Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | SILO PHARMA, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 98,671,970 | |
Amendment Flag | false | |
Entity Central Index Key | 0001514183 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-54872 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3046338 | |
Entity Address, Address Line One | 560 Sylvan Avenue | |
Entity Address, Address Line Two | Suite 3160 | |
Entity Address, City or Town | Englewood Cliffs | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07632 | |
City Area Code | (718) | |
Local Phone Number | 400-9031 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 10,261,416 | $ 1,128,389 |
Equity investments | 820,126 | 200 |
Notes receivable, net | 23,500 | |
Prepaid expenses and other current assets - current | 220,590 | 241,091 |
Assets of discontinued operations | 33,484 | |
Total Current Assets | 11,302,132 | 1,426,664 |
Note receivable - non-current | 60,000 | |
Prepaid expenses - non-current | 28,118 | |
Total Assets | 11,390,250 | 1,426,664 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 211,286 | 127,069 |
Note payable - current portion | 14,654 | |
Deferred revenue - current portion | 72,103 | |
Total Current Liabilities | 283,389 | 141,723 |
LONG TERM LIABILITIES: | ||
Deferred revenue - long-term portion | 955,909 | |
Note payable - long-term portion | 4,246 | |
Total Long Term Liabilities | 955,909 | 4,246 |
Total Liabilities | 1,239,298 | 145,969 |
Commitment and Contingencies (see Note 9) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 98,636,970 and 85,141,956 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 9,864 | 8,514 |
Additional paid-in capital | 12,314,979 | 7,034,502 |
Accumulated deficit | (2,173,891) | (5,762,321) |
Total Stockholders’ Equity | 10,150,952 | 1,280,695 |
Total Liabilities and Stockholders’ Equity | 11,390,250 | 1,426,664 |
Series B Convertible Preferred Stock | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value | ||
Series C Convertible Preferred Stock | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 98,636,970 | 85,141,956 |
Common stock, shares outstanding | 98,636,970 | 85,141,956 |
Series B Convertible Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000 | 2,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Preferred stock redemption price per share (in Dollars per share) | $ 1,000 | $ 1,000 |
Series C Convertible Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 4,280 | 4,280 |
Preferred stock, shares issued | 227 | |
Preferred stock, shares outstanding | 227 | |
Preferred stock redemption price per share (in Dollars per share) | $ 1,000 | $ 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
LICENSE FEE REVENUES: | $ 18,025 | $ 53,238 | ||
COST OF REVENUES | 1,459 | 3,544 | ||
GROSS PROFIT | 16,566 | 49,694 | ||
OPERATING EXPENSES: | ||||
Compensation expense | 54,943 | 37,308 | 222,177 | 717,198 |
Professional fees | 331,419 | 415,409 | 1,273,894 | 757,620 |
Research and development | 70,514 | 217,962 | ||
Insurance expense | 29,014 | 13,578 | 79,735 | 17,560 |
Bad debt expense (recovery) | (30,000) | 85,000 | (83,500) | 84,000 |
Selling, general and administrative expenses | 24,618 | 7,598 | 141,353 | 33,764 |
Total operating expenses | 480,508 | 558,893 | 1,851,621 | 1,610,142 |
OPERATING LOSS FROM CONTINUING OPERATIONS | (463,942) | (558,893) | (1,801,927) | (1,610,142) |
OTHER INCOME (EXPENSE): | ||||
Interest income | 2,818 | 8,788 | ||
Other income | 3,000 | |||
Gain on forgiveness of PPP note payable | 19,082 | |||
Interest expense | (483) | (393) | (2,872) | (268,996) |
Interest expense - related party | (224) | |||
Loss on debt extinguishment | (198,000) | |||
Net realized gain on equity investments | 6,655,120 | 6,655,120 | ||
Net unrealized gain on equity investments | 300,876 | 369,626 | ||
Total other income (expense) | 6,955,513 | 2,425 | 7,040,956 | (455,432) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | 6,491,571 | (556,468) | 5,239,029 | (2,065,574) |
Provision for income taxes | (19,133) | (19,133) | ||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 6,472,438 | (556,468) | 5,219,896 | (2,065,574) |
DISCONTINUED OPERATIONS: | ||||
Gain from sale of assets of discontinued operations, net of tax | 1,553 | 1,553 | ||
Loss from discontinued operations, net of tax | (88,872) | (77,327) | (229,022) | (182,129) |
LOSS FROM DISCONTINUED OPERATIONS | (87,319) | (77,327) | (227,469) | (182,129) |
NET INCOME (LOSS) | 6,385,119 | (633,795) | 4,992,427 | (2,247,703) |
Deemed dividend | (1,403,997) | (69,000) | ||
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS | $ 6,385,119 | $ (633,795) | $ 3,588,430 | $ (2,316,703) |
NET INCOME (LOSS) PER COMMON SHARE: | ||||
Basic (in Dollars per share) | $ 0.06 | $ (0.01) | $ 0.04 | $ (0.04) |
Diluted (in Dollars per share) | $ 0.06 | $ (0.01) | $ 0.04 | $ (0.04) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in Shares) | 98,636,970 | 84,416,681 | 93,594,877 | 59,512,252 |
Diluted (in Shares) | 99,693,483 | 84,416,681 | 94,651,390 | 59,512,252 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 2,361 | $ 2,630,551 | $ (2,655,804) | $ (22,892) | ||
Balance (in Shares) at Dec. 31, 2019 | 115 | 23,604,207 | ||||
Net income (loss) | (238,877) | (238,877) | ||||
Balance at Mar. 31, 2020 | $ 2,361 | 2,630,551 | (2,894,681) | (261,769) | ||
Balance (in Shares) at Mar. 31, 2020 | 115 | 23,604,207 | ||||
Balance at Dec. 31, 2019 | $ 2,361 | 2,630,551 | (2,655,804) | (22,892) | ||
Balance (in Shares) at Dec. 31, 2019 | 115 | 23,604,207 | ||||
Net income (loss) | (2,247,703) | |||||
Balance at Sep. 30, 2020 | $ 8,514 | 7,034,502 | (4,972,507) | 2,070,509 | ||
Balance (in Shares) at Sep. 30, 2020 | 85,141,956 | |||||
Balance at Mar. 31, 2020 | $ 2,361 | 2,630,551 | (2,894,681) | (261,769) | ||
Balance (in Shares) at Mar. 31, 2020 | 115 | 23,604,207 | ||||
Common Stock issued for cash, net of offering cost | $ 3,775 | 2,111,958 | 2,115,733 | |||
Common Stock issued for cash, net of offering cost (in Shares) | 37,758,116 | |||||
Common Stock issued for future services | $ 859 | 686,036 | 686,895 | |||
Common Stock issued for future services (in Shares) | 8,586,184 | |||||
Preferred Shares Exchanged for Common Stock | $ 144 | (144) | ||||
Preferred Shares Exchanged for Common Stock (in Shares) | (115) | 1,437,500 | ||||
Common Stock issued in connection with employment agreement | $ 763 | 609,713 | 610,476 | |||
Common Stock issued in connection with employment agreement (in Shares) | 7,630,949 | |||||
Common Stock issued for Exchange of Notes | $ 412 | 527,588 | 528,000 | |||
Common Stock issued for Exchange of Notes (in Shares) | 4,125,000 | |||||
Deemed dividend on Preferred Stock Exchange | 69,000 | (69,000) | ||||
Net income (loss) | (1,375,031) | (1,375,031) | ||||
Balance at Jun. 30, 2020 | $ 8,314 | 6,634,702 | (4,338,712) | 2,304,304 | ||
Balance (in Shares) at Jun. 30, 2020 | 83,141,956 | |||||
Common Stock issued for conversion of Redeemable Series A Preferred stock | $ 200 | 399,800 | 400,000 | |||
Common Stock issued for conversion of Redeemable Series A Preferred stock (in Shares) | 2,000,000 | |||||
Net income (loss) | (633,795) | (633,795) | ||||
Balance at Sep. 30, 2020 | $ 8,514 | 7,034,502 | (4,972,507) | 2,070,509 | ||
Balance (in Shares) at Sep. 30, 2020 | 85,141,956 | |||||
Balance at Dec. 31, 2020 | $ 8,514 | 7,034,502 | (5,762,321) | 1,280,695 | ||
Balance (in Shares) at Dec. 31, 2020 | 85,141,956 | |||||
Series C preferred stock issued for cash, net of offering cost | 3,794,102 | 3,794,102 | ||||
Series C preferred stock issued for cash, net of offering cost (in Shares) | 4,276 | |||||
Deemed dividend upon issuance of preferred stock | 1,403,997 | (1,403,997) | ||||
Common stock warrants granted for services | 83,728 | 83,728 | ||||
Net income (loss) | (930,702) | (930,702) | ||||
Balance at Mar. 31, 2021 | $ 8,514 | 12,316,329 | (8,097,020) | 4,227,823 | ||
Balance (in Shares) at Mar. 31, 2021 | 4,276 | 85,141,956 | ||||
Balance at Dec. 31, 2020 | $ 8,514 | 7,034,502 | (5,762,321) | 1,280,695 | ||
Balance (in Shares) at Dec. 31, 2020 | 85,141,956 | |||||
Net income (loss) | 4,992,427 | |||||
Balance at Sep. 30, 2021 | $ 9,864 | 12,314,979 | (2,173,891) | 10,150,952 | ||
Balance (in Shares) at Sep. 30, 2021 | 227 | 98,636,970 | ||||
Balance at Mar. 31, 2021 | $ 8,514 | 12,316,329 | (8,097,020) | 4,227,823 | ||
Balance (in Shares) at Mar. 31, 2021 | 4,276 | 85,141,956 | ||||
Issuance of common stock for conversion of preferred stock | $ 1,350 | (1,350) | ||||
Issuance of common stock for conversion of preferred stock (in Shares) | (4,049) | 13,495,014 | ||||
Net income (loss) | (461,990) | (461,990) | ||||
Balance at Jun. 30, 2021 | $ 9,864 | 12,314,979 | (8,559,010) | 3,765,833 | ||
Balance (in Shares) at Jun. 30, 2021 | 227 | 98,636,970 | ||||
Net income (loss) | 6,385,119 | 6,385,119 | ||||
Balance at Sep. 30, 2021 | $ 9,864 | $ 12,314,979 | $ (2,173,891) | $ 10,150,952 | ||
Balance (in Shares) at Sep. 30, 2021 | 227 | 98,636,970 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 4,992,427 | $ (2,247,703) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Bad debt (recovery) expense | (83,500) | 90,000 |
Stock-based compensation | 83,728 | 610,476 |
Amortization of debt discount to interest expense | 268,125 | |
Amortization of prepaid stock-based expense | 107,970 | 460,289 |
Inventory write-down | 19,879 | |
Net realized gain on equity investments | (6,655,120) | |
Net unrealized gain on equity investments | (369,626) | |
Gain on forgiveness of PPP note payable and accrued interest | (19,082) | |
Loss from disposal of assets from discontinued operations | (1,553) | |
Loss from debt extinguishment | 198,000 | |
Change in operating assets and liabilities: | ||
Increase in prepaid expenses and other current assets - current | (87,469) | (68,045) |
Increase in prepaid expenses - non-current | (28,118) | (117,347) |
(Increase) decrease in assets of discontinued operations | (24,963) | 105,743 |
Increase in accounts payable and accrued expenses | 84,399 | 59,910 |
Increase in deferred revenue | 496,762 | |
NET CASH USED IN OPERATING ACTIVITIES | (1,504,145) | (620,673) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of equity investments | 6,736,070 | |
Collection on note receivable written off prior to 2019 | 7,500 | |
Collection on note receivable | 99,500 | 20,000 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 6,843,070 | 20,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable - related party | 35,000 | |
Proceeds from note payable | 18,900 | |
Repayment of note payable - related party | (35,000) | |
Net proceeds from sale of common stock | 2,115,733 | |
Net proceeds from sale of preferred stock | 3,794,102 | |
Repayment of advance from a related party | (2,366) | |
Advance from a related party | 2,366 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,794,102 | 2,134,633 |
NET INCREASE IN CASH AND CASH EQUIVALENTS: | 9,133,027 | 1,533,960 |
CASH AND CASH EQUIVALENTS - beginning of period | 1,128,389 | 111,752 |
CASH AND CASH EQUIVALENTS - end of period | 10,261,416 | 1,645,712 |
Cash paid during the period for: | ||
Interest | 224 | |
Income taxes | ||
Non-cash investing and financing activities: | ||
Common stock issued for prepaid services | 686,895 | |
Common stock issued for Exchange of Notes | 528,000 | |
Common stock issued for conversion of Redeemable Series A Preferred Stock | 400,000 | |
Increase in equity investments recorded as deferred revenue pursuant to a patent license agreement | 531,250 | |
Note receivable issued in connection with asset purchase agreement | $ 60,000 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization and Business [Abstract] | |
ORGANIZATION AND BUSINESS | NOTE 1 – ORGANIZATION AND BUSINESS Silo Pharma, Inc. (formerly Uppercut Brands, Inc.) (the “Company”) was incorporated in the State of New York on July 13, 2010 under the name Gold Swap, Inc. On January 24, 2013, the Company changed its state of incorporation from New York to Delaware. The Company is a developmental stage biopharmaceutical company focused on merging traditional therapeutics with psychedelic research. The Company seeks to acquire and/or develop intellectual property or technology rights from leading universities and researchers to treat rare diseases, including the use of psychedelic drugs, such as psilocybin, and the potential benefits they may have in certain cases involving depression, mental health issues and neurological disorders. The Company is focused on merging traditional therapeutics with psychedelic research for people suffering from indications such as depression, post-traumatic stress disorder (“PTSD”), Alzheimer’s, Parkinson’s, and other rare neurological disorders. The Company’s mission is to identify assets to license and fund the research which the Company’s believes will be transformative to the well-being of patients and the health care industry. The Company was engaged in the development of a streetwear apparel brand, NFID (see below). On October 4, 2013, the Company filed a Form N-54A and elected to become a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, the Company previously elected to be treated for federal income tax purpose as a regulated investment company, (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended, (the “Code”). Through September 29, 2018, the Company met the definition of RIC in accordance with the guidance under Accounting Standards Codification (“ASC”) Topic 946 “Financial Services – Investment Companies”. On September 29, 2018, the Company filed Form N-54C, Notification of Withdrawal of Election to be Subject to Section 55 through 65 of the 1940 Act, as the Company changed the nature of its business so as to cease to be a business development company (See Note 2 – Basis of Presentation). Additionally, since 2017, the Company has been subject to income taxes at corporate tax rates. On May 21, 2019, the Company filed an amendment to its Certificate of Incorporation with the State of Delaware to change its name from Point Capital, Inc. to Uppercut Brands, Inc. Thereafter, on September 24, 2020, the Company filed an amendment to its Certificate of Incorporation with the State of Delaware to change its name from Uppercut Brands, Inc. to Silo Pharma, Inc. On April 8, 2020, the Company incorporated a new wholly-owned subsidiary, Silo Pharma Inc., in the State of Florida. The Company has also secured the domain name www.silopharma.com. The Company has been exploring opportunities to expand the Company’s business by seeking to acquire and/or develop intellectual property or technology rights from leading universities and researchers to treat rare diseases, including the use of psychedelic drugs, such as psilocybin, and the potential benefits they may have in certain cases involving depression, mental health issues and neurological disorders. In July 2020, through the Company’s newly formed subsidiary, the Company entered into a commercial evaluation license and option agreement with University of Maryland, Baltimore (“UMB”) (see Note 9) pursuant to which, among other things, UMB granted the Company an exclusive, option to negotiate and obtain an exclusive, sublicensable, royalty-bearing license to with respect to certain technology. The option was extended and exercised on January 13, 2021. On February 12, 2021, the Company entered into a Master License Agreement with UMB (see Note 9). The Company plans to actively pursue the acquisition and/or development of intellectual property or technology rights to treat rare diseases, and to ultimately expand the Company’s business to focus on this new line of business. On September 30, 2021, the Company entered into and closed on an Asset Purchase Agreement (the “Asset Purchase Agreement) with NFID, LLC, a Florida limited liability company (the “Buyer”), whereby the Buyer purchased from the Company certain assets, properties, and rights in connection with the Company’s NFID trademark name, logos, domain, and apparel clothing and accessories for a purchase price of $60,000 in the form of a promissory note amounting to $60,000. The promissory note bears 8% interest per annum and matures on October 1, 2023. Accordingly, the results of operations of this component, for all periods presented, are separately reported as “discontinued operations” on the condensed consolidated statements of operations (see Note 4). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring and non-recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 29, 2021. In accordance with, ASC 205-20 “Discontinued Operations” establishes that the disposal or abandonment of a component of an entity or a group of components of an entity should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. As a result, the component’s results of operations have been classified as discontinued operations on a retrospective basis for all periods presented. Accordingly, the results of operations of this component, for all periods, are separately reported as “discontinued operations” on the condensed consolidated statements of operations. Going Concern These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had a cash used in operations of $1,504,145 for the nine months ended September 30, 2021. Additionally, the Company had an accumulated deficit of $2,173,891 at September 30, 2021 and has generated minimal revenues under its new business plan. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional capital pursuant to debt or equity financings. The Company may seek to raise additional capital through additional debt and/or equity financings to fund its operations in the future; however, no assurance can be provided that the Company will be able to raise additional capital on favorable terms, or at all. If the Company is unable to raise additional capital or secure additional lending in the future to fund its business plan, the Company may need to curtail or cease its operations. On February 9, 2021, the Company entered into securities purchase agreements with certain institutional and accredited investors pursuant to which it sold an aggregate of 4,276 shares of its newly designated Series C Convertible Preferred Stock and warrants to purchase up to 14,253,323 shares of it ss common stock for gross proceeds of approximately $4,276,000, before deducting placement agent and other offering expenses. The closing of the offering occurred on February 12, 2021 (See Note 7). Additionally, the Company received proceeds from sale of its equity investments for $6,736,070 in September 2021 (see Note 3). These unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the nine months ended September 30, 2021 and 2020 include the collectability of notes receivable, the valuation of the Company’s equity investments, estimates for obsolete and slow-moving inventory, estimates of the deemed dividend, valuation allowances for deferred tax assets, the fair value of warrants issued with debt and for services, and the fair value of shares issued for services and in settlements. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 or by the Securities Investor Protection Corporation up to $250,000. To reduce its risk associated with the failure of such financial institutions, the Company evaluates, at least annually, the rating of the financial institutions in which it holds deposits. At September 30, 2021 and December 31, 2020, the Company had cash in excess of FDIC limits of approximately $9.8 million, and approximately $880,000, respectively. Notes Receivable The Company recognizes an allowance for losses on notes receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current note receivable aging, and expected future write-offs, as well as an assessment of specific identifiable accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets - current of $220,590 and $241,091 at September 30, 2021 and December 31, 2020, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses and other current assets – non-current of $28,118 and $0 at September 30, 2021 and December 31, 2020, respectively, consist primarily of costs paid for license fees and future services which will occur after a year. Prepaid expenses may include prepayments in cash and equity instruments for consulting, business advisory, legal services, license fees, research and development fees, and insurance which are being amortized over the terms of their respective agreements. Equity Investments, at Fair Value Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company’s carrying value and the net proceeds received from such disposition. Realized gains and losses on investment transactions are determined by specific identification. Net unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment. Net unrealized gains or losses for equity investments are recognized in operations as the difference between the carrying value at the beginning of the period and the fair value at the end of the period. Equity Investments, at Cost Equity investments, at cost are comprised mainly of non-marketable capital stock and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. Revenue Recognition The Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts. For the license and royalty income, revenue is recognized when the Company satisfies the performance obligation based on the related license agreement. Payments received from the licensee that are related to future periods are recorded as deferred revenue to be recognized as revenues over the term of the related license agreement (see Note 9). Product sales were recognized when the NFID products were shipped to the customer and title was transferred and were recorded net of any discounts or allowances which are separately reported as “discontinued operations” on the condensed consolidated statements of operations. Cost of Revenues The primary components of cost of revenues on license fees included the cost of the license fees. Payments made to the licensor that are related to future periods are recorded as prepaid expense to be amortized over the term of the related license agreement (see Note 9). The primary components of cost of revenues on NFID apparel include the cost of the product, production costs, warehouse storage costs and shipping fees which are separately reported as “discontinued operations” on the condensed consolidated statements of operations. Stock-based Compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation – Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under Accounting Standards Update (“ASU”) 2016-09 Improvements to Employee Share-Based Payment. Income Taxes Deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company follows the provisions of Financial Accounting Standards Board (“FASB”) ASC 740-10, “Uncertainty in Income Taxes”. Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. The Company does not believe it has any uncertain tax positions as of September 30, 2021 and December 31, 2020 that would require either recognition or disclosure in the accompanying unaudited condensed consolidated financial statements. The Company recognized income tax expense of $19,133 for the nine months ended September 30, 2021. Research and development In accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred. During the nine months ended September 30, 2021 and 2020, research and development costs were $217,962 and $0, respectively. During the three months ended September 30, 2021 and 2020, research and development costs were $70,514 and $0, respectively. Net Income (Loss) per Common Share Basic loss per share is computed by dividing net loss allocable to common shareholders by the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period using the as-if converted method. Potentially dilutive securities which included convertible preferred shares and stock options are excluded from the computation of diluted shares outstanding if they would have an anti-dilutive impact on the Company’s net losses. The following are the potentially dilutive shares for the nine months ended September 30, 2021 and 2020: September 30, September 30, Series A convertible preferred stock - - Series B convertible preferred stock - - Series C convertible preferred stock 756,667 - Stock options 300,000 300,000 Warrants 17,353,987 - The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share (“EPS”) calculations. Three months Three months Nine months Nine months Numerator: Net income (loss) $ 6,385,119 $ (633,795 ) $ 3,588,430 $ (2,316,703 ) Denominator: Weighted-average shares of common stock 98,636,970 84,416,681 93,594,877 59,512,252 Dilutive effect of convertible instruments 1,056,513 - 1,056,513 - Diluted weighted-average of common stock 99,693,483 41,653,825 94,651,390 80,631,207 Net income (loss) per common share from: Basic $ 0.06 $ (0.01 ) $ 0.04 $ (0.04 ) Diluted 0.06 (0.01 ) 0.04 (0.04 ) Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to recognize a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The pronouncement requires a modified retrospective method of adoption and was effective on January 1, 2019, with early adoption permitted. For the Company’s administrative office lease, the Company analyzed if it would be required to record a lease liability and a right-of-use asset on its condensed consolidated balance sheets at fair value upon adoption of ASU 2016-02. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. New Accounting Pronouncements Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS The Company follows ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments. Equity investments, at fair value The Company accounted for certain equity investments at fair value using level 1, level 2 and level 3 valuations. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2021 and December 31, 2020: At September 30, 2021 (Unaudited) At December 31, 2020 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Equity investments, at fair value $ 820,126 $ — $ — $ — — $ — ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. At September 30, 2021, equity investments, at fair value consisted of common equity securities of two entities, including AIkido Pharma, Inc. (see Note 9). Equity investments are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments, at fair value for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. For the nine months ended September 30, 2021, we recorded a net realized gain on equity investments of $6,655,120 primarily attributed to a gain from the sale of the Company’s equity investment in DatChat, Inc. and Aikido Pharma, Inc. The following are the Company’s equity investments, at fair value owned by levels within the fair value hierarchy at September 30, 2021: Level 1 Level 2 Level 3 Total Common Stock $ 820,126 $ — $ — $ 820,126 Total Investments $ 820,126 $ — $ — $ 820,126 The following table summarizes activity in the Company’s equity investments, at fair value for the periods presented: September 30, December 31, Balance, beginning of period $ — $ — Additions 531,250 — Sales (80,750 ) — Unrealized gain 369,626 — Balance, end of period $ 820,126 $ — At September 30, 2021and December 31, 2020, equity investments, at fair value consisted of the following components: September 30, December 31, Equity investments, at original cost $ 450,500 $ — Gross unrealized appreciation 369,626 — Equity investments, at fair market value $ 820,126 $ — Equity Investments, at Cost At September 30, 2021 and December 31, 2020, equity investments, at cost of $0 and $200, respectively, comprised mainly of non-marketable capital stock and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. |
Disposal of the Discontinued Op
Disposal of the Discontinued Operations of the Nfid Business | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSAL OF THE DISCONTINUED OPERATIONS OF THE NFID BUSINESS | NOTE 4 – DISPOSAL OF THE DISCONTINUED OPERATIONS OF THE NFID BUSINESS On September 30, 2021, the Company entered into and closed on an Asset Purchase Agreement (see Note 1) with NFID, LLC, an unrelated party, a Florida limited liability company, whereby the Company sold certain assets, properties, and rights in connection with its NFID trademark name, logos, domain, and apparel clothing and accessories for a purchase price of $60,000 in the form of a promissory note amounting to $60,000. The promissory note bears 8% interest per annum and matures on October 1, 2023. Note receivable – non-current amounted to $60,000 as of September 30, 2021. ASC 205-20 “Discontinued Operations” establishes that the disposal or abandonment of a component of an entity or a group of components of an entity should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. As a result, the component’s results of operations have been classified as discontinued operations on a retrospective basis for all periods presented. Accordingly, the results of operations of this component, for all periods, are separately reported as “discontinued operations” on the condensed consolidated statements of operations. As of September 30, 2021 and December 31, 2020, assets of discontinued operations amounted $0 and $33,484, respectively, which primarily consisted of NFID inventory. The following table set forth the selected financial data of the Company’s gain from sale of the NFID business for the three and nine months ended September 30, 2021. September 30, Assets: Current assets: Inventory, net $ 58,447 Total assets $ 58,447 Liabilities: Current liabilities: Total liabilities $ - Carrying value of NFID business on date of sale $ 58,447 Total consideration (60,000) Net gain from sale of NFID business $ 1,553 The summarized operating result of discontinued operations of the NFID Business included in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 is as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Product sales, net $ 39,236 $ 16,285 $ 119,541 $ 18,795 Cost of sales 30,637 29,450 98,998 30,866 Gross profit (loss) 8,599 (13,165 ) 20,543 (12,071 ) Total operating and other non-operating expenses (97,471 ) (64,162 ) (249,565 ) (170,058 ) Gain from sale of NFID business 1,553 - 1,553 - Loss from discontinued operations $ (87,319 ) $ (77,327 ) $ (227,469 ) $ (182,129 ) |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
NOTES RECEIVABLE | NOTE 5 – NOTES RECEIVABLE On September 28, 2018, the Company and Blind Faith Concepts Holdings, Inc. (the “Seller”) executed a two-year promissory note receivable agreement with a principal balance of $200,000 of which $100,000 was funded to the Seller in September 2018 and the remaining $100,000 was funded in October 2018. The promissory note accrued interest at a rate of 6% per annum, and the Company was repaid in interest only payments on a quarterly basis, until the maturity date of September 27, 2020, at which time the full principal and any interest payments was due to the Company. At the time the promissory note receivable agreement was executed, the Company also executed a security interest and pledge agreement with the borrower pursuant to which the borrower pledged all of the assets of its company as security for the performance of the note obligations. On November 2, 2018, the Company and Seller entered into a promissory note agreement (“Promissory Note Agreement”) with a principal balance of $50,000. Pursuant to the Promissory Note Agreement, the $50,000 note was a deposit and credit towards the acquisition of the assets of Lust for Life Group such as inventory, trademarks and logos. Pursuant to the Promissory Note Agreement, since the purchase did not close within 30 days from date of the Promissory Note, the note receivable became immediately due. Through the date of default, the outstanding principal balance accrued interest at an interest rate of 10% per annum payable on a monthly basis. Upon default, the interest rate increased to 18% per annum. As of December 31, 2018, the Company determined that this note receivable was doubtful and accordingly, recorded an allowance for doubtful account and bad debt expense of $50,000. In December 2019, pursuant to claim purchase agreements (“Claim Purchase Agreements”), the Company sold its notes receivable and related interest receivable balances in the aggregate amount of $277,305 to an investor. Pursuant to the Claim Purchase Agreements, the investor agreed to pay the Company the purchase price of $277,305 on the earlier of the payment of six-monthly installments or upon the liquidation of settlement securities of the Seller pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. The first installment was be made following entry and full effectuation of a court order approving the settlement of the claim which occurred on March 6, 2020 in the United States District Court for the District of Maryland Northern Division. Additionally, on January 6, 2020, the Company and the Seller entered into a settlement agreement related to notes receivable. In lieu of the Company seeking default and foreclosure against the Seller pursuant to the note agreements, the Company received 10,420 shares of the Seller’s convertible Series B Preferred Stock. Since the shares of Series B Preferred Stock have limited marketability, no value was placed on these shares. Between April 2020 and December 2020, the Company collected an aggregate of $30,000 on the notes receivable balance. During the year ended December 31, 2020, the Company recorded a total allowance for doubtful account and bad debt expense of $174,376 (consisting of the principal balance of $146,500 and interest receivable of $27,876) due to slow collection of the installment payments pursuant to the Claim Purchase Agreements. During the nine months ended September 30, 2021 and the year ended December 31, 2020, the Company recorded $7,500 and $9,000 to bad debt recovery for cash payment received on an older note receivable that was previously written off prior to 2019. On March 10, 2021, the Company collected $23,500 related to this note receivable. On June 7, 2021, the Company and the investor, entered into a settlement agreement whereby both parties agreed to settle the remaining balance of this note receivable which was previously written off in year 2020 for a total settlement amount of $196,000 to be paid as follows i) an initial payment of $46,000 upon execution of the settlement agreement and ii) $10,000 per month for fifteen months. Between June 9, 2021 and September 7, 2021, the Company collected a total of $76,000 and accordingly reduced the allowance for doubtful accounts against bad debt recovery for cash payment received. On September 30, 2021, the Company executed a note receivable agreement with NFID, LLC in connection with an Asset Purchase Agreement (see Note 4). The promissory note bears 8% interest per annum and matures on October 1, 2023. Note receivable – non-current amounted to $60,000 as of September 30, 2021. As of September 30, 2021 and December 31, 2020, notes receivable, net, consisted of the following: September 30, December 31, Principal amounts of notes receivable $ 280,000 $ 250,000 Collections on notes receivables (107,000 ) (30,000 ) Less: allowance for doubtful accounts (113,000 ) (196,500 ) Less: notes receivable, net – current portion — (23,500 ) Notes receivable – non-current $ 60,000 $ — |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE | NOTE 6 - NOTE PAYABLE Paycheck Protection Program Funding On April 30, 2020, the Company received federal funding in the amount of $18,900 through the Paycheck Protection Program (the “PPP”). PPP funds had certain restrictions on use of the funding proceeds, and generally must be repaid within two years and accrued interest at a rate of 1% per annum. The PPP loan may, under circumstances, be forgiven. No payment was due by the Company during the nine months period beginning on the date of this note (“Deferral Period”). Commencing one month after the expiration of the Deferral Period, the Company was to pay the lender monthly payments of principal and interest, each in equal amount required to fully amortize by the maturity date. If a payment on this note was more than ten days late, the lender would charge a late fee of up to 5% of the unpaid portion of the regularly scheduled payment. As of December 31, 2020, the principal balance of this note amounted to $18,900 and accrued interest of $174. During the nine months ended September 30, 2021, the Company recognized $54 of interest expense. In April 2021, the Company was notified by the Small Business Administration that the principal and accrued interest under the PPP loan has been forgiven in full. Accordingly, the Company recorded the principal balance of $18,900 and accrued interest of $182 to gain on forgiveness of PPP note payable during the nine months ended September 30, 2021. As of As of Principal amount $ - $ 18,900 Less: current portion - (14,654 ) Note payable - long term portion $ - $ 4,246 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7 – STOCKHOLDERS’ EQUITY Preferred stock The Company has authorized the issuance of 5,000,000 shares of preferred stock, $0.0001 par value. The Company’s board of directors is authorized, at any time, and from time to time, to provide for the issuance of shares of preferred stock in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the preferred stock or any series thereof. In April 2013, 1,000,000 shares of preferred stock were designated as Series A Convertible Preferred Stock, and in November 2019, 2,000 shares of preferred stock were designated as Series B Convertible Preferred Stock. Certificate of Designation of Series C Convertible Preferred Stock On February 9, 2021, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (the “Certificate of Designations”) with the Delaware Secretary of State, designating 4,280 shares of preferred stock as Series C Convertible Preferred Stock. Designation Dividends . Liquidation Voting Rights Conversion Forced Conversion Exercisability . Series C Convertible Preferred Stock Financing On February 9, 2021 (the “Effectiveness Date”), the Company entered into securities purchase agreements (collectively, the “Series C Purchase Agreements”) with certain institutional and accredited investors for the sale of an aggregate of 4,276 shares of the Company’s Series C Convertible Preferred Stock and warrants (the “February Warrants”) to purchase up to 14,253,323 shares (the “February Warrant Shares”) of the Company’s common stock for gross proceeds of approximately $4,276,000, before deducting placement agent and other offering expenses of $481,898 which are offset against the proceeds in additional paid in capital. The offering closed on February 12, 2021. Accordingly, the Company recognized a total deemed dividend of $1,403,997 for the beneficial conversion feature in connection with the issuance of these Series C Convertible Preferred Stock. The February Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.30 per share. If, after a period of 180 days after the date of issuance of the February Warrants, a registration statement covering the resale of the February Warrant Shares is not effective, the holders may exercise the February Warrants by means of a cashless exercise. The Series C Convertible Preferred Stock and the February Warrants each contain a beneficial ownership limitation that restricts each of the investor’s ability to exercise the February Warrants and convert the Series C Convertible Preferred Stock such that the number of shares of the Company common stock held by each of them and their affiliates after such conversion or exercise does not exceed 4.99% (or, at the election of the Investor, 9.99%) of the Company’s then issued and outstanding shares of common stock. The Series C Purchase Agreement also provides that until the 18 month anniversary of the Effectiveness Date, in the event of a subsequent financing (except for certain exempt issuances as provided in the Series C Purchase Agreement) by the Company, each investor will have the right to participate in such subsequent financing up to an amount equal to the investor’s proportionate share of the subsequent financing based on such investor’s participation in the offering on the same terms, conditions and price provided for in the subsequent financing up to an amount equal to 50% of the subsequent financing. In addition, pursuant to the Series C Purchase Agreement, the Company has agreed that neither it nor its subsidiaries will enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents to file any registration statement other than as contemplated pursuant to the Registration Rights Agreement (as defined below) for a period of 90 days from the Effectiveness Date. Furthermore, subject to certain exceptions, the Company is prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents involving a Variable Rate Transaction (as defined in the Series C Purchase Agreement). In connection with the offering, the Company entered into separate registration rights agreements (“Registration Rights Agreements”) with the investors pursuant to which the Company agreed to undertake to file a registration statement (the “Registration Statement”) to register the resale of the Registrable Securities (as defined in the Registration Rights Agreement) within ten calendar days following the Effectiveness Date. The Company agreed to use its best efforts to cause the Registration Statement covering the Registrable Securities to be declared effective no later than the 60 th th In addition, pursuant to the terms of the offering, the Company issued Bradley Woods & Co, Ltd. and Katalyst Securities LLC warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of 2,850,664 shares of common stock, or 10% of the shares of common stock issuable upon conversion of the Series C Preferred Stock and February Warrant Shares sold in the offering. The Placement Agent Warrants are exercisable for a period of five years from the closing date of the offering at an exercise price of $0.35 per share, subject to adjustment. The Placement Agent Warrants were valued at the grant date using a Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 0.50%, expected dividend yield of 0%, expected term of 5 years using the simplified method and expected volatility of $169% based on comparable and calculated volatility. The aggregate grant date fair value of these Placement Agent Warrants amounted to approximately $1,106,000 and was recorded against the proceeds with no net effect on the consolidated financials. The net proceeds of the offering are expected to be used for working capital purposes and to further execute on the Company’s existing business. Conversion of Series C Convertible Preferred Stock On April 12, 2021, the Company notified holders of its Series C Convertible Preferred Stock of its election to force the conversion to its Series C Convertible Preferred Stock into shares of the Company’s common stock pursuant to the Certificate of Designations unless such conversion would cause the holder to exceed its beneficial ownership limitation pursuant to the Certificate of Designations. On April 14, 2021, the Company converted 4,049 Series C Convertible Preferred Stock into 13,495,014 shares of common stock. Currently, there are 227 shares of the Company’s Series C Convertible Preferred Stock which remain outstanding. Common stock Increase in Authorized Shares On March 10, 2021, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State of Delaware to increase the authorized number of shares of common stock of the Company from 100,000,000 shares to 500,000,000 shares. Stock options On January 18, 2021, the board of directors (“Board of Directors” or “Board”) of the Company approved the Silo Pharma, Inc. 2020 Omnibus Equity Incentive Plan (the “Plan”) to incentivize employees, officers, directors and consultants of the Company and its affiliates. 8,500,000 shares of common stock are reserved and available for issuance under the Plan , provided that certain exempt awards (as defined in the Plan), shall not count against such share limit. The Plan provides for the grant, from time to time, at the discretion of the Company’s Board or a committee thereof, of cash, stock options, including incentive stock options and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation units and other stock or cash-based awards. The Plan shall terminate on the tenth anniversary of the date of adoption by the Board of Directors. Subject to certain restrictions, the Board of Directors may amend or terminate the Plan at any time and for any reason. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, rules or regulations. On March 10, 2021, the stockholders of the Company approved the Plan. Stock option activities for the nine months ended September 30, 2021 are summarized as follows: Number Weighted Weighted Aggregate Balance Outstanding, December 31, 2020 300,000 $ 0.0001 3.5 74,970 Granted/issued — — — — Forfeited — — — — Balance Outstanding, September 30, 2021 300,000 $ 0.0001 2.79 $ 58,470 Exercisable, September 30, 2021 300,000 $ 0.0001 2.79 $ 58,470 Warrants Warrant activities for the nine months ended September 30, 2021 are summarized as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Balance Outstanding, December 31, 2020 — — — — Granted 17,353,987 0.31 5.00 — Forfeited — — — — Balance Outstanding, September 30, 2021 17,353,987 $ 0.31 4.37 $ — Exercisable, September 30, 2021 17,353,987 $ 0.31 4.37 $ — On January 18, 2021, the Company granted warrants to purchase up to 250,000 shares of the Company’s common stock in exchange for legal services rendered. The warrants have a term of five years from the date of grant and are exercisable at an exercise price of $0.20 per share. The warrants were valued on the grant date at approximately $0.33 per warrant for a total of $83,728 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.35 per share (based on the quoted trading price on the date of grant), volatility of 169%, expected term of five year, and a risk-free interest rate of 0.46%. During the nine months ended September 30, 2021, the Company recorded stock-based compensation of $83,728. On February 9, 2021, the Company entered into pursuant to securities purchase agreements with certain investors pursuant to which it sold warrants to purchase up to 14,253,323 shares of the Company’s common stock and 4,276 shares of the Company’s Series C Convertible Preferred Stock. The February Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.30 per share, subject to adjustment. If, after a period of 180 days after the date of issuance of the February Warrants, a registration statement covering the resale of the February Warrant Shares is not effective, the holders may exercise the February Warrants by means of a cashless exercise. In addition, pursuant to the terms of the offering, the Company issued the Placement Agent Warrants to purchase up to an aggregate of 2,850,664 shares of common stock to its placement agents, or 10% of the shares of common stock issuable upon conversion of the Series C Preferred Stock and February Warrant Shares sold in the offering. The Placement Agent Warrants are exercisable for a period of five years from the closing date of the offering at an exercise price of $0.35 per share, subject to adjustment (see Series C Convertible Preferred Stock Financing above). Such warrants issued to various investors and to the placement agents were recorded as additional paid in capital with an offsetting debit applied against additional paid in capital, thus these warrants have no further accounting effect within the equity section. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 8 – CONCENTRATIONS Customer concentration For the nine months ended September 30, 2021, one licensee accounted for 100% of total revenues related to the Company’s biopharmaceutical operation as compared to no licensees for the nine months ended September 30, 2020. For the nine months ended September 30, 2021 and 2020, no customer accounted for over 10% of total revenues from apparel sales included in discontinued operations. Vendor concentrations For the nine months ended September 30, 2021, one licensor accounted for 100% of the Company’s vendor license agreements (see below) related to the Company’s biopharmaceutical operation as compared to no licensor for the nine months ended September 30, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES Employment Agreement On April 17, 2020, the Company entered into an employment agreement (“Employment Agreement”) with the Company’s Chief Executive Officer (“CEO”) pursuant to which CEO will serve as Chief Executive Officer and Chief Financial Officer of the Company. The term of the Employment Agreement will continue for a period of one year from the date of execution date thereof and automatically renews for successive one-year periods at the end of each term until either party delivers written notice of their intent not to review at least six months prior to the expiration of the then effective term. Pursuant to the terms of the Employment Agreement, the CEO was granted 7,630,949 vested shares of the Company’s common stock in April 2020, and the CEO’s base salary was increased to $120,000. In addition, the CEO shall be eligible to earn a bonus, subject to the sole discretion of the Company’s Board. On January 18, 2021, the Company entered into an amendment (the “Amendment”) to the Employment Agreement, effective as of January 1, 2021, pursuant to which the CEO’s base salary was increased from $120,000 per year to $180,000 per year. The Employment Agreement may be terminated by either the Company or CEO at any time and for any reason upon 60 days prior written notice. Upon termination of the Employment Agreement, the CEO shall be entitled to (i) any equity award that has vested prior to the termination date, (ii) reimbursement of expenses incurred on or prior to such termination date and (iii) such employee benefits to which the CEO may be entitled as of the termination date (collectively, the “Accrued Amounts”). The Employment Agreement shall also terminate upon CEO’s death or the Company may terminate the CEO’s employment upon his disability (as defined in the Employment Agreement). Upon the termination of the CEO’s employment for death or disability, the CEO shall be entitled to receive the Accrued Amounts. The Employment Agreement also contains covenants prohibiting the CEO from disclosing confidential information with respect to the Company. Vendor License Agreements Commercial Evaluation License and Option Agreement with the University of Baltimore, Maryland Effective as of July 15, 2020, through the Company’s wholly-owned subsidiary, Silo Pharma, Inc. (see Note 1), the Company entered into a commercial evaluation license and option agreement with UMB pursuant to which UMB has granted the Company an exclusive, non-sublicensable, non-transferable license to with respect to the exploration of the potential use of central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology. In addition, UMB granted the Company an exclusive, option to negotiate and obtain an exclusive, sublicensable, royalty-bearing license to with respect to the subject technology. This agreement originally was set to expire six months from July 15, 2020 but was extended and exercised on January 13, 2021. Both parties may terminate this agreement within thirty days by giving a written notice. In July 2020, the Company paid the license fee of $10,000 to UMB pursuant to this agreement which was recorded in professional fees during the year ended December 31, 2020 since the Company could not conclude that such costs would be recoverable for this early-stage venture. On February 12, 2021, the Company entered into the Master License Agreement with UMB. On February 26, 2021, through the Company’s wholly-subsidiary, Silo Pharma, Inc., the Company entered into a commercial evaluation license and option agreement with UMB pursuant to which UMB has granted the Company an exclusive, non-sublicensable, non-transferable license to with respect to the exploration of the potential use of joint-homing peptides for use in the investigation and treatment of arthritogenic processes. In addition, UMB granted the Company an exclusive, option to negotiate and obtain an exclusive, sublicensable, royalty-bearing license to with respect to the subject technology. This agreement was to expire six months from February 26, 2021, unless sooner terminated. Both parties may terminate this agreement within thirty days by giving a written notice. On July 6, 2021, the Company entered into a First Amendment Agreement with UMB pursuant to which the term of the agreement was extended by 6 months such that the agreement shall terminate on February 25, 2022 unless earlier terminated pursuant to the terms thereof; however, if the Company exercises the option, the agreement will expire at the end of the negotiation period (as defined in the agreement) or upon execution of a master license agreement, whichever occurs first. Pursuant to the agreement, the Company paid the license fee of $10,000 to UMB in March 2021 pursuant to this agreement which was recorded in professional fees during the nine months ended September 30, 2021 since the Company could not conclude that such costs would be recoverable for this early-stage venture. Master License Agreement with the University of Baltimore, Maryland On February 12, 2021 (the “Master License Agreement Effective Date”), the Company entered into the Master License Agreement (the “Master License Agreement”) with UMB pursuant to which UMB granted the Company an exclusive, worldwide, sublicensable, royalty-bearing license to certain intellectual property (i) to make, have made, use, sell, offer to sell, and import certain licensed products and (ii) to use the invention titled, “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology” and UMB’s confidential information to develop and perform certain licensed processes for the therapeutic treatment of neuroinflammatory disease. Pursuant to the Master License Agreement, the Company shall pay UMB (i) a license fee (ii) certain event-based milestone payments, (iii) royalty payments depending on net revenues, and (iv) a tiered percentage of sublicense income. The Company shall pay to UMB a license fee of $75,000, payable as follows: (a) $25,000 shall be due within 30 days following the Master License Agreement Effective Date; and (b) $50,000 on or before the first anniversary of the Master License Agreement Effective Date. The license fee is non-refundable, and is not creditable against any other fee, royalty, or payment. The Company shall be responsible for payment of all patent expenses in connection with preparing, filing, prosecution and maintenance of patents or patent applications relating to the patent rights. The Company paid the $25,000 license fee on February 17, 2021 which was recorded in prepaid expenses to be amortized over the 15-year term. The Company recognized amortization expense of $3,125 during the nine months ended September 30, 2021. At September 30, 2021, prepaid expense and other current assets – current amounted $5,000 and prepaid expenses – non-current amounts $16,875 as reflected in the accompanying condensed consolidated balance sheets. Additionally, the Company agreed to pay certain royalty payments as follows: (i) 3% on sales of Licensed Products (as defined in the Master License Agreement) during the applicable calendar year for sales less than $50,000,000; and (ii) 5% on sales of Licensed Products during the applicable calendar year for sales greater than $50,000,000; and Furthermore, the Company agreed to pay UMB minimum royalty payments, as follows: Payment Year $ - Prior to First Commercial Sale $ - Year of First Commercial Sale $ 25,000 First calendar year following the First Commercial Sale $ 25,000 Second calendar year following the First Commercial Sale $ 100,000 Third calendar year following the First Commercial Sale Furthermore, the Company agrees to pay milestone payments, as follows: Payment Milestone $ 50,000 Filing of an Investigational New Drug (or any foreign equivalent) for a Licensed Product $ 100,000 Dosing of first patient in a Phase 1 Clinical Trial of a Licensed Product $ 250,000 Dosing of first patient in a Phase 2 Clinical Trial of a Licensed Product $ 500,000 Receipt of New Drug Application (“NDA”) (or foreign equivalent) approval for a Licensed Product $ 1,000,000 Achievement of First Commercial Sale of Licensed Product The Company shall pay to UMB a percentage of all sublicense income which is receivable by Company or Company affiliates as follows: (a) 25% of sublicense income which is receivable with respect to any sublicense that is executed before the filing of an NDA (or foreign equivalent) for the first licensed product; and (b) 15% of sublicense income which is receivable with respect to any sublicense that is executed after the filing of an NDA (or foreign equivalent) for the first licensed product. The Master License Agreement will remain in effect on a Licensed Product-by-Licensed Product basis and country-by-country basis until the later of: (a) the last patent covered under the Master License Agreement expires, (b) the expiration of data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity, if applicable, or (c) 10 years after the first commercial sale of a Licensed Product in that country, unless earlier terminated in accordance with the provisions of the Master License Agreement. The term of the Master License Agreement shall expire 15 years after the Master License Agreement Effective Date in which (a) there were never any patent rights, (b) there was never any data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity or (c) there was never a first commercial sale of a Licensed Product. In connection with the Sublicense Agreement with Aikido (see below), in April 2021, the Company paid $12,500, or 25% of sublicense income to UMB pursuant to the Master License Agreement. The Company recognized amortization expense of $210 and $419 during the three and nine months ended September 30, 2021, respectively. At September 30, 2021, prepaid expense and other current assets – current amounted $838 and prepaid expenses – non-current amounts $11,243 as reflected in the accompanying condensed consolidated balance sheets. Customer License Agreements Patent License Agreement with AIkido Pharma Inc. On January 5, 2021, the Company entered into a patent license agreement (the “Agreement”) with Silo Pharma, Inc., a Florida corporation and wholly-owned subsidiary of the Company (collectively, the “Licensor”) and AIkido Pharma Inc. (“AIkido”), as amended on April 12, 2021, pursuant to which the Licensor granted AIkido an exclusive, worldwide (the “Territory”), sublicensable, royalty-bearing license to certain intellectual property (i) to make, have made, use, provide, import, export, lease, distribute, sell, offer for sale, develop and advertise certain licensed products and (ii) to develop and perform certain licensed processes for the treatment of cancer and symptoms caused by cancer (the “Field of Use”). In addition, the Agreement also provided that, if the Licensor exercised the option granted to it pursuant to its commercial evaluation license and option agreement with UMB, effective as of July 15, 2020, it would grant AIkido a non-exclusive sublicense (the “Right”) to certain UMB patent rights in the field of neuroinflammatory diseases occurring in patients diagnosed with cancer (the “Field”). Pursuant to the Agreement, AIkido agreed to pay the Licensor, among other things, (i) a one-time non-refundable cash payment of $500,000 and (ii) royalty payments equal to 2% of Net Sales (as defined in the Agreement) in the Field of Use in the Territory. In addition, AIkido agreed to issue the Licensor 500 shares of its newly designated Series M Convertible Preferred Stock which were to be converted into an aggregate of 625,000 shares of the AIkido’s common stock. On April 12, 2021, the Company entered into an amendment to the Patent License Agreement with AIkido dated January 5, 2021 whereby Aikido issued an aggregate of 625,000 restricted shares of Aikido’s common stock instead of the 500 shares of the Series M Convertible Preferred Stock. Pursuant to the Agreement, the Company is required to prepare file, prosecute, and maintain the licensed patents. Unless earlier terminated, the term of the license to the licensed patents will continue until the expiration or abandonment of all issued patents and filed patent applications within the licensed patents. The Company may terminate the Agreement upon 30 day written notice if AIkido fails to pay any amounts due and payable to the Company or if AIkido or any of its affiliates brings a patent challenge against the Company, assists others in bringing a legal or administrative challenge to the validity, scope, or enforceability of or opposes any of the licensed patents (“Patent Challenge”) against the Company (except as required under a court order or subpoena). AIkido may terminate the Agreement at any time without cause, and without incurring any additional penalty, (i) by providing at least 30 days’ prior written notice and paying the Company all amounts due to it through such termination effective date. Either party may terminate the Agreement for material breaches that have failed to be cured within 60 days after receiving written notice. The Company collected the non-refundable cash payment of $500,000 on January 5, 2021 which was recorded in deferred revenues to be recognized as revenues over the term of the Agreement. With respect to a vote of AIkido’s stockholders to approve a reverse split of its common stock no later than December 31, 2021 only (“Reverse Stock Split Vote”), each share of the Series M Convertible Preferred Stock shall be entitled to such number of votes equal to 20,000 shares of AIkido’s common stock. In addition, each share of the Series M Convertible Preferred Stock shall be convertible, at any time after the earlier of (i) the date that the Reverse Stock Split Vote is approved by AIkido’s stockholders and (ii) December 31, 2021, at the option of the holder, into such number of shares of AIkido’s common stock determined by dividing the Stated Value by the Conversion Price. “Stated Value” means $1,000. “Conversion Price” means $0.80, subject to adjustment. The Company valued the 500 Series M Convertible Preferred stock which was equivalent into AIkido’s 625,000 shares of common stock at a fair value of $0.85 per common share or $531,250 based quoted trading price of AIkido’s common stock on the date of grant. The Company recorded an equity investment of $531,250 (see Note 3) and deferred revenue of $531,250 to be recognized as revenues over the term of the license. Accordingly, the Company recorded a total deferred revenue of $1,031,250 ($500,000 cash received and $531,250 value of securities received) to be recognized as revenues over the 15-year term. The Company recognized revenues of $17,188 and $51,562 during the three and nine months ended September 30, 2021, respectively. At September 30, 2021, deferred revenue – current portion amounted $68,750 and deferred revenue – long-term portion amounted $910,937 as reflected in the accompanying condensed consolidated balance sheets. The Right shall be to the full extent permitted by and on terms and conditions required by UMB for a term consistent with the term of patent and technology licenses that UMB normally grants. In the event that the Company exercises its option and executes a license with UMB to the UMB patent rights within 40 days after the execution of such UMB license, for consideration to be agreed upon and paid by AIkido, which consideration shall in no event exceed 110% of any fee payable by the Company to UMB for the right to sublicense the UMB patent rights. The Company shall grant AIkido a nonexclusive sublicense in the United States to the UMB patent rights in the Field, subject to the terms of any UMB license Licensor obtains, including any royalty obligations on sublicensees required under any such sublicense. The option was exercised on January 13, 2021. Accordingly, on April 6, 2021, the Company entered into the Sublicense Agreement with AIkido pursuant to which it granted AIkido a worldwide exclusive sublicense to its licensed patents under the Master License Agreement. Sublicense Agreement with AIkido Pharma Inc. On April 6, 2021 (the “Sublicense Agreement Effective Date”), the Company entered into the Sublicense Agreement with AIkido pursuant to which the Company granted AIkido an exclusive worldwide sublicense to (i) make, have made, use, sell, offer to sell and import the Licensed Products (as defined below) and (ii) in connection therewith to (A) use an invention known as “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology” which was sublicensed to the Company pursuant to the Master License Agreement and (B) practice certain patent rights (“Patent Rights”) for the therapeutic treatment of neuroinflammatory disease in cancer patients. “Licensed Products” means any product, service, or process, the development, making, use, offer for sale, sale, importation, or providing of which: (i) is covered by one or more claims of the Patent Rights; or (ii) contains, comprises, utilizes, incorporates, or is derived from the Invention or any technology disclosed in the Patent Rights. Pursuant to the Sublicense Agreement, AIkido agreed to pay us (i) an upfront license fee of $50,000, (ii) the same sales-based royalty payments that the Company is subject to under the Master License Agreement and (iii) total milestone payments of up to $1.9 million. The Sublicense Agreement shall continue on a Licensed Product-by-Licensed Product and country-by-country basis until the later of (i) the date of expiration of the last to expire claim of the Patent Rights covering such Licensed Product in such country, (ii) the expiration of data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity or other legally enforceable market exclusivity, if applicable and (iii) 10 years after the first commercial sale of a Licensed Product in that country, unless terminated earlier pursuant to the terms of the Sublicense Agreement. Furthermore, the Sublicense Agreement shall expire 15 years after the Sublicense Agreement Effective Date with respect to any country in which (i) there were never any Patent Rights, (ii) there was never any data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity or other legally enforceable market exclusivity with respect to a Licensed Product and (ii) there was never a commercial sale of a Licensed Product, unless such agreement is earlier terminated pursuant to its terms. The Company collected the upfront license fee of $50,000 in April 2021. The Company recognized revenues of $838 and $1,675 during the three and nine months ended September 30, 2021, respectively. At September 30, 2021, deferred revenue – current portion amounted $3,353 and deferred revenue – long-term portion amounted $44,972 as reflected in the accompanying condensed consolidated balance sheets. Sponsored Study and Research Agreements Investigator-Sponsored Study Agreement with Maastricht University of the Netherlands On November 1, 2020, the Company entered into an investigator-sponsored study agreement (the “Study Agreement”) with Maastricht University of the Netherlands. The research project is a clinical study to examine the effects of repeated low doses of psilocybin and lysergic acid diethylamide on cognitive and emotional dysfunctions in Parkinson’s disease and to understand its mechanism of action. The Study Agreement shall terminate on October 31, 2024, unless earlier terminated pursuant to the terms thereof. The Company shall pay a total fee of 433,885 Euros ($507,602 USD) exclusive of value added tax to be amortized over the four-year term and payment schedule as follows: Payment 1 86,777 Euros ($101,520 USD) Upon signing the Study Agreement and was paid in December 2020 2 86,777 Euros ($101,520 USD) Obtained approval from ethical committee 3 86,777 Euros ($101,520 USD) Data collection has commenced 4 130,166 Euros ($152,281 USD) First half of the participants are tested 5 43,885 Euros ($50,760 USD) Completion of data collection and delivery of final report In December 2020, the Company paid the first payment of $101,520 which was recorded to prepaid expense and other current assets – current of which approximately $22,318 was amortized in fiscal 2020. In September 2021, the Company notified Maastricht University of Netherlands for an early termination of this agreement. Maastricht University of Netherlands has not reached the second phase which is to obtain approval from ethical committee. The Company has no further obligation after the termination. The Company recognized remaining amortization expense of $107 and $79,202 during the three and nine months ended September 30, 2021, respectively. Investigator-Sponsored Study Agreement with UMB On January 5, 2021, the Company entered into an investigator-sponsored study agreement (the “Sponsored Study Agreement”) with the University of Maryland, Baltimore. The research project is a clinical study to examine a novel peptide-guided drug delivery approach for the treatment of multiple sclerosis (“MS”). More specifically, the study is designed to evaluate (1) whether MS-1-displaying liposomes can effectively deliver dexamethasone to the CNS and (2) whether MS-1-displaying liposomes are superior to plain liposomes, also known as free drug, in inhibiting the relapses and progression of experimental autoimmune encephalomyelitis. Pursuant to the Sponsored Study Agreement, the research shall commence on March 1, 2021 and will continue until substantial completion, subject to renewal upon mutual written consent of the parties. The total cost under the Sponsored Study Agreement shall not exceed $81,474 which is payable in two equal installments of $40,737 upon execution of the Sponsored Study Agreement and $40,737 upon completion of the project with an estimated project timeline of nine months. The Company paid $40,737 on January 13, 2021 which was recorded in prepaid expense to be amortized over the nine-month period. Currently, the project has not been completed due to the delays cause by the Covid-19 pandemic. The Company recognized amortization expense of $4,526 and $40,737 during the three and nine months ended September 30, 2021, respectively. Sponsored Research Agreement with The Regents of the University of California On June 1, 2021 (the “Effective Date”), the Company entered into a sponsored research agreement (the “Sponsored Research Agreement”) with The Regents of the University of California, on behalf of its San Francisco Campus (“UCSF”) pursuant to which UCSF shall conduct a study to examine psilocybin’s effect on inflammatory activity in humans to accelerate its implementation as a potential treatment for Parkinson’s Disease, chronic pain, and bipolar disorder. Pursuant to the Agreement, the Company shall pay UCSF a total fee of $342,850 to conduct the research over the two-year period. The Agreement shall be effective for a period of two years from the Effective Date, subject to renewal or earlier termination as set forth in the Sponsored Research Agreement. The Company paid the first payment of $40,000 pursuant to the payment schedule on the Sponsored Research Agreement on June 15, 2021 and another $40,000 on September 9, 2021 which were recorded to prepaid expense and other current assets – current to be amortized over the two-year period. The Company recognized amortization expense of $42,856 and $49,999 during the three and nine months ended September 30, 2021, respectively. Sponsored Research Agreement with University of Maryland, Baltimore On July 6, 2021, the Company entered into a sponsored research agreement (the “July 2021 Sponsored Research Agreement”) with UMB pursuant to which UMB shall evaluate the pharmacokinetics of dexamethasone delivered to arthritic rats via liposome. Pursuant to the terms of the July 2021 Sponsored Research Agreement, UMB granted the Company an option (the “Option”) to negotiate and obtain an exclusive license to any UMB Arising IP (as defined in the July 2021 Sponsored Research Agreement) and UMB’s rights in any Joint Arising IP (as defined in the July 2021 Sponsored Research Agreement) (collectively, the “UMB IP”). The Company may exercise the Option by giving UMB written notice within 60 days after it receives notice from UMB of the UMB IP. Pursuant to the July 2021 Sponsored Research Agreement, the Company shall pay UMB the fees below: Payment 1 $ 92,095 Upon execution of the July 2021 Sponsored Research Agreement 2 $ 92,095 Six months after the start of project work as outlined in the July 2021 Sponsored Research Agreement 3 $ 92,095 Upon completion of the project work as outlined in the July 2021 Sponsored Research Agreement The Company paid the first payment of $92,095 on September 1, 2021 which was recorded to prepaid expense and other current assets – current to be amortized over the estimated project timeline of twelve months. The Company recognized amortization expense of $23,024 during the three and nine months ended September 30, 2021. Joint Venture Agreement with Zylö Therapeutics, Inc. On April 22, 2021 (the “JV Effective Date”), the Company entered into a Joint Venture Agreement (the “JV Agreement”) with Zylö Therapeutics, Inc. (“ZTI”) pursuant to which the parties agreed to form a joint venture entity, to be named Ketamine Joint Venture, LLC (the “Joint Venture”), to, among other things, focus on the clinical development of ketamine using ZTI’s Z-pod™ technology (the “Venture”). Pursuant to the JV Agreement, the Company shall act as the manager (the “Manager”) of the Joint Venture. The Venture shall terminate if the development program does not meet certain specifications and milestones as set forth in the JV Agreement within 30 days of the date set forth in the JV Agreement. Notwithstanding the foregoing, the Manager may, in its sole discretion, terminate the Venture at any time. Pursuant to the terms of the JV Agreement, (A) the Company shall contribute (1) $225,000 and (2) its expertise and the expertise of its science advisory board and (B) ZTI shall contribute (1) certain rights to certain of its patented technology as set forth in the JV Agreement, (2) a license to the know-how and trade secrets with respect to its Z-pod™ technology for the loading and release of ketamine, (3) ketamine to be used for clinical purposes, (4) reasonable use of its facilities and permits and (5) its expertise and know-how. Pursuant to the JV Agreement, 51% of the interest in the Joint Venture shall initially be owned by the Company and 49% of the interest in the Joint Venture shall initially be owned by ZTI, subject to adjustment in the event of additional contributions by either party. Notwithstanding the foregoing, in no event shall either party own more than 60% of the interest in the Joint Venture. As of September 30, 2021 and as of the current date of this report, the joint venture entity has not been formed yet. Furthermore, pursuant to the terms of the JV Agreement, ZTI shall grant the Joint Venture a sublicense pursuant to its license agreement (the “License Agreement”) with Albert Einstein College of Medicine dated November 27, 2017, in the event that the Company or a third party makes a request indicating that the patented technology (the “Patented Technology”) licensed to ZTI pursuant to the License Agreement is needed to advance the development of the Joint Venture or it is contemplated or determined that the Patented Technology will be sold. Furthermore, pursuant to the JV Agreement, ZTI granted the Company an exclusive option to enter into a separate joint venture for the clinical development of psilocybin using ZTI’s Z-pod™ technology on the same terms and conditions set forth in the JV Agreement, which option shall expire 24 months after the JV Effective Date. Amended Service Agreement On September 10, 2021 (the “Effective Date”), the Company entered into an Amendment Agreement (the “Amended Service Agreement”) to a certain service agreement dated on September 8, 2020 with the University of Texas (the “University”) at Austin whereby the University will provide advisory service and assist the Company on identifying license and sponsored research opportunities for the Company. The Company shall pay the University $5,000 per quarter starting on the Effective Date. Any cost incurred will be reimbursed only after prior written consent by the Company. The term of the Amended Service Agreement is for 36 months unless earlier terminated by either party upon giving a written notice as defined in the agreement. On October 13, 2021, the Company paid $5,000. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Sponsored Research Agreement with Columbia University On October 1, 2021, the Company entered into a sponsored research agreement with Columbia University pursuant to which the Company has been granted an option to license certain assets currently under development, including Alzheimer’s disease. The term of the option will commence on the effective date of this agreement and will expire upon the earlier of i) 90 days after the date of the Company’s receipt of a final research report for each specific research proposal as defined in the agreement or ii) termination of the research. If the Company elects to exercise the option, both parties will commence negotiation of a license agreement and will execute a license agreement no later than 3 months after the dated of the exercise of the option. Columbia University and the Company will work towards developing a therapeutic treatment for patients suffering from Alzheimer’s disease to post-traumatic stress disorder. During a one-year period from the date of this agreement, the Company shall pay a total of $1,436,082 to Columbia University for the support of the research according to the payment schedule as follows i) 30% at signing ii) 30% at four and half months after the start of the project iii) 30% at nine months after the start of the project and iv)10% at completion of the project. The Company paid the first payment of $430,825 in November 2021. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring and non-recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 29, 2021. In accordance with, ASC 205-20 “Discontinued Operations” establishes that the disposal or abandonment of a component of an entity or a group of components of an entity should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. As a result, the component’s results of operations have been classified as discontinued operations on a retrospective basis for all periods presented. Accordingly, the results of operations of this component, for all periods, are separately reported as “discontinued operations” on the condensed consolidated statements of operations. |
Going Concern | Going Concern These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had a cash used in operations of $1,504,145 for the nine months ended September 30, 2021. Additionally, the Company had an accumulated deficit of $2,173,891 at September 30, 2021 and has generated minimal revenues under its new business plan. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional capital pursuant to debt or equity financings. The Company may seek to raise additional capital through additional debt and/or equity financings to fund its operations in the future; however, no assurance can be provided that the Company will be able to raise additional capital on favorable terms, or at all. If the Company is unable to raise additional capital or secure additional lending in the future to fund its business plan, the Company may need to curtail or cease its operations. On February 9, 2021, the Company entered into securities purchase agreements with certain institutional and accredited investors pursuant to which it sold an aggregate of 4,276 shares of its newly designated Series C Convertible Preferred Stock and warrants to purchase up to 14,253,323 shares of it ss common stock for gross proceeds of approximately $4,276,000, before deducting placement agent and other offering expenses. The closing of the offering occurred on February 12, 2021 (See Note 7). Additionally, the Company received proceeds from sale of its equity investments for $6,736,070 in September 2021 (see Note 3). These unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the nine months ended September 30, 2021 and 2020 include the collectability of notes receivable, the valuation of the Company’s equity investments, estimates for obsolete and slow-moving inventory, estimates of the deemed dividend, valuation allowances for deferred tax assets, the fair value of warrants issued with debt and for services, and the fair value of shares issued for services and in settlements. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 or by the Securities Investor Protection Corporation up to $250,000. To reduce its risk associated with the failure of such financial institutions, the Company evaluates, at least annually, the rating of the financial institutions in which it holds deposits. At September 30, 2021 and December 31, 2020, the Company had cash in excess of FDIC limits of approximately $9.8 million, and approximately $880,000, respectively. |
Notes Receivable | Notes Receivable The Company recognizes an allowance for losses on notes receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current note receivable aging, and expected future write-offs, as well as an assessment of specific identifiable accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets - current of $220,590 and $241,091 at September 30, 2021 and December 31, 2020, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses and other current assets – non-current of $28,118 and $0 at September 30, 2021 and December 31, 2020, respectively, consist primarily of costs paid for license fees and future services which will occur after a year. Prepaid expenses may include prepayments in cash and equity instruments for consulting, business advisory, legal services, license fees, research and development fees, and insurance which are being amortized over the terms of their respective agreements. |
Equity Investments, at Fair Value | Equity Investments, at Fair Value Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company’s carrying value and the net proceeds received from such disposition. Realized gains and losses on investment transactions are determined by specific identification. Net unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment. Net unrealized gains or losses for equity investments are recognized in operations as the difference between the carrying value at the beginning of the period and the fair value at the end of the period. |
Equity Investments, at Cost | Equity Investments, at Cost Equity investments, at cost are comprised mainly of non-marketable capital stock and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. |
Revenue Recognition | Revenue Recognition The Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts. For the license and royalty income, revenue is recognized when the Company satisfies the performance obligation based on the related license agreement. Payments received from the licensee that are related to future periods are recorded as deferred revenue to be recognized as revenues over the term of the related license agreement (see Note 9). Product sales were recognized when the NFID products were shipped to the customer and title was transferred and were recorded net of any discounts or allowances which are separately reported as “discontinued operations” on the condensed consolidated statements of operations. |
Cost of Revenues | Cost of Revenues The primary components of cost of revenues on license fees included the cost of the license fees. Payments made to the licensor that are related to future periods are recorded as prepaid expense to be amortized over the term of the related license agreement (see Note 9). The primary components of cost of revenues on NFID apparel include the cost of the product, production costs, warehouse storage costs and shipping fees which are separately reported as “discontinued operations” on the condensed consolidated statements of operations. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation – Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under Accounting Standards Update (“ASU”) 2016-09 Improvements to Employee Share-Based Payment. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company follows the provisions of Financial Accounting Standards Board (“FASB”) ASC 740-10, “Uncertainty in Income Taxes”. Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. The Company does not believe it has any uncertain tax positions as of September 30, 2021 and December 31, 2020 that would require either recognition or disclosure in the accompanying unaudited condensed consolidated financial statements. The Company recognized income tax expense of $19,133 for the nine months ended September 30, 2021. |
Research and development | Research and development In accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred. During the nine months ended September 30, 2021 and 2020, research and development costs were $217,962 and $0, respectively. During the three months ended September 30, 2021 and 2020, research and development costs were $70,514 and $0, respectively. |
Net Loss per Common Share | Net Income (Loss) per Common Share Basic loss per share is computed by dividing net loss allocable to common shareholders by the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period using the as-if converted method. Potentially dilutive securities which included convertible preferred shares and stock options are excluded from the computation of diluted shares outstanding if they would have an anti-dilutive impact on the Company’s net losses. The following are the potentially dilutive shares for the nine months ended September 30, 2021 and 2020: September 30, September 30, Series A convertible preferred stock - - Series B convertible preferred stock - - Series C convertible preferred stock 756,667 - Stock options 300,000 300,000 Warrants 17,353,987 - The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share (“EPS”) calculations. Three months Three months Nine months Nine months Numerator: Net income (loss) $ 6,385,119 $ (633,795 ) $ 3,588,430 $ (2,316,703 ) Denominator: Weighted-average shares of common stock 98,636,970 84,416,681 93,594,877 59,512,252 Dilutive effect of convertible instruments 1,056,513 - 1,056,513 - Diluted weighted-average of common stock 99,693,483 41,653,825 94,651,390 80,631,207 Net income (loss) per common share from: Basic $ 0.06 $ (0.01 ) $ 0.04 $ (0.04 ) Diluted 0.06 (0.01 ) 0.04 (0.04 ) |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to recognize a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The pronouncement requires a modified retrospective method of adoption and was effective on January 1, 2019, with early adoption permitted. For the Company’s administrative office lease, the Company analyzed if it would be required to record a lease liability and a right-of-use asset on its condensed consolidated balance sheets at fair value upon adoption of ASU 2016-02. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of anti-dilutive net loss per share | September 30, September 30, Series A convertible preferred stock - - Series B convertible preferred stock - - Series C convertible preferred stock 756,667 - Stock options 300,000 300,000 Warrants 17,353,987 - |
Schedule of the numerator and denominator used in the basic and diluted earnings per share | Three months Three months Nine months Nine months Numerator: Net income (loss) $ 6,385,119 $ (633,795 ) $ 3,588,430 $ (2,316,703 ) Denominator: Weighted-average shares of common stock 98,636,970 84,416,681 93,594,877 59,512,252 Dilutive effect of convertible instruments 1,056,513 - 1,056,513 - Diluted weighted-average of common stock 99,693,483 41,653,825 94,651,390 80,631,207 Net income (loss) per common share from: Basic $ 0.06 $ (0.01 ) $ 0.04 $ (0.04 ) Diluted 0.06 (0.01 ) 0.04 (0.04 ) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value | At September 30, 2021 (Unaudited) At December 31, 2020 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Equity investments, at fair value $ 820,126 $ — $ — $ — — $ — |
Schedule of fair value hierarchy | Level 1 Level 2 Level 3 Total Common Stock $ 820,126 $ — $ — $ 820,126 Total Investments $ 820,126 $ — $ — $ 820,126 |
Schedule of activity in the company’s equity investments, at fair value | September 30, December 31, Balance, beginning of period $ — $ — Additions 531,250 — Sales (80,750 ) — Unrealized gain 369,626 — Balance, end of period $ 820,126 $ — |
Schedule of equity investment fair value components | September 30, December 31, Equity investments, at original cost $ 450,500 $ — Gross unrealized appreciation 369,626 — Equity investments, at fair market value $ 820,126 $ — |
Disposal of the Discontinued _2
Disposal of the Discontinued Operations of the Nfid Business (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of financial data of the company’s gain from sale of the NFID business | September 30, Assets: Current assets: Inventory, net $ 58,447 Total assets $ 58,447 Liabilities: Current liabilities: Total liabilities $ - Carrying value of NFID business on date of sale $ 58,447 Total consideration (60,000) Net gain from sale of NFID business $ 1,553 |
Schedule of operating result of discontinued operations of the NFID Business | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Product sales, net $ 39,236 $ 16,285 $ 119,541 $ 18,795 Cost of sales 30,637 29,450 98,998 30,866 Gross profit (loss) 8,599 (13,165 ) 20,543 (12,071 ) Total operating and other non-operating expenses (97,471 ) (64,162 ) (249,565 ) (170,058 ) Gain from sale of NFID business 1,553 - 1,553 - Loss from discontinued operations $ (87,319 ) $ (77,327 ) $ (227,469 ) $ (182,129 ) |
Notes Receivable (Tables)
Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Notes Receivable (Tables) [Line Items] | |
Schedule of notes receivable | September 30, December 31, Principal amounts of notes receivable $ 280,000 $ 250,000 Collections on notes receivables (107,000 ) (30,000 ) Less: allowance for doubtful accounts (113,000 ) (196,500 ) Less: notes receivable, net – current portion — (23,500 ) Notes receivable – non-current $ 60,000 $ — |
Note Payable (Tables)
Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of interest expense | As of As of Principal amount $ - $ 18,900 Less: current portion - (14,654 ) Note payable - long term portion $ - $ 4,246 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock options activities | Number Weighted Weighted Aggregate Balance Outstanding, December 31, 2020 300,000 $ 0.0001 3.5 74,970 Granted/issued — — — — Forfeited — — — — Balance Outstanding, September 30, 2021 300,000 $ 0.0001 2.79 $ 58,470 Exercisable, September 30, 2021 300,000 $ 0.0001 2.79 $ 58,470 |
Schedule of warrant activities | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Balance Outstanding, December 31, 2020 — — — — Granted 17,353,987 0.31 5.00 — Forfeited — — — — Balance Outstanding, September 30, 2021 17,353,987 $ 0.31 4.37 $ — Exercisable, September 30, 2021 17,353,987 $ 0.31 4.37 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of UMB minimum royalty payments | Payment Year $ - Prior to First Commercial Sale $ - Year of First Commercial Sale $ 25,000 First calendar year following the First Commercial Sale $ 25,000 Second calendar year following the First Commercial Sale $ 100,000 Third calendar year following the First Commercial Sale |
Schedule of milestone payments | Payment Milestone $ 50,000 Filing of an Investigational New Drug (or any foreign equivalent) for a Licensed Product $ 100,000 Dosing of first patient in a Phase 1 Clinical Trial of a Licensed Product $ 250,000 Dosing of first patient in a Phase 2 Clinical Trial of a Licensed Product $ 500,000 Receipt of New Drug Application (“NDA”) (or foreign equivalent) approval for a Licensed Product $ 1,000,000 Achievement of First Commercial Sale of Licensed Product |
Schedule of exclusive of value added tax to be amortized | Payment 1 86,777 Euros ($101,520 USD) Upon signing the Study Agreement and was paid in December 2020 2 86,777 Euros ($101,520 USD) Obtained approval from ethical committee 3 86,777 Euros ($101,520 USD) Data collection has commenced 4 130,166 Euros ($152,281 USD) First half of the participants are tested 5 43,885 Euros ($50,760 USD) Completion of data collection and delivery of final report |
Schedule of shall pay UMB | Payment 1 $ 92,095 Upon execution of the July 2021 Sponsored Research Agreement 2 $ 92,095 Six months after the start of project work as outlined in the July 2021 Sponsored Research Agreement 3 $ 92,095 Upon completion of the project work as outlined in the July 2021 Sponsored Research Agreement |
Organization and Business (Deta
Organization and Business (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Organization and Business [Line items] | |
Asset purchase agreement, description | the Company entered into and closed on an Asset Purchase Agreement (the “Asset Purchase Agreement) with NFID, LLC, a Florida limited liability company (the “Buyer”), whereby the Buyer purchased from the Company certain assets, properties, and rights in connection with the Company’s NFID trademark name, logos, domain, and apparel clothing and accessories for a purchase price of $60,000 in the form of a promissory note amounting to $60,000. The promissory note bears 8% interest per annum and matures on October 1, 2023. Accordingly, the results of operations of this component, for all periods presented, are separately reported as “discontinued operations” on the condensed consolidated statements of operations (see Note 4). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Feb. 09, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Jan. 18, 2021 |
Accounting Policies [Abstract] | |||||||
Net loss | $ 1,504,145 | ||||||
Accumulated deficit | $ (2,173,891) | (2,173,891) | $ (5,762,321) | ||||
Aggregate shares (in Shares) | 4,276 | 8,500,000 | |||||
Warrant purchase (in Shares) | 14,253,323 | ||||||
Gross proceeds issued | $ 4,276,000 | ||||||
Sale of its equity investments | 6,736,070 | ||||||
Federal deposit insurance corporation | 250,000 | 250,000 | |||||
Securities investor protection corporation | 250,000 | 250,000 | |||||
FDIC cash limits | 9,800,000 | 880,000 | |||||
Prepaid expenses and other current assets | 220,590 | 220,590 | 241,091 | ||||
Inventory write-down | 28,118 | 28,118 | $ 0 | ||||
Income tax expense | 19,133 | ||||||
Research and development cost | $ 70,514 | $ 0 | $ 217,962 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Options [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share [Line Items] | ||
Anti-dilutive net loss per share | 300,000 | 300,000 |
Warrant [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share [Line Items] | ||
Anti-dilutive net loss per share | 17,353,987 | |
Series A Convertible Preferred Stock [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share [Line Items] | ||
Anti-dilutive net loss per share | ||
Series B Convertible Preferred Stock [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share [Line Items] | ||
Anti-dilutive net loss per share | ||
Series C Convertible Preferred Stock [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share [Line Items] | ||
Anti-dilutive net loss per share | 756,667 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of the numerator and denominator used in the basic and diluted earnings per share - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income (loss) (in Dollars) | $ 6,385,119 | $ (633,795) | $ 3,588,430 | $ (2,316,703) |
Denominator: | ||||
Weighted-average shares of common stock | 98,636,970 | 84,416,681 | 93,594,877 | 59,512,252 |
Dilutive effect of convertible instruments | 1,056,513 | 1,056,513 | ||
Diluted weighted-average of common stock | 99,693,483 | 41,653,825 | 94,651,390 | 80,631,207 |
Net income (loss) per common share from: | ||||
Basic (in Dollars per share) | $ 0.06 | $ (0.01) | $ 0.04 | $ (0.04) |
Diluted (in Dollars per share) | $ 0.06 | $ (0.01) | $ 0.04 | $ (0.04) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments and Fair Value Measurements (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Net realized gain | $ 6,655,120 | |
Equity investments cost | $ 0 | $ 200 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Level 1 [Member] | ||
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value [Line Items] | ||
Equity investments, at fair value | $ 820,126 | |
Level 3 [Member] | ||
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value [Line Items] | ||
Equity investments, at fair value | ||
Level 2 [Member] | ||
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value [Line Items] | ||
Equity investments, at fair value |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy | Sep. 30, 2021USD ($) |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy [Line Items] | |
Total Investments | $ 820,126 |
Common Stock [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy [Line Items] | |
Total Investments | 820,126 |
Level 1 [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy [Line Items] | |
Total Investments | 820,126 |
Level 1 [Member] | Common Stock [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy [Line Items] | |
Total Investments | 820,126 |
Level 3 [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy [Line Items] | |
Total Investments | |
Level 3 [Member] | Common Stock [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of fair value hierarchy [Line Items] | |
Total Investments |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of activity in the company’s equity investments, at fair value - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of activity in the company’s equity investments, at fair value [Abstract] | ||
Balance, beginning of period | ||
Additions | 531,250 | |
Sales | (80,750) | |
Unrealized gain | 369,626 | |
Balance, end of period | $ 820,126 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of equity investment fair value components - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of equity investment fair value components [Abstract] | ||
Equity investments, at original cost | $ 450,500 | |
Gross unrealized appreciation | 369,626 | |
Equity investments, at fair market value | $ 820,126 |
Disposal of the Discontinued _3
Disposal of the Discontinued Operations of the Nfid Business (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Purchase price | $ 60,000 | |
Promissory note amount | $ 60,000 | |
Bearing interest rate percentage | 8.00% | |
Maturity date | Oct. 1, 2023 | |
Non-current amount of note receivable | $ 60,000 | |
Assets of discontinued operations | $ 0 | $ 33,484 |
Disposal of the Discontinued _4
Disposal of the Discontinued Operations of the Nfid Business (Details) - Schedule of financial data of the company’s gain from sale of the NFID business | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Current assets: | |
Inventory, net | $ 58,447 |
Total assets | 58,447 |
Current liabilities: | |
Total liabilities | |
Carrying value of NFID business on date of sale | 58,447 |
Total consideration | (60,000) |
Net gain from sale of NFID business | $ 1,553 |
Disposal of the Discontinued _5
Disposal of the Discontinued Operations of the Nfid Business (Details) - Schedule of operating result of discontinued operations of the NFID Business - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of operating result of discontinued operations of the NFID Business [Abstract] | ||||
Product sales, net | $ 39,236 | $ 16,285 | $ 119,541 | $ 18,795 |
Cost of sales | 30,637 | 29,450 | 98,998 | 30,866 |
Gross profit (loss) | 8,599 | (13,165) | 20,543 | (12,071) |
Total operating and other non-operating expenses | (97,471) | (64,162) | (249,565) | (170,058) |
Gain from sale of NFID business | 1,553 | 1,553 | ||
Loss from discontinued operations | $ (87,319) | $ (77,327) | $ (227,469) | $ (182,129) |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | Jun. 07, 2021 | Mar. 10, 2021 | Jan. 06, 2020 | Oct. 31, 2018 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 02, 2018 | Sep. 30, 2018 | Sep. 28, 2018 |
Notes Receivable (Details) [Line Items] | |||||||||||
Principal balance | $ 23,500 | ||||||||||
Bad debt recovery | $ 7,500 | 9,000 | |||||||||
Note receivable | $ 23,500 | ||||||||||
Bad debt recovery cash payment, description | the Company and the investor, entered into a settlement agreement whereby both parties agreed to settle the remaining balance of this note receivable which was previously written off in year 2020 for a total settlement amount of $196,000 to be paid as follows i) an initial payment of $46,000 upon execution of the settlement agreement and ii) $10,000 per month for fifteen months. Between June 9, 2021 and September 7, 2021, the Company collected a total of $76,000 and accordingly reduced the allowance for doubtful accounts against bad debt recovery for cash payment received. | ||||||||||
Promissory note interest | 8.00% | ||||||||||
Note receivable non-current amounted | $ 60,000 | ||||||||||
Promissory Note Receivable Agreement [Member] | |||||||||||
Notes Receivable (Details) [Line Items] | |||||||||||
Principal balance | $ 50,000 | $ 100,000 | $ 200,000 | ||||||||
Remaining balance of promissory note receivable | $ 100,000 | ||||||||||
Accrued interest rate | 6.00% | ||||||||||
Deposit and credit towards the acquisition of the assets | $ 50,000 | ||||||||||
Allowance for doubtful account and bad debt | $ 50,000 | ||||||||||
Promissory Note Receivable Agreement [Member] | Minimum [Member] | |||||||||||
Notes Receivable (Details) [Line Items] | |||||||||||
Accrued interest rate | 10.00% | ||||||||||
Promissory Note Receivable Agreement [Member] | Maximum [Member] | |||||||||||
Notes Receivable (Details) [Line Items] | |||||||||||
Accrued interest rate | 18.00% | ||||||||||
Purchase Agreement [Member] | |||||||||||
Notes Receivable (Details) [Line Items] | |||||||||||
Principal balance | 146,500 | ||||||||||
Allowance for doubtful account and bad debt | 174,376 | ||||||||||
Notes receivable and interest receivable | $ 277,305 | ||||||||||
Notes receivable purchase price | 30,000 | $ 277,305 | |||||||||
Convertible series B preferred stock (in Shares) | 10,420 | ||||||||||
Interest receivable | $ 27,876 |
Notes Receivable (Details) - Sc
Notes Receivable (Details) - Schedule of notes receivable - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of notes receivable [Abstract] | ||
Principal amounts of notes receivable | $ 280,000 | $ 250,000 |
Collections on notes receivables | (107,000) | (30,000) |
Less: allowance for doubtful accounts | (113,000) | (196,500) |
Less: notes receivable, net – current portion | (23,500) | |
Notes receivable – non-current | $ 60,000 |
Note Payable (Details)
Note Payable (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Apr. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Note Payable (Details) [Line Items] | |||
Principal amount | $ 18,900 | ||
Accrued interest | 182 | ||
Interest expense | $ 54 | ||
Paycheck Protection Program [Member] | |||
Note Payable (Details) [Line Items] | |||
Principal amount | $ 18,900 | $ 18,900 | |
Interest rate | 1.00% | ||
Interest-bearing unsecured | 5.00% | ||
Accrued interest | $ 174 |
Note Payable (Details) - Schedu
Note Payable (Details) - Schedule of interest expense - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of interest expense [Abstract] | ||
Principal amount | $ 18,900 | |
Less: current portion | (14,654) | |
Note payable - long term portion | $ 4,246 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | Apr. 14, 2021 | Feb. 09, 2021 | Jan. 18, 2021 | Sep. 30, 2021 | Mar. 10, 2021 | Dec. 31, 2020 | Nov. 30, 2019 | Apr. 30, 2013 |
Stockholders’ Equity (Details) [Line Items] | ||||||||
Shares of preferred stock | 5,000,000 | 5,000,000 | ||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock conversion, description | The Series C Convertible Preferred Stock and the February Warrants each contain a beneficial ownership limitation that restricts each of the investor’s ability to exercise the February Warrants and convert the Series C Convertible Preferred Stock such that the number of shares of the Company common stock held by each of them and their affiliates after such conversion or exercise does not exceed 4.99% (or, at the election of the Investor, 9.99%) of the Company’s then issued and outstanding shares of common stock. | |||||||
Warrants term | 5 years | |||||||
Exercise price (in Dollars per share) | $ 0.3 | |||||||
Warrants period date | 180 days | |||||||
Subsequent financing percentage | 50.00% | |||||||
Obligation percentage | 1.00% | |||||||
Placement agent warrants, description | pursuant to the terms of the offering, the Company issued Bradley Woods & Co, Ltd. and Katalyst Securities LLC warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of 2,850,664 shares of common stock, or 10% of the shares of common stock issuable upon conversion of the Series C Preferred Stock and February Warrant Shares sold in the offering. The Placement Agent Warrants are exercisable for a period of five years from the closing date of the offering at an exercise price of $0.35 per share, subject to adjustment. | |||||||
Risk free interest rate | 0.50% | |||||||
Expected dividend yield | 0.00% | |||||||
Expected term | 5 years | |||||||
Expected volatility | 169.00% | |||||||
Aggregate grant date fair value of placement agent warrants (in Dollars) | $ 1,106,000 | |||||||
Convertible preferred stock | 4,049 | |||||||
Convertible common stock | 13,495,014 | |||||||
Shares of common stock | 4,276 | 8,500,000 | ||||||
Stock-based compensation (in Dollars) | $ 83,728 | |||||||
Purchase agreement, description | the Company entered into pursuant to securities purchase agreements with certain investors pursuant to which it sold warrants to purchase up to 14,253,323 shares of the Company’s common stock and 4,276 shares of the Company’s Series C Convertible Preferred Stock. The February Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.30 per share, subject to adjustment. If, after a period of 180 days after the date of issuance of the February Warrants, a registration statement covering the resale of the February Warrant Shares is not effective, the holders may exercise the February Warrants by means of a cashless exercise. In addition, pursuant to the terms of the offering, the Company issued the Placement Agent Warrants to purchase up to an aggregate of 2,850,664 shares of common stock to its placement agents, or 10% of the shares of common stock issuable upon conversion of the Series C Preferred Stock and February Warrant Shares sold in the offering. The Placement Agent Warrants are exercisable for a period of five years from the closing date of the offering at an exercise price of $0.35 per share, subject to adjustment (see Series C Convertible Preferred Stock Financing above). Such warrants issued to various investors and to the placement agents were recorded as additional paid in capital with an offsetting debit applied against additional paid in capital, thus these warrants have no further accounting effect within the equity section. | |||||||
Common Stock [Member] | Minimum [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Authorized number of shares | 100,000,000 | |||||||
Common Stock [Member] | Maximum [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Authorized number of shares | 500,000,000 | |||||||
Warrant [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Warrants term | 5 years | |||||||
Exercise price (in Dollars per share) | $ 0.2 | |||||||
Purchase of warrants shares | 250,000 | |||||||
Warrant, description | The warrants were valued on the grant date at approximately $0.33 per warrant for a total of $83,728 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.35 per share (based on the quoted trading price on the date of grant), volatility of 169%, expected term of five year, and a risk-free interest rate of 0.46%. | |||||||
Series A Convertible Preferred Stock [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Shares of preferred stock | 1,000,000 | |||||||
Series B Convertible Preferred Stock [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Shares of preferred stock | 2,000 | 2,000 | 2,000 | |||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Series C Convertible Preferred Stock [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Shares of preferred stock | 4,280 | 4,280 | ||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | |||||||
Convertible preferred stock stated value | 1,000 | |||||||
Preferred stock outstanding, description | A holder of Series C Convertible Preferred Stock may not convert any portion of the Series C Convertible Preferred Stock to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% (or, upon election by a holder prior to issuance, 9.99%) of the outstanding shares of the Company’s common stock after conversion, which beneficial ownership limitation may be increased by the holder up to, but not exceeding, 9.99%. | |||||||
Preferred stock, shares outstanding | 227 | |||||||
Series C Conversion Price [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Conversion price per share (in Dollars per share) | $ 0.3 | |||||||
Series C Purchase Agreements [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Preferred stock conversion, description | the Company entered into securities purchase agreements (collectively, the “Series C Purchase Agreements”) with certain institutional and accredited investors for the sale of an aggregate of 4,276 shares of the Company’s Series C Convertible Preferred Stock and warrants (the “February Warrants”) to purchase up to 14,253,323 shares (the “February Warrant Shares”) of the Company’s common stock for gross proceeds of approximately $4,276,000, before deducting placement agent and other offering expenses of $481,898 which are offset against the proceeds in additional paid in capital. The offering closed on February 12, 2021. Accordingly, the Company recognized a total deemed dividend of $1,403,997 for the beneficial conversion feature in connection with the issuance of these Series C Convertible Preferred Stock. |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of stock options activities - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Stockholders’ Equity (Details) - Schedule of stock options activities [Line Items] | |
Number of Options, balance beginning | 300,000 |
Weighted Average Exercise Price, balance beginning (in Dollars per share) | $ / shares | $ 0.0001 |
Weighted Average Remaining Contractual Term (Years), balance beginning | 3 years 6 months |
Aggregate Intrinsic Value, balance beginning (in Dollars) | $ | $ 74,970 |
Number of Options, Granted/issued | |
Weighted Average Exercise Price, Granted/issued (in Dollars per share) | $ / shares | |
Weighted Average Remaining Contractual Term (Years), Granted/issued | |
Aggregate Intrinsic Value, Granted/issued | |
Number of Options, Forfeited | |
Weighted Average Exercise Price, Forfeited (in Dollars per share) | $ / shares | |
Weighted Average Remaining Contractual Term (Years), Forfeited | |
Aggregate Intrinsic Value, Forfeited | |
Number of Options, ending balance | 300,000 |
Weighted Average Exercise Price, ending balance (in Dollars per share) | $ / shares | $ 0.0001 |
Weighted Average Remaining Contractual Term (Years), ending balance | 2 years 9 months 14 days |
Aggregate Intrinsic Value, ending balance (in Dollars) | $ | $ 58,470 |
Number of Options, Exercisable | 300,000 |
Weighted Average Exercise Price, Exercisable (in Dollars per share) | $ / shares | $ 0.0001 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 2 years 9 months 14 days |
Aggregate Intrinsic Value, Exercisable (in Dollars) | $ | $ 58,470 |
Stockholders_ Equity (Detail_2
Stockholders’ Equity (Details) - Schedule of warrant activities - Warrant [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Stockholders’ Equity (Details) - Schedule of warrant activities [Line Items] | |
Number of Warrants, beginning balance | |
Weighted Average Exercise Price, beginning balance (in Dollars per share) | $ / shares | |
Weighted Average Remaining Contractual Term (Years), beginning balance | |
Aggregate Intrinsic Value, beginning balance (in Dollars) | $ | |
Number of Warrants, Granted | 17,353,987 |
Weighted Average Exercise Price, Granted (in Dollars per share) | $ / shares | $ 0.31 |
Weighted Average Remaining Contractual Term (Years), Granted | 5 years |
Aggregate Intrinsic Value, Granted | |
Number of Warrants, Forfeited | |
Weighted Average Exercise Price, Forfeited (in Dollars per share) | $ / shares | |
Weighted Average Remaining Contractual Term (Years), Forfeited | |
Aggregate Intrinsic Value, Forfeited | |
Number of Warrants, ending balance | 17,353,987 |
Weighted Average Exercise Price, ending balance (in Dollars per share) | $ / shares | $ 0.31 |
Weighted Average Remaining Contractual Term (Years), ending balance | 4 years 4 months 13 days |
Aggregate Intrinsic Value, ending balance (in Dollars) | $ | |
Number of Warrants, Exercisable | 17,353,987 |
Weighted Average Exercise Price, Exercisable (in Dollars per share) | $ / shares | $ 0.31 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 4 years 4 months 13 days |
Aggregate Intrinsic Value, Exercisable (in Dollars) | $ |
Concentrations (Details)
Concentrations (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 100.00% | |
Revenue Benchmark [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 10.00% | 10.00% |
One Licensee [Member] | Revenue Benchmark [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 100.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Oct. 13, 2021USD ($) | Sep. 01, 2021USD ($) | Apr. 12, 2021USD ($)shares | Jan. 05, 2021USD ($) | Dec. 31, 2021shares | Apr. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020 | Jul. 31, 2020USD ($) | Apr. 17, 2020 | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($)shares | Sep. 30, 2021EUR (€) |
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Employment agreement, description | the CEO was granted 7,630,949 vested shares of the Company’s common stock in April 2020, and the CEO’s base salary was increased to $120,000. In addition, the CEO shall be eligible to earn a bonus, subject to the sole discretion of the Company’s Board. On January 18, 2021, the Company entered into an amendment (the “Amendment”) to the Employment Agreement, effective as of January 1, 2021, pursuant to which the CEO’s base salary was increased from $120,000 per year to $180,000 per year. | ||||||||||||
License fee | $ 10,000 | $ 10,000 | |||||||||||
License agreement, description | the Company shall pay UMB (i) a license fee (ii) certain event-based milestone payments, (iii) royalty payments depending on net revenues, and (iv) a tiered percentage of sublicense income. The Company shall pay to UMB a license fee of $75,000, payable as follows: (a) $25,000 shall be due within 30 days following the Master License Agreement Effective Date; and (b) $50,000 on or before the first anniversary of the Master License Agreement Effective Date. The license fee is non-refundable, and is not creditable against any other fee, royalty, or payment. The Company shall be responsible for payment of all patent expenses in connection with preparing, filing, prosecution and maintenance of patents or patent applications relating to the patent rights. The Company paid the $25,000 license fee on February 17, 2021 which was recorded in prepaid expenses to be amortized over the 15-year term. The Company recognized amortization expense of $3,125 during the nine months ended September 30, 2021. At September 30, 2021, prepaid expense and other current assets – current amounted $5,000 and prepaid expenses – non-current amounts $16,875 as reflected in the accompanying condensed consolidated balance sheets. | ||||||||||||
Royalty payments, description | the Company agreed to pay certain royalty payments as follows: (i)3% on sales of Licensed Products (as defined in the Master License Agreement) during the applicable calendar year for sales less than $50,000,000; and (ii)5% on sales of Licensed Products during the applicable calendar year for sales greater than $50,000,000; | ||||||||||||
Sublicense income, description | The Company shall pay to UMB a percentage of all sublicense income which is receivable by Company or Company affiliates as follows: (a) 25% of sublicense income which is receivable with respect to any sublicense that is executed before the filing of an NDA (or foreign equivalent) for the first licensed product; and (b) 15% of sublicense income which is receivable with respect to any sublicense that is executed after the filing of an NDA (or foreign equivalent) for the first licensed product. | ||||||||||||
Commercial sale term | 10 years | ||||||||||||
License agreement expire | 15 years | ||||||||||||
Recognized amortization expenses | $ 23,024 | $ 23,024 | |||||||||||
Payment of sponsored research amount | 838 | ||||||||||||
Prepaid expenses | 11,243 | 11,243 | |||||||||||
Non-refundable cash payment | $ 500,000 | $ 500,000 | |||||||||||
Net sale percentage | 2.00% | ||||||||||||
Licensor share (in Shares) | shares | 500 | 500 | |||||||||||
Aggregate of converted shares (in Shares) | shares | 625,000 | 625,000 | |||||||||||
Reverse stock split vote, description | (“Reverse Stock Split Vote”), each share of the Series M Convertible Preferred Stock shall be entitled to such number of votes equal to 20,000 shares of AIkido’s common stock. In addition, each share of the Series M Convertible Preferred Stock shall be convertible, at any time after the earlier of (i) the date that the Reverse Stock Split Vote is approved by AIkido’s stockholders and (ii) December 31, 2021, at the option of the holder, into such number of shares of AIkido’s common stock determined by dividing the Stated Value by the Conversion Price. “Stated Value” means $1,000. “Conversion Price” means $0.80, subject to adjustment.The Company valued the 500 Series M Convertible Preferred stock which was equivalent into AIkido’s 625,000 shares of common stock at a fair value of $0.85 per common share or $531,250 based quoted trading price of AIkido’s common stock on the date of grant. The Company recorded an equity investment of $531,250 (see Note 3) and deferred revenue of $531,250 to be recognized as revenues over the term of the license. | ||||||||||||
Deferred revenue | 1,031,250 | $ 1,031,250 | |||||||||||
Cash received | 500,000 | 500,000 | |||||||||||
Securities received | 531,250 | $ 531,250 | |||||||||||
Revenue term | 15 years | ||||||||||||
Recognized revenues | 17,188 | $ 51,562 | |||||||||||
Deferred revenue – current portion | 68,750 | 68,750 | |||||||||||
Revenue long term portion amounts | 910,937 | $ 910,937 | |||||||||||
Consideration fee payable percentage | 110.00% | ||||||||||||
Upfront license fees | $ 50,000 | $ 50,000 | |||||||||||
First commercial sale | 10 years | ||||||||||||
Agreement shall expire | 15 years | ||||||||||||
Recognized revenues | 838 | $ 1,675 | |||||||||||
Total fee | 507,602 | $ 507,602 | € 433,885 | ||||||||||
Payment, description | the Company paid the first payment of $101,520 which was recorded to prepaid expense and other current assets – current of which approximately $22,318 was amortized in fiscal 2020. In September 2021, the Company notified Maastricht University of Netherlands for an early termination of this agreement. Maastricht University of Netherlands has not reached the second phase which is to obtain approval from ethical committee. The Company has no further obligation after the termination. The Company recognized remaining amortization expense of $107 and $79,202 during the three and nine months ended September 30, 2021, respectively. | ||||||||||||
Sponsored study agreement, description | The total cost under the Sponsored Study Agreement shall not exceed $81,474 which is payable in two equal installments of $40,737 upon execution of the Sponsored Study Agreement and $40,737 upon completion of the project with an estimated project timeline of nine months. The Company paid $40,737 on January 13, 2021 which was recorded in prepaid expense to be amortized over the nine-month period. Currently, the project has not been completed due to the delays cause by the Covid-19 pandemic. The Company recognized amortization expense of $4,526 and $40,737 during the three and nine months ended September 30, 2021, respectively. | ||||||||||||
Sublicense amount paid | $ 342,850 | ||||||||||||
Sponsored research agreement, description | The Company paid the first payment of $40,000 pursuant to the payment schedule on the Sponsored Research Agreement on June 15, 2021 and another $40,000 on September 9, 2021 which were recorded to prepaid expense and other current assets – current to be amortized over the two-year period. The Company recognized amortization expense of $42,856 and $49,999 during the three and nine months ended September 30, 2021, respectively. | ||||||||||||
Company paid cash | $ 92,095 | ||||||||||||
Payment of university | $ 5,000 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Company paid cash | $ 5,000 | ||||||||||||
Master Lincense Agreement [Member] | |||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Upfront license fees | 1,900,000 | ||||||||||||
Sublicense Agreement [Member] | |||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Deferred revenue – current portion | 3,353 | 3,353 | |||||||||||
Revenue long term portion amounts | 44,972 | $ 44,972 | |||||||||||
JV Agreement [Member] | |||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Pursuant terms, description | (A) the Company shall contribute (1) $225,000 and (2) its expertise and the expertise of its science advisory board and (B) ZTI shall contribute (1) certain rights to certain of its patented technology as set forth in the JV Agreement, (2) a license to the know-how and trade secrets with respect to its Z-pod™ technology for the loading and release of ketamine, (3) ketamine to be used for clinical purposes, (4) reasonable use of its facilities and permits and (5) its expertise and know-how. Pursuant to the JV Agreement, 51% of the interest in the Joint Venture shall initially be owned by the Company and 49% of the interest in the Joint Venture shall initially be owned by ZTI, subject to adjustment in the event of additional contributions by either party. Notwithstanding the foregoing, in no event shall either party own more than 60% of the interest in the Joint Venture. | ||||||||||||
Forecast [Member] | |||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Number of voting shares (in Shares) | shares | 20,000 | ||||||||||||
Sublicense Agreement [Member] | |||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||
Sublicense agreement amount paid | $ 12,500 | ||||||||||||
Sublicense income, percentage | 25.00% | ||||||||||||
Recognized amortization expenses | $ 210 | $ 419 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Payment One [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Payment | |
Year | Prior to First Commercial Sale |
Payment Two [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Payment | |
Year | Year of First Commercial Sale |
Payment Three [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Payment | $ 25,000 |
Year | First calendar year following the First Commercial Sale |
Payment Four [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Payment | $ 25,000 |
Year | Second calendar year following the First Commercial Sale |
Payment Five [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Payment | $ 100,000 |
Year | Third calendar year following the First Commercial Sale |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of milestone payments | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Payment One [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Payment | $ 50,000 |
Milestone | Filing of an Investigational New Drug (or any foreign equivalent) for a Licensed Product |
Payment Two [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Payment | $ 100,000 |
Milestone | Dosing of first patient in a Phase 1 Clinical Trial of a Licensed Product |
Payment Three [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Payment | $ 250,000 |
Milestone | Dosing of first patient in a Phase 2 Clinical Trial of a Licensed Product |
Payment Four [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Payment | $ 500,000 |
Milestone | Receipt of New Drug Application (“NDA”) (or foreign equivalent) approval for a Licensed Product |
Payment Five [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Payment | $ 1,000,000 |
Milestone | Achievement of First Commercial Sale of Licensed Product |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of exclusive of value added tax to be amortized | 9 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2021EUR (€) | |
Payment One [Member] | ||
Commitments and Contingencies (Details) - Schedule of exclusive of value added tax to be amortized [Line Items] | ||
Payment | $ 101,520 | € 86,777 |
Payment description | Upon signing the Study Agreement and was paid in December 2020 | Upon signing the Study Agreement and was paid in December 2020 |
Payment Two [Member] | ||
Commitments and Contingencies (Details) - Schedule of exclusive of value added tax to be amortized [Line Items] | ||
Payment | $ 101,520 | € 86,777 |
Payment description | Obtained approval from ethical committee | Obtained approval from ethical committee |
Payment Three [Member] | ||
Commitments and Contingencies (Details) - Schedule of exclusive of value added tax to be amortized [Line Items] | ||
Payment | $ 101,520 | € 86,777 |
Payment description | Data collection has commenced | Data collection has commenced |
Payment Four [Member] | ||
Commitments and Contingencies (Details) - Schedule of exclusive of value added tax to be amortized [Line Items] | ||
Payment | $ 152,281 | € 130,166 |
Payment description | First half of the participants are tested | First half of the participants are tested |
Payment Five [Member] | ||
Commitments and Contingencies (Details) - Schedule of exclusive of value added tax to be amortized [Line Items] | ||
Payment | $ 50,760 | € 43,885 |
Payment description | Completion of data collection and delivery of final report | Completion of data collection and delivery of final report |
Commitments and Contingencies_6
Commitments and Contingencies (Details) - Schedule of shall pay UMB | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Payment One [Member] | |
Commitments and Contingencies (Details) - Schedule of shall pay UMB [Line Items] | |
Payment | $ 92,095 |
Payment description | Upon execution of the July 2021 Sponsored Research Agreement |
Payment Two [Member] | |
Commitments and Contingencies (Details) - Schedule of shall pay UMB [Line Items] | |
Payment | $ 92,095 |
Payment description | Six months after the start of project work as outlined in the July 2021 Sponsored Research Agreement |
Payment Three [Member] | |
Commitments and Contingencies (Details) - Schedule of shall pay UMB [Line Items] | |
Payment | $ 92,095 |
Payment description | Upon completion of the project work as outlined in the July 2021 Sponsored Research Agreement |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 01, 2021 |
Subsequent Events [Abstract] | |
Subsequent event, description | the Company entered into a sponsored research agreement with Columbia University pursuant to which the Company has been granted an option to license certain assets currently under development, including Alzheimer’s disease. The term of the option will commence on the effective date of this agreement and will expire upon the earlier of i) 90 days after the date of the Company’s receipt of a final research report for each specific research proposal as defined in the agreement or ii) termination of the research. If the Company elects to exercise the option, both parties will commence negotiation of a license agreement and will execute a license agreement no later than 3 months after the dated of the exercise of the option. Columbia University and the Company will work towards developing a therapeutic treatment for patients suffering from Alzheimer’s disease to post-traumatic stress disorder. During a one-year period from the date of this agreement, the Company shall pay a total of $1,436,082 to Columbia University for the support of the research according to the payment schedule as follows i) 30% at signing ii) 30% at four and half months after the start of the project iii) 30% at nine months after the start of the project and iv)10% at completion of the project. The Company paid the first payment of $430,825 in November 2021. |