, Exercised | $ 0.23 |
Total Warrants, Outstanding Ending Balance (in Shares) | shares | 493,610 |
Weighted Average Remaining Term (Years), Outstanding Ending Balance | 2 years 6 months 21 days |
Weighted Average Exercise Price, Outstanding Ending Balance | $ 99.5 |
Average Intrinsic Value, Outstanding Ending Balance | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Mar. 15, 2023 USD ($) | Sep. 08, 2022 USD ($) | Oct. 31, 2018 | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 EUR (€) | Jun. 30, 2022 USD ($) | |
Commitments and Contingencies (Details) [Line Items] | |||||||
License fees and milestone payments, description | More specifically, the Company paid UVA LVG a license issue fee and is obligated to pay UVA LVG (i) annual minimum royalties of $40,000 commencing in 2017; (ii) a $20,000 milestone payments upon dosing the first patient under a Phase 3 human clinical trial of a licensed product, $155,000 upon the earlier of the completion of a Phase 3 trial of a licensed product, partnering of a licensed product, or sale of the Company, $275,000 upon acceptance of an NDA by the FDA, and $1,000,000 upon approval for sale of AD04 in the U.S., Europe or Japan; as well as (iii) royalties equal to a 2% and 1% of net sales of licensed products in countries in which a valid patent exists or does not exist, respectively, with royalties paid quarterly. In the event of a sublicense to a third party, the Company is obligated to pay royalties to UVA LVG equal to a percentage of what the Company would have been required to pay to UVA LVG had it sold the products under sublicense itself. In addition, the Company is required to pay to UVA LVG 15% of any sublicensing income. | More specifically, the Company paid UVA LVG a license issue fee and is obligated to pay UVA LVG (i) annual minimum royalties of $40,000 commencing in 2017; (ii) a $20,000 milestone payments upon dosing the first patient under a Phase 3 human clinical trial of a licensed product, $155,000 upon the earlier of the completion of a Phase 3 trial of a licensed product, partnering of a licensed product, or sale of the Company, $275,000 upon acceptance of an NDA by the FDA, and $1,000,000 upon approval for sale of AD04 in the U.S., Europe or Japan; as well as (iii) royalties equal to a 2% and 1% of net sales of licensed products in countries in which a valid patent exists or does not exist, respectively, with royalties paid quarterly. In the event of a sublicense to a third party, the Company is obligated to pay royalties to UVA LVG equal to a percentage of what the Company would have been required to pay to UVA LVG had it sold the products under sublicense itself. In addition, the Company is required to pay to UVA LVG 15% of any sublicensing income. | |||||
License royalty expenses | $ 20,000 | $ 20,000 | |||||
Master services agreement, description | The MSA has a term of five years, automatically renewed for two-year periods, unless either party gives written notice of a decision not to renew the agreement six months prior to automatic renewal. | ||||||
Cash paid | 143,685 | ||||||
Other expenses | 20,299 | ||||||
Annual fee | $ 430,000 | 375,000 | |||||
Compensation expense | $ 108,750 | 217,500 | |||||
Recognized compensation expense | 99,150 | 198,300 | |||||
Committed payment | 209,250 | 209,250 | |||||
Compensation to be paid | $ 22,000 | ||||||
Granted shares | 4,000 | ||||||
Expenses associated with agreement | 77,100 | ||||||
Future cash | $ 412,000 | $ 412,000 | |||||
Minimum [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Ranging terms | 12 months | 12 months | |||||
Maximum [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Ranging terms | 36 months | 36 months | |||||
Consulting Agreement [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Other expenses | $ 57,750 | ||||||
Service Agreement 1 [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Estimated cost | 2,100,000 | € 2.2 | |||||
Estimated future site costs | $ 3,500,000 |