Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 29, 2022 | |
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 | 99,395,304 | |
Amendment Flag | false | |
Entity Central Index Key | 0001514183 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
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 ($) | Jun. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 8,734,434 | $ 9,837,001 |
Equity investments | 113,012 | 419,995 |
Prepaid expenses and other current assets - current | 99,939 | 145,324 |
Total Current Assets | 8,947,385 | 10,402,320 |
Note receivable - non-current, including interest receivable of $3,590 | 63,590 | 61,210 |
Prepaid expenses - non-current | 33,740 | 26,659 |
Total Assets | 9,044,715 | 10,490,189 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 155,924 | 417,937 |
Insurance payable | 40,819 | |
Deferred revenue - current portion | 72,102 | 72,102 |
Total Current Liabilities | 268,845 | 490,039 |
LONG TERM LIABILITIES: | ||
Deferred revenue - long-term portion | 901,833 | 937,884 |
Total Long Term Liabilities | 901,833 | 937,884 |
Total Liabilities | 1,170,678 | 1,427,923 |
Commitment and Contingencies (see Note 8) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 99,395,304 and 98,636,970 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 9,940 | 9,864 |
Additional paid-in capital | 12,389,148 | 12,314,979 |
Accumulated deficit | (4,525,051) | (3,262,577) |
Total Stockholders’ Equity | 7,874,037 | 9,062,266 |
Total Liabilities and Stockholders’ Equity | 9,044,715 | 10,490,189 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value | ||
Series C Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Interest receivable (in Dollars) | $ 3,590 | $ 3,590 |
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 | 99,395,304 | 98,636,970 |
Common stock, shares outstanding | 99,395,304 | 98,636,970 |
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 | 0 | 227 |
Preferred stock, shares outstanding | 0 | 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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
LICENSE FEE REVENUES: | $ 18,025 | $ 18,026 | $ 36,051 | $ 35,213 |
COST OF REVENUES | 1,459 | 1,460 | 2,919 | 2,085 |
GROSS PROFIT | 16,566 | 16,566 | 33,132 | 33,128 |
OPERATING EXPENSES: | ||||
Compensation expense | 100,212 | 54,942 | 227,393 | 167,234 |
Professional fees | 248,179 | 270,906 | 444,427 | 942,475 |
Research and development | 105,676 | 98,846 | 275,955 | 147,448 |
Insurance expense | 30,866 | 29,015 | 64,158 | 50,721 |
Bad debt recovery | (46,000) | (20,000) | (53,500) | |
Selling, general and administrative expenses | 25,918 | 45,706 | 62,743 | 116,735 |
Total operating expenses | 510,851 | 453,415 | 1,054,676 | 1,371,113 |
OPERATING LOSS FROM CONTINUING OPERATIONS | (494,285) | (436,849) | (1,021,544) | (1,337,985) |
OTHER INCOME (EXPENSE): | ||||
Interest income (expense), net | 377 | (1,040) | 792 | (2,389) |
Other income from equity shares earned for lock up agreement | 85,733 | |||
Gain on forgiveness of PPP note payable | 19,082 | 19,082 | ||
Net realized loss on equity investments | (104,700) | (104,700) | ||
Net unrealized gain (loss) on equity investments | (59,511) | 30,000 | (221,309) | 68,750 |
Other expense | (283) | (283) | ||
Total other income (expense) | (164,117) | 48,042 | (239,767) | 85,443 |
LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (658,402) | (388,807) | (1,261,311) | (1,252,542) |
Provision for income taxes | ||||
LOSS FROM CONTINUING OPERATIONS | (658,402) | (388,807) | (1,261,311) | (1,252,542) |
DISCONTINUED OPERATIONS: | ||||
Loss from discontinued operations, net of tax | (73,183) | (1,163) | (140,150) | |
LOSS FROM DISCONTINUED OPERATIONS | (73,183) | (1,163) | (140,150) | |
NET LOSS | (658,402) | (461,990) | (1,262,474) | (1,392,692) |
Deemed dividend | (1,403,997) | |||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (658,402) | $ (461,990) | $ (1,262,474) | $ (2,796,689) |
NET LOSS PER COMMON SHARE: | ||||
Continuing operations - basic and diluted (in Dollars per share) | $ (0.01) | $ 0 | $ (0.01) | $ (0.03) |
Discontinued operations - basic and diluted (in Dollars per share) | $ 0 | $ 0 | $ 0 | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted (in Shares) | 99,395,304 | 96,857,408 | 99,018,232 | 91,032,045 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
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 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 | ||||
Common stock issued for conversion of Series C preferred stock | $ 1,350 | (1,350) | ||||
Common stock issued for conversion of Series C preferred stock (in Shares) | (4,049) | 13,495,014 | ||||
Net 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 | ||||
Balance at Dec. 31, 2021 | $ 9,864 | 12,314,979 | (3,262,577) | 9,062,266 | ||
Balance (in Shares) at Dec. 31, 2021 | 227 | 98,636,970 | ||||
Stock options issued as stock based compensation | 45,009 | 45,009 | ||||
Common stock issued for conversion of Series C preferred stock | $ 76 | (76) | ||||
Common stock issued for conversion of Series C preferred stock (in Shares) | (227) | 758,334 | ||||
Net loss | (604,072) | (604,072) | ||||
Balance at Mar. 31, 2022 | $ 9,940 | 12,359,912 | (3,866,649) | 8,503,203 | ||
Balance (in Shares) at Mar. 31, 2022 | 99,395,304 | |||||
Stock options issued as stock based compensation | 15,112 | 15,112 | ||||
Amortization of prepaid stock-based compensation | 14,124 | 14,124 | ||||
Net loss | (658,402) | (658,402) | ||||
Balance at Jun. 30, 2022 | $ 9,940 | $ 12,389,148 | $ (4,525,051) | $ 7,874,037 | ||
Balance (in Shares) at Jun. 30, 2022 | 99,395,304 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,262,474) | $ (1,392,692) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Bad debt recovery | (20,000) | (46,000) |
Stock-based compensation | 74,245 | 83,728 |
Amortization of prepaid stock-based compensation | 107,970 | |
Net realized gain on equity investments | 104,700 | |
Net unrealized loss (gain) loss on equity investments | 221,309 | (68,750) |
Equity shares earned for lock up agreement | (85,733) | |
Gain on forgiveness of PPP note payable and accrued interest | (19,082) | |
Change in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 38,304 | (64,047) |
Assets of discontinued operations | (22,123) | |
Interest receivable | (2,380) | |
Accounts payable and accrued expenses | (262,013) | 65,146 |
Insurance payable | 40,819 | |
Deferred revenue | (36,051) | 514,787 |
NET CASH USED IN OPERATING ACTIVITIES | (1,189,274) | (841,063) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net proceeds from sale of equity investments | 66,707 | |
Collection on note receivable | 20,000 | 69,500 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 86,707 | 69,500 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from sale of preferred stock | 3,794,102 | |
Advance from a related party | 2,366 | |
Repayment of advance from a related party | (2,366) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,794,102 | |
NET CHANGE IN CASH AND CASH EQUIVALENTS: | (1,102,567) | 3,022,539 |
CASH AND CASH EQUIVALENTS - beginning of the period | 9,837,001 | 1,128,389 |
CASH AND CASH EQUIVALENTS - end of the period | 8,734,434 | 4,150,928 |
Cash paid during the period for: | ||
Interest | 224 | |
Income taxes | 25,159 | |
Non-cash investing and financing activities: | ||
Common stock issued for conversion of Series C preferred stock | 76 | |
Iniital fair value of stock options issued as stock-based compensation recorded as deferred compensation | 89,546 | |
Common stock warrants granted for services | 83,728 | |
Increase in equity investments recorded as deferred revenue pursuant to a patent license agreement | $ 531,250 |
Organization and Business
Organization and Business | 6 Months Ended |
Jun. 30, 2022 | |
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 8) 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 8). 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). On March 11, 2022, the Company stockholders approved granting discretionary authority to the Company’s Board of Directors to amend the Company’s Certificate of Incorporation to effect one or more consolidations of the Company’s issued and outstanding shares of common stock, pursuant to which the shares of common stock would be combined and reclassified into one share of common stock at a ratio within the range from 1-for-5 up to 1-for-50 (the “Reverse Stock Split”), provided that, (X) that the Company shall not effect Reverse Stock Splits that, in the aggregate, exceeds 1-for-50, and (Y) any Reverse Stock Split is completed no later than February 8, 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include financial statements for Silo Pharma, Inc and its inactive wholly-owned subsidiary with the same name as the parent entity, Silo Pharma, Inc, as of June 30, 2022 and during the three and nine months ended June 30, 2022. All intercompany balances and transactions have been eliminated in consolidation. 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 consolidated financial position and the consolidated 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, 2021 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2022. 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 NFID, LLC 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. Liquidity As reflected in the accompanying condensed consolidated financial statements, the Company generated a net loss of $1,262,474 and used cash in operations of $1,189,274 during the six months ended June 30, 2022. Additionally, the Company has an accumulated deficit of $4,525,051 at June 30, 2022. However, as of June 30, 2022, the Company had working capital of $8,678,540. The positive worthy capital serves to mitigate the conditions that historically raised substantial doubt about the Company’s ability to continue as a going concern. The Company believes that the Company has sufficient cash to meet its obligations for a minimum of twelve months from the date of this filing. 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 six months ended June 30, 2022 and year ended December 31, 2021 include the collectability of notes receivable, valuation of 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 June 30, 2022 and December 31, 2021, the Company had cash in excess of FDIC limits of approximately $8,240,000, and approximately $9,100,000, 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 $99,939 and $145,324 at June 30, 2022 and December 31, 2021, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses and other current assets – non-current of $33,740 and $26,659 at June 30, 2022 and December 31, 2021, 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 8). 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 8). 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 June 30, 2022 and December 31, 2021 that would require either recognition or disclosure in the accompanying condensed consolidated financial statements. Research and Development In accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred. During the six months ended June 30, 2022 and 2021, research and development costs were $275,955 and $147,448, respectively. During the three months ended June 30, 2022 and 2021, research and development costs were $105,676 and $98,846, respectively. Net 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 six months ended June 30, 2022 and 2021: June 30, 2022 2021 Series C convertible preferred stock — 756,667 Stock options 1,442,466 300,000 Warrants 17,353,987 17,353,987 18,796,453 18,410,654 Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06— Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and edging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) Debt with Conversion and Other Options 1. Add a disclosure objective 2. Add information about events or conditions that occur during the reporting period that cause conversion contingencies to be met or conversion terms to be significantly changed 3. Add information on which party controls the conversion rights 4. Align disclosure requirements for contingently convertible instruments with disclosure requirements for other convertible instruments 5. Require that existing fair value disclosures in Topic 825, Financial Instruments, be provided at the individual convertible instrument level rather than in the aggregate. Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, amendments in ASU 2020-06 added disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital. The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of its annual fiscal year and are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. If an entity elects the fully retrospective method of transition, the cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. The Company adopted ASU 2020-06 during the three months ended March 31, 2022 and it did not have material impact on its condensed consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2020-06 during the three months ended March 31, 2022 and did not have material impact on its condensed consolidated financial statements Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company’s consolidated financial statements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS FASB ASC 820 - Fair Value Measurements and Disclosures, 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. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on June 30, 2022. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). 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 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 June 30, 2022 and December 31, 2021: At June 30, 2022 At December 31, 2021 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Equity investments consisting of common stock, at fair value $ 113,012 $ — $ — $ 419,995 — $ — The following table summarizes activity in the Company’s equity investments, at fair value for the periods presented: June 30, December 31, Balance, beginning $ 419,995 $ — Additions 85,733 531,250 Sales at original cost (171,407 ) (359,843 ) Unrealized (loss) gain (221,309 ) 248,588 Balance as of June 30, 2022 $ 113,012 $ 419,995 During the six months ended June 30, 2022, the Company received 77,939 shares of Home Bistro, Inc. common stock with grant date fair value of $85,733 or $1.10 per share, in exchange for entering into a lock up and leak out agreement which was recorded as other income from equity shares earned for services in the accompanying condensed consolidated statement of operations. The Company measures equity securities received for services at fair value on the date of receipt. During the six months ended June 30, 2022, the Company sold its equity investments in Aikido Pharma, Inc. with cost of $171,407 for gross proceeds of $66,707 and the Company recorded a net realized loss on equity investments amounting to $104,700 as reflected in the accompanying condensed consolidated statement of operations. At June 30, 2022 and December 31, 2021, equity investments, at fair value consisted of common equity securities of two entities, Home Bistro, Inc. and Aikido Pharma, Inc. (see Note 8). Equity investments are carried at fair value with unrealized gains or losses which is recorded as net unrealized gain (loss) on equity investments in the accompanying condensed consolidated statement of operations. Realized gains and losses are determined on a specific identification basis which is recorded as net realized gain (loss) on equity investments in the consolidated statement of operations. 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. 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 equity instruments. Equity Investments at Cost At June 30, 2022 and December 31, 2021, the Company did not have non-marketable capital stock and stock warrants, recorded at cost. |
Disposal of the Discontinued Op
Disposal of the Discontinued Operations of the NFID Business | 6 Months Ended |
Jun. 30, 2022 | |
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. The following table set forth the selected financial data of the Company’s gain from sale of the NFID business on September 30, 2021: September 30, Assets: Current assets: Inventory, net $ 58,447 Total assets $ 58,447 Liabilities: Current liabilities: Total liabilities $ — Net asset of NFID business disposed $ 58,447 Consideration in the form of a note receivable (60,000 ) Gain from sale of NFID business $ (1,553 ) The summarized operating result of discontinued operations of the NFID Business included in the Company’s condensed consolidated statements of operations for the six months ended June 30, 2022 and 2021 is as follows: For the Six Months Ended June 30, 2022 2021 Product sales, net $ — $ 80,305 Cost of sales 1,079 68,360 Gross profit (loss) (1,079 ) 11,945 Total operating and other non-operating expenses (84 ) (152,095 ) Loss from discontinued operations $ (1,163 ) $ (140,150 ) |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 5 – NOTES RECEIVABLE As of June 30, 2022 and December 31, 2021, notes receivable, net, consisted of the following: June 30, December 31, Principal amounts of notes receivable $ 115,500 $ 220,000 Additional notes receivable — 60,000 Collections on notes receivables (20,000 ) (164,500 ) Less: allowance for doubtful accounts (35,500 ) (55,500 ) Total Notes receivable, net 60,000 60,000 Less: notes receivable, net – current portion — — Notes receivable – non-current $ 60,000 $ 60,000 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 years ended December 31, 2021, the Company recovered an aggregate of $7,500 bad debt previously written off during the periods between 2018 to 2020, recorded as bad debt recovery in the accompanying consolidated statement of operations. During the year ended December 31, 2021, the Company received $23,500 of payment and recovered $141,000 of the of the $196,500 bad debt allowance. 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. During the six months ended June 30, 2022, $20,000 was collected under this settlement agreement and $35,500 remains collectible under this settlement agreement and such amount has been fully reserved as of June 30, 2022. 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. The outstanding principal and accrued interest shall be due and payable on maturity. As of December 31, 2021, this note receivable had outstanding principal receivable of $60,000 and accrued interest receivable of $1,210 for a total receivable balance of $61,210. As of June 30, 2022, this note receivable had outstanding principal receivable of $60,000 and accrued interest receivable of $3,590 for a total receivable balance of $63,590 which is reflected in the accompanying consolidated balance sheet as note receivable – non-current. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 – STOCKHOLDERS’ EQUITY Shares Authorized The Company has 505,000,000 shares authorized which consist of 500,000,000 shares of common stock and 5,000,000 shares of preferred stock. Preferred Stock In April 2013, the Company designated 1,000,000 shares of preferred stock as Series A Convertible Preferred Stock and in November 2019, the Company designated 2,000 shares of preferred stock as Series B Convertible Preferred Stock. As of June 30, 2022 and December 31, 2021, there were no shares of the Series A and Series B preferred stock issued and outstanding. 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 into Common Stock On March 31, 2022, 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 March 31, 2022, the Company converted 227 Series C Convertible preferred stock into 758,334 shares of common stock. As of June 30, 2022, there were no shares of Series C Convertible preferred stock issued and outstanding. Stock Options On January 18, 2021, the Company’s board of directors (“Board”) approved the Silo Pharma, Inc. 2020 Omnibus Equity Incentive Plan (the “2020 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 2020 Plan, provided that certain exempt awards (as defined in the 2020 Plan), shall not count against such share limit. The 2020 Plan provides for the grant, from time to time, at the discretion of the 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 2020 Plan shall terminate on the tenth anniversary of the date of adoption by the Board. Subject to certain restrictions, the Board may amend or terminate the Plan at any time and for any reason. An amendment of the 2020 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 2020 Plan was approved by the stockholders. On December 29, 2021, the Board granted an aggregate of 342,466 incentive stock options under the 2020 Plan, to two non-employee board members, exercisable at $0.146 per share which expire on December 26, 2026 and vest on the first anniversary date of the grant date. These options were valued at $30,224 on the grant date using a Binomial Lattice option pricing model with the following assumptions: risk-free interest rate of 0.75%, expected dividend yield of 0%, expected term of 2 years using the simplified method and expected volatility of 115% based on historical volatility. The Company recorded the fair value of the unvested stock options, in the amount of $30,224, as deferred compensation which is being amortized over the vesting period. During the six months ended June 30, 2022, the Company amortized $15,122 of the deferred compensation which was recorded as compensation expenses in the accompanying condensed consolidated statement of operations. As of June 30, 2022, the deferred compensation related to this issuance had a balance of $$15,122. On January 31, 2022, pursuant to an Employment Agreement (see Note 8), an aggregate of 800,000 incentive stock options were issued under the 2020 Plan, to Dr. Kou, exercisable at $0.20 per share and expires on January 31, 2032. The stock options vest as follows: (i) 300,000 stock options upon issuance; (ii) 250,000 vests on October 31, 2022 and; (iii) 250,000 vests on October 31, 2023. The 800,000 stock options had a fair value of $94,915 which were valued at the grant date using a Binomial Lattice option pricing model with the following assumptions: risk-free interest rate of 1.18%, expected dividend yield of 0%, expected term of 2 years using the simplified method and expected volatility of 117% based on historical volatility. The Company recorded the fair value of the unvested stock options, in the amount of $59,322, as deferred compensation which is being amortized over the vesting period. During the six months ended June 30, 2022, the Company amortized $23,540 of the deferred compensation which was recorded as compensation expenses in the accompanying condensed consolidated statement of operations. As of June 30, 2022, the deferred compensation related to his employment agreement had a balance of $35,782. Stock option activities for the six months ended June 30, 2022 are summarized as follows: Number of Weighted Average Weighted Average Aggregate Balance Outstanding, December 31, 2021 300,000 $ 0.0001 2.5 $ — Granted as incentives 342,466 $ 0.146 4.5 $ — Granted pursuant to employment agreement (see Note 8) 800,000 $ 0.2000 9.6 $ — Forfeited — — — — Balance Outstanding, June 30, 2022 1,442,466 $ 0.1500 7.5 $ — Exercisable, June 30, 2022 600,000 $ 0.1000 5.8 $ 6,030 Stock Warrants 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 year ended December 31, 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. Warrant activities for the six months ended June 30, 2022 are summarized as follows: Number of Weighted Average Weighted Average Aggregate Balance Outstanding, December 31, 2021 17,353,987 $ 0.31 4.1 $ — Granted/Forfeited — — — — Balance Outstanding, June 30, 2022 17,353,987 $ 0.31 3.6 $ — Exercisable, June 30, 2022 17,353,987 $ 0.31 3.6 $ — |
Concentrations
Concentrations | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 7 – CONCENTRATIONS Customer Concentration For the six months ended June 30, 2022 and 2021, no customer accounted for over 10% of total revenues from apparel sales included in discontinued operations. For the six months ended June 30, 2022 and 2021, one licensee accounted for 100% total revenues from customer license fee. Vendor Concentrations For the six months ended June 30, 2022 and 2021, one licensor accounted for 100% of the Company’s vendor license agreements (see below) related to the Company’s biopharmaceutical operation. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Employment Agreement Eric Weisblum On April 17, 2020, the Company entered into an employment agreement (“Employment Agreement”) with Eric Weisblum to 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. The Employment Agreement provided for a base salary of $120,000 and 7,630,949 of vested shares of the Company’s common stock in April 2020. In addition, Mr. Weisblum shall be eligible to earn a bonus, subject to the sole discretion of the Company’s Board of Directors (“Board”). The Employment Agreement may be terminated by either the Company or Mr. Weisblum at any time and for any reason upon 60 days prior written notice. Upon termination of the Employment Agreement, Mr. Weisblum 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 he may be entitled as of the termination date (collectively, the “Accrued Amounts”). Mr. Weisblum employment may also be terminated by the Company at any time, with cause, death or disability (as defined in the Employment Agreement). Upon the termination of the Employment Agreement for death or disability, Mr. Weisblum shall be entitled to receive the Accrued Amounts. The Employment Agreement also contains covenants prohibiting Mr. Weisblum from disclosing confidential information with respect to the Company. On January 18, 2021, the Company and Mr. Weisblum entered into the first amendment (the “Amendment”) to the Employment Agreement, effective as of January 1, 2021. Pursuant to the Amendment Mr. Weisblum’s base salary was increased from $120,000 per year to $180,000 per year and all the terms and provisions of the Employment Agreement shall remain in full force and effect. Dr. James Kuo On January 27, 2022, the Company and Dr. James Kuo entered into an employment agreement (“Kuo Employment Agreement”) for Dr. Kuo to serve as the Vice President of Research & Development. The Kuo Employment Agreement shall be effective as of the date of the agreement and shall automatically renew for a period of one year at every anniversary of the effective date, with the same terms and conditions, unless either party provides written notice of its intention not to extend the term of the Kuo Employment Agreement at least thirty days’ prior to the applicable renewal date. Dr. Kuo shall be paid an annual base salary of $30,000. For each twelve-month period of his employment, Dr. Kuo shall be entitled to a bonus whereby amount and terms shall be in the sole and absolute discretion of the Board of Directors (“Board”) and shall be payable at the Company’s sole option in stock or in cash. In addition, an aggregate of 800,000 incentive stock options were granted under the 2020 Plan to Dr. Kou, exercisable at $0.20 per share and expires on January 31, 2032. The stock options vest as follows: (i) 300,000 stock options upon issuance; (ii) 250,000 vests on October 31, 2022 and; (iii) 250,000 vests on October 31, 2023. The 800,000 stock options had a fair value of $94,914 which valued at grant date using Binomial Lattice option pricing model with the following assumptions: risk-free interest rate of 1.18%, expected dividend yield of 0%, expected term of 2 years using the simplified method and expected volatility of 117% based on calculated volatility. The Company recorded the fair value of the unvested stock options, in the amount of $59,322, as deferred compensation which is being amortized over the vesting period. During the six months ended June 30, 2022, the Company amortized $23,540 of the deferred compensation which was recorded as compensation expenses in the accompanying condensed consolidated statement of operations. As of June 30, 2022, the deferred compensation had a balance of $35,782 (see Note 6). License Agreements between the Company and Vendors University of Maryland, Baltimore - License Agreement for Development and Use of Central Nervous System-Homing Peptides Commercial Evaluation License and Option Agreement with the University of Maryland, Baltimore Effective as of July 15, 2020, the Company, through its wholly-owned subsidiary, Silo Pharma, Inc. (see Note 1) and University of Maryland, Baltimore (“UMB”) (collectively as “Parties”), entered into a commercial evaluation license and option agreement (“License Agreement”), granting 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. The License Agreement also granted the Company an exclusive option to negotiate and obtain an exclusive, sublicensable, royalty-bearing license (“Exclusive Option”) to with respect to the subject technology. The License Agreement had a term of six months from the effective date however if the Company exercises the Exclusive Option, the License Agreement shall expire at the end of the negotiation period (as defined in the License Agreement) or upon execution of a master license agreement, whichever occurs first. The Company exercised its Exclusive Option on January 13, 2021 and entered into a Master License Agreement on February 12, 2021. Both parties may terminate this agreement within thirty days by giving a written notice. In July 2020, the Company paid a license fee of $10,000 to UMB pursuant to the License 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. Master License Agreement with the University of Maryland, Baltimore As disclosed above, effective as of February 12, 2021, the Company and University of Maryland, Baltimore (“UMB”), entered into the Master License Agreement (“Master License Agreement”) which grants 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. 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. The Company may assign, sublicense, grant, or otherwise convey any rights or obligations under the Master License Agreement to a Company affiliate, without obtaining prior written consent from UMB provided that it meets the terms defined in the Master License Agreement. The Company may grant sublicenses of some or all of the rights granted by the Master License Agreement, provided that there is no uncured default or breach of any material term or condition under the Master License Agreement, by Company, at the time of the grant, and that the grant complies with the terms and conditions of the Master License Agreement. The Company shall be and shall remain responsible for the performance by each of the Company’s sublicensee. Any sublicense shall be consistent with and subject to the terms and conditions of the Master License Agreement and shall incorporate terms and conditions sufficient to enable Company to comply with the Master License Agreement. The Company or Company affiliates shall pay to UMB a percentage of all income received from its sublicensee as follows: (i) 25% of the Company’s 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 the Company’s 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. Pursuant to the Master License Agreement, the Company shall pay UMB; (i) a license fee, (ii) certain event-based milestone payments (see below for payment terms), (iii) royalty payments depending on net revenues (see below for payment terms), 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 effective date; and (b) $50,000 on or before the first anniversary of the 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 $25,000 license fee on February 17, 2021 which was recorded as prepaid expense and is being amortized over the 15-year term. The Company recognized amortization expense of $4,375 in 2021. During the six months ended June 30, 2022, the Company recognized amortization expense of $2,500. At December 31, 2021, prepaid expense and other current assets – current amounted $5,000 and prepaid expense – non-current amounts $15,625. At June 30, 2022, prepaid expense and other current assets – current amounted $5,000 and prepaid expense – non-current amounts $13,125 as reflected in the accompanying condensed consolidated balance sheets. Milestone Payment Terms Milestone Payment Filing of an Investigational New Drug (or any foreign equivalent) for a Licensed Product $ 50,000 Dosing of first patient in a Phase 1 Clinical Trial of a Licensed Product $ 100,000 Dosing of first patient in a Phase 2 Clinical Trial of a Licensed Product $ 250,000 Receipt of New Drug Application (“NDA”) (or foreign equivalent) approval for a Licensed Product $ 500,000 Achievement of First Commercial Sale of Licensed Product $ 1,000,000 Royalty Payments Terms (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 (iii) a minimum annual royalty payments, as follows: Years Minimum Annual Royalty Prior to First Commercial Sale $ N/A Year of First Commercial Sale $ N/A First calendar year following the First Commercial Sale $ 25,000 Second calendar year following the First Commercial Sale $ 25,000 Third calendar year following the First Commercial Sale $ 100,000 In April 2021, in connection with the Company’s Sublicense Agreement with Aikido Pharma Inc. (see below - Patent License Agreement with Aikido Pharma Inc. University of Maryland, Baltimore - License Agreement for Development and Use of Joint-Homing Peptides Commercial Evaluation License and Option Agreement with the University of Maryland, Baltimore Effective as of February 26, 2021, the Company, through its wholly-subsidiary, Silo Pharma, Inc., and University of Maryland, Baltimore (“UMB”) (collectively as “Parties”), entered into a commercial evaluation license and option agreement (“License Agreement”), which 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. The License Agreement also granted the Company an exclusive option to negotiate and obtain an exclusive, sublicensable, royalty-bearing license (“Exclusive Option”) to with respect to the subject technology. The License Agreement had a term of six months from the effective date. Both parties could have terminated the License Agreement within thirty days by giving a written notice. On July 6, 2021, the Company entered into a First Amendment Agreement (“First Amendment”) with UMB to extend the term of the original License Agreement by an additional six months such that the First Amendment was effective until February 25, 2022 however, if the Company exercises the Exclusive Option, the License Agreement shall expire at the end of the negotiation period (as defined in the License Agreement) or upon execution of a master license agreement, whichever occurs first. The Company paid a license fee of $10,000 to UMB in March 2021 pursuant to the License Agreement which was recorded in professional fees during the year ended December 31, 2021, since the Company could not conclude that such costs would be recoverable for this early-stage venture. On January 28, 2022, the Parties entered into a second amendment to the commercial evaluation and license agreement dated February 26, 2021 (“Second Amendment”). The Second Amendment extends the term of the original license agreement until December 31, 2022. However, if the Company exercises the Exclusive Option, the License Agreement shall expire at the end of the negotiation period (as defined in the License Agreement) or upon execution of a master license agreement, whichever occurs first. On June 30, 2022, the Parties entered into a third amendment to the commercial evaluation and license agreement dated February 26, 2021 (“Third Amendment”). The Third Amendment expands the scope of the license granted in the License Agreement to add additional patent rights with respect to an invention generally known as Peptide-Targeted Liposomal Delivery for Treatment Diagnosis, and Imaging of Diseases and Disorders License Agreements between the Company and Customer Customer Patent License Agreement with Aikido Pharma Inc. On January 5, 2021, the Company and its subsidiary Silo Pharma, Inc., a Florida corporation, entered into a patent license agreement (“License Agreement”) (collectively, the “Licensor”) and Aikido Pharma Inc. (“Aikido” or the “Customer”), as amended on April 12, 2021, pursuant to which the Licensor granted Aikido an exclusive, worldwide (“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 (“Field of Use”). The License 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 (“Right”) to certain UMB patent rights in the field of neuroinflammatory diseases occurring in patients diagnosed with cancer (“Field”). Pursuant to the License 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 License Agreement) in the Field of Use in the Territory. In addition, Aikido agreed to issue the Licensor 500 shares of Aikido’s 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 License Agreement (“Amended 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 License 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 License 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 as deferred revenue to be recognized as revenues over the 15 year term of the License 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 (“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. Prior to the April 12, 2021, issuance of the common stock in lieu of the Series M Convertible Preferred Stock as discussed above, 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 equity securities received) to be recognized as revenues over the 15-year term. The Company recognized revenue of $68,750 in 2021. During the six months ended June 30, 2022, the Company recognized revenue of $34,375. At December 31, 2021, deferred revenue – current portion amounted $68,750 and deferred revenue – long-term portion amounted $893,750. At June 30, 2022, deferred revenue – current portion amounted $68,750 and deferred revenue – long-term portion amounted $859,375 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. Customer 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 the Company (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 revenue of $2,514 in 2021. During the six months ended June 30, 2022, the Company recognized revenue of $1,676. At December 31, 2021, deferred revenue – current portion amounted $3,352 and deferred revenue – long-term portion amounted $44,134. At June 30, 2022, deferred revenue – current portion amounted $3,352 and deferred revenue – long-term portion amounted $42,458 as reflected in the accompanying condensed consolidated balance sheets. Sponsored Study and Research Agreements between the Company and Vendors Investigator-Sponsored Study Agreement with University of Maryland, Baltimore On January 5, 2021, the Company entered into an investigator-sponsored study agreement (“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. During the year ended December 31, 2021, the Company fully amortized the prepaid expense of $40,737. 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, second payment of $40,000 on September 9, 2021 and $20,570 on November 18, 2021, third payment of $60,570 on March 1, 2022, which were recorded to prepaid expense and other current assets – current to be amortized over the two-year period. In 2021, the Company amortized $92,855 of the prepaid expense. During the six months ended June 30, 2022, the Company amortized $68,285 of the prepaid expense leaving a prepaid asset of $0 at June 30, 2022. Sponsored Research Agreement with University of Maryland, Baltimore On July 6, 2021, the Company and University of Maryland, Baltimore (“UMB”) entered into a sponsored research agreement (“July 2021 Sponsored Research Agreement”) pursuant to which UMB shall evaluate the pharmacokinetics of dexamethasone delivered to arthritic rats via liposome. The research pursuant to the July 2021 Sponsored Research Agreement shall commence on September 1, 2021 and will continue until the substantial completion thereof, subject to renewal upon written consent of the parties. The July 2021 Sponsored Research Agreement may be terminated by either party upon 30 days’ prior written notice to the other party. In addition, if either party commits any material breach of or defaults with respect to any terms or conditions of the July 2021 Sponsored Research Agreement and fails to remedy such default or breach within 10 business days after written notice from the other party, the party giving notice may terminate the July 2021 Sponsored Research Agreement as of the date of receipt of such notice by the other party. If the Company terminates the July 2021 Sponsored Research Agreement for any reason other than an uncured material breach by UMB, the Company shall relinquish any and all rights it may have in the Results (as defined in the July 2021 Sponsored Research Agreement) to UMB. In addition, if the July 2021 Sponsored Research Agreement is terminated early, the Company, among other things, will pay all costs incurred and accrued by UMB as of the date of termination. 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 and was amortized during the year ended December 31, 2021. The Company paid the second payment of $50,000 on February 1, 2022 which was recorded as research and development expense in the accompanying condensed consolidated statement of operations. On June 7, 2022, the Company and UMB amended the July 2021 Sponsored Research Agreement whereby both parties agreed to make changes to the original project work and budget. The amendment had no effect on the consolidated financial statements. 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 which was recorded to prepaid expense and other current assets – current to be amortized over the estimated project timeline of twelve months. In 2021, the Company amortized $359,021 of the prepaid expense. During the six months ended June 30, 2022, the Company amortized the remaining prepaid expense of $71,804. As of June 30, 2022 and December 31, 2021, prepaid expense related to the sponsored research agreement were $0 and $71,804, respectively. Joint Venture Agreement with Zylö Therapeutics, Inc. On April 22, 2021 (“Effective Date”), the Company entered into a Joint Venture Agreement (“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 (“Joint Venture”), to, among other things, focus on the clinical development of ketamine using ZTI’s Z-pod™ technolog |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of consolidation | Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include financial statements for Silo Pharma, Inc and its inactive wholly-owned subsidiary with the same name as the parent entity, Silo Pharma, Inc, as of June 30, 2022 and during the three and nine months ended June 30, 2022. All intercompany balances and transactions have been eliminated in consolidation. 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 consolidated financial position and the consolidated 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, 2021 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2022. 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 NFID, LLC 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. |
Liquidity | Liquidity As reflected in the accompanying condensed consolidated financial statements, the Company generated a net loss of $1,262,474 and used cash in operations of $1,189,274 during the six months ended June 30, 2022. Additionally, the Company has an accumulated deficit of $4,525,051 at June 30, 2022. However, as of June 30, 2022, the Company had working capital of $8,678,540. The positive worthy capital serves to mitigate the conditions that historically raised substantial doubt about the Company’s ability to continue as a going concern. The Company believes that the Company has sufficient cash to meet its obligations for a minimum of twelve months from the date of this filing. |
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 six months ended June 30, 2022 and year ended December 31, 2021 include the collectability of notes receivable, valuation of 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 June 30, 2022 and December 31, 2021, the Company had cash in excess of FDIC limits of approximately $8,240,000, and approximately $9,100,000, 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 $99,939 and $145,324 at June 30, 2022 and December 31, 2021, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses and other current assets – non-current of $33,740 and $26,659 at June 30, 2022 and December 31, 2021, 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 8). 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 8). 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 June 30, 2022 and December 31, 2021 that would require either recognition or disclosure in the accompanying condensed consolidated financial statements. |
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 six months ended June 30, 2022 and 2021, research and development costs were $275,955 and $147,448, respectively. During the three months ended June 30, 2022 and 2021, research and development costs were $105,676 and $98,846, respectively. |
Net Loss per Common Share | Net 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 six months ended June 30, 2022 and 2021: June 30, 2022 2021 Series C convertible preferred stock — 756,667 Stock options 1,442,466 300,000 Warrants 17,353,987 17,353,987 18,796,453 18,410,654 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06— Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and edging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) Debt with Conversion and Other Options 1. Add a disclosure objective 2. Add information about events or conditions that occur during the reporting period that cause conversion contingencies to be met or conversion terms to be significantly changed 3. Add information on which party controls the conversion rights 4. Align disclosure requirements for contingently convertible instruments with disclosure requirements for other convertible instruments 5. Require that existing fair value disclosures in Topic 825, Financial Instruments, be provided at the individual convertible instrument level rather than in the aggregate. Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, amendments in ASU 2020-06 added disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital. The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of its annual fiscal year and are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. If an entity elects the fully retrospective method of transition, the cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. The Company adopted ASU 2020-06 during the three months ended March 31, 2022 and it did not have material impact on its condensed consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2020-06 during the three months ended March 31, 2022 and did not have material impact on its condensed consolidated financial statements Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company’s consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of anti-dilutive net loss per share | June 30, 2022 2021 Series C convertible preferred stock — 756,667 Stock options 1,442,466 300,000 Warrants 17,353,987 17,353,987 18,796,453 18,410,654 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | At June 30, 2022 At December 31, 2021 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Equity investments consisting of common stock, at fair value $ 113,012 $ — $ — $ 419,995 — $ — |
Schedule of activity in the company’s equity investments, at fair value | June 30, December 31, Balance, beginning $ 419,995 $ — Additions 85,733 531,250 Sales at original cost (171,407 ) (359,843 ) Unrealized (loss) gain (221,309 ) 248,588 Balance as of June 30, 2022 $ 113,012 $ 419,995 |
Disposal of the Discontinued _2
Disposal of the Discontinued Operations of the NFID Business (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 $ — Net asset of NFID business disposed $ 58,447 Consideration in the form of a note receivable (60,000 ) Gain from sale of NFID business $ (1,553 ) |
Schedule of operating result of discontinued operations of the NFID business | For the Six Months Ended June 30, 2022 2021 Product sales, net $ — $ 80,305 Cost of sales 1,079 68,360 Gross profit (loss) (1,079 ) 11,945 Total operating and other non-operating expenses (84 ) (152,095 ) Loss from discontinued operations $ (1,163 ) $ (140,150 ) |
Notes Receivable (Tables)
Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Schedule of notes receivable net | June 30, December 31, Principal amounts of notes receivable $ 115,500 $ 220,000 Additional notes receivable — 60,000 Collections on notes receivables (20,000 ) (164,500 ) Less: allowance for doubtful accounts (35,500 ) (55,500 ) Total Notes receivable, net 60,000 60,000 Less: notes receivable, net – current portion — — Notes receivable – non-current $ 60,000 $ 60,000 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock options activities | Number of Weighted Average Weighted Average Aggregate Balance Outstanding, December 31, 2021 300,000 $ 0.0001 2.5 $ — Granted as incentives 342,466 $ 0.146 4.5 $ — Granted pursuant to employment agreement (see Note 8) 800,000 $ 0.2000 9.6 $ — Forfeited — — — — Balance Outstanding, June 30, 2022 1,442,466 $ 0.1500 7.5 $ — Exercisable, June 30, 2022 600,000 $ 0.1000 5.8 $ 6,030 |
Schedule of warrant activities | Number of Weighted Average Weighted Average Aggregate Balance Outstanding, December 31, 2021 17,353,987 $ 0.31 4.1 $ — Granted/Forfeited — — — — Balance Outstanding, June 30, 2022 17,353,987 $ 0.31 3.6 $ — Exercisable, June 30, 2022 17,353,987 $ 0.31 3.6 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of milestone payments | Milestone Payment Filing of an Investigational New Drug (or any foreign equivalent) for a Licensed Product $ 50,000 Dosing of first patient in a Phase 1 Clinical Trial of a Licensed Product $ 100,000 Dosing of first patient in a Phase 2 Clinical Trial of a Licensed Product $ 250,000 Receipt of New Drug Application (“NDA”) (or foreign equivalent) approval for a Licensed Product $ 500,000 Achievement of First Commercial Sale of Licensed Product $ 1,000,000 |
Schedule of UMB minimum royalty payments | Years Minimum Annual Royalty Prior to First Commercial Sale $ N/A Year of First Commercial Sale $ N/A First calendar year following the First Commercial Sale $ 25,000 Second calendar year following the First Commercial Sale $ 25,000 Third calendar year following the First Commercial Sale $ 100,000 |
Schedule of shall pay UMB fees | 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) | 6 Months Ended |
Jun. 30, 2022 | |
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 $60,000. The promissory note bears 8% interest per annum and matures on October 1, 2023. Accordingly, the results of operations of this component, for all periods presented, are separately reported as “discontinued operations” on the condensed consolidated statements of operations (see Note 4). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||||
Net loss | $ 1,262,474 | ||||
Cash in operations | 1,189,274 | ||||
Accumulated deficit | $ 4,525,051 | 4,525,051 | |||
Working capital | 8,678,540 | 8,678,540 | |||
Federal deposit insurance corporation | 250,000 | 250,000 | |||
Securities investor protection corporation | 250,000 | 250,000 | |||
FDIC cash limits | 8,240,000 | $ 9,100,000 | |||
Prepaid expenses and other current assets | 99,939 | 99,939 | 145,324 | ||
Prepaid expenses and other current assets – non-current | 33,740 | 33,740 | 26,659 | ||
Research and development cost | $ 105,676 | $ 98,846 | $ 275,955 | $ 147,448 | $ 147,448 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive net loss per share [Line Items] | ||
Anti-dilutive net loss per share | 18,796,453 | 18,410,654 |
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 | 1,442,466 | 300,000 |
Warrants [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 | 17,353,987 |
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 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments and Fair Value Measurements (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) [Line Items] | |
Common stock grant date fair value | $ 85,733 |
Common stock grant date fair value per share (in Dollars per share) | $ / shares | $ 1.1 |
Home Bistro, Inc. [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) [Line Items] | |
Company received shares (in Shares) | shares | 77,939 |
Aikido Pharma, Inc. [Member] | |
Fair Value of Financial Instruments and Fair Value Measurements (Details) [Line Items] | |
Equity investment Sold | $ 171,407 |
Gross proceeds | 66,707 |
Equity investments amount | $ 104,700 |
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 on a recurring basis - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Level 1 [Member] | ||
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value on a recurring basis [Line Items] | ||
Equity investments consisting of common stock, at fair value | $ 113,012 | $ 419,995 |
Level 2 [Member] | ||
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value on a recurring basis [Line Items] | ||
Equity investments consisting of common stock, at fair value | ||
Level 3 [Member] | ||
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of assets and liabilities measured at fair value on a recurring basis [Line Items] | ||
Equity investments consisting of common stock, at fair value |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments and Fair Value Measurements (Details) - Schedule of activity in the company’s equity investments, at fair value - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Schedule of activity in the company’s equity investments, at fair value [Abstract] | ||
Beginning balance | $ 419,995 | |
Additions | 85,733 | 531,250 |
Sales at original cost | (171,407) | (359,843) |
Unrealized (loss) gain | (221,309) | 248,588 |
Ending balance | $ 113,012 | $ 419,995 |
Disposal of the Discontinued _3
Disposal of the Discontinued Operations of the NFID Business (Details) | 1 Months Ended |
Sep. 30, 2021 USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |
Purchase price | $ 60,000 |
Promissory Notes | $ 60,000 |
Bearing interest rate percentage | 8% |
Maturity date | Oct. 01, 2023 |
Note receivable - non current | $ 60,000 |
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 | 1 Months Ended |
Sep. 30, 2021 USD ($) | |
Current assets: | |
Inventory, net | $ 58,447 |
Total assets | 58,447 |
Current liabilities: | |
Total liabilities | |
Net asset of NFID business disposed | 58,447 |
Consideration in the form of a note receivable | (60,000) |
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 ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule of operating result of discontinued operations of the NFID business [Abstract] | ||
Product sales, net | $ 80,305 | |
Cost of sales | 1,079 | 68,360 |
Gross profit (loss) | (1,079) | 11,945 |
Total operating and other non-operating expenses | (84) | (152,095) |
Loss from discontinued operations | $ (1,163) | $ (140,150) |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 07, 2021 | Nov. 02, 2018 | Sep. 30, 2021 | Dec. 31, 2020 | Apr. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | Oct. 31, 2018 | Sep. 30, 2018 | Sep. 28, 2018 | |
Notes Receivable (Details) [Line Items] | ||||||||||||
Maturity date | Sep. 27, 2020 | |||||||||||
Principal balance | $ 60,000 | $ 60,000 | ||||||||||
Promissory note agreement note deposit and credit towards acquisition | $ 50,000 | |||||||||||
Interest rate per annum percentage | 10% | |||||||||||
Increased interest rate per annum | 18% | |||||||||||
Received shares (in Shares) | 10,420 | |||||||||||
Aggregate of notes receivable purchase price | $ 30,000 | |||||||||||
Interest receivable | $ 3,590 | 1,210 | ||||||||||
Recovered aggregate bad debt | 7,500 | |||||||||||
Received payment | 23,500 | |||||||||||
Recovered bad debt | 141,000 | |||||||||||
Bad debt allowance | 196,500 | |||||||||||
Bad debt recovery cash payment, description | 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. | |||||||||||
Remains collectible settlement agreement | 20,000 | |||||||||||
Remains collectible settlement agreement amount reserved | 35,500 | |||||||||||
Promissory note interest | 8% | |||||||||||
Maturity date | Oct. 01, 2023 | |||||||||||
Total receivable | $ 63,590 | $ 61,210 | ||||||||||
Six-monthly installments [Member] | ||||||||||||
Notes Receivable (Details) [Line Items] | ||||||||||||
Aggregate purchase price | $ 277,305 | |||||||||||
Purchase Agreement [Member] | ||||||||||||
Notes Receivable (Details) [Line Items] | ||||||||||||
Principal balance | $ 146,500 | |||||||||||
Allowance for doubtful account and bad debt | 174,376 | |||||||||||
Aggregate purchase price | $ 277,305 | |||||||||||
Aggregate of notes receivable purchase price | 30,000 | |||||||||||
Interest receivable | $ 27,876 | |||||||||||
Promissory Note Receivable Agreement [Member] | ||||||||||||
Notes Receivable (Details) [Line Items] | ||||||||||||
Principal balance | $ 100,000 | $ 100,000 | $ 200,000 | |||||||||
Accrued interest rate | 6% | |||||||||||
Principal balance | $ 50,000 | |||||||||||
Allowance for doubtful account and bad debt | $ 50,000 |
Notes Receivable (Details) - Sc
Notes Receivable (Details) - Schedule of notes receivable net - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of notes receivable net [Abstract] | ||
Principal amounts of notes receivable | $ 115,500 | $ 220,000 |
Additional notes receivable | 60,000 | |
Collections on notes receivables | (20,000) | (164,500) |
Less: allowance for doubtful accounts | (35,500) | (55,500) |
Total Notes receivable, net | 60,000 | 60,000 |
Less: notes receivable, net – current portion | ||
Notes receivable – non-current | $ 60,000 | $ 60,000 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Feb. 09, 2021 | Mar. 31, 2022 | Jan. 31, 2022 | Dec. 29, 2021 | Jan. 18, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Nov. 30, 2019 | Apr. 30, 2013 | |
Stockholders’ Equity (Details) [Line Items] | |||||||||
Shares authorized | 505,000,000 | ||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Warrants term | 5 years | ||||||||
Exercise price (in Dollars per share) | $ 0.3 | ||||||||
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. | ||||||||
Subsequent financing, percentage | 50% | ||||||||
Liquidity damage, description | If the Company fails to file the Registration Statement or have it declared effective by the dates set forth above, amongst other things, the Company will be obligated to pay the investors damages in the amount of 1% of their subscription amount, per month, until such events are satisfied. | ||||||||
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. | ||||||||
Expired term | Dec. 26, 2026 | ||||||||
Employment agreement, description | pursuant to an Employment Agreement (see Note 8), an aggregate of 800,000 incentive stock options were issued under the 2020 Plan, to Dr. Kou, exercisable at $0.20 per share and expires on January 31, 2032. The stock options vest as follows: (i) 300,000 stock options upon issuance; (ii) 250,000 vests on October 31, 2022 and; (iii) 250,000 vests on October 31, 2023. | ||||||||
Deferred compensation balance (in Dollars) | $ 35,782 | ||||||||
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. | ||||||||
Placement Agent Warrants [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Risk free interest rate | 0.50% | ||||||||
Expected dividend yield | 0% | ||||||||
Expected term | 5 years | ||||||||
Expected volatility | 169% | ||||||||
Aggregate grant date fair value of placement agent warrants (in Dollars) | $ 1,106,000 | ||||||||
Warrant [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Warrants term | 5 years | ||||||||
Exercise price (in Dollars per share) | $ 0.2 | ||||||||
Risk free interest rate | 0.46% | ||||||||
Expected term | 5 years | ||||||||
Expected volatility | 169% | ||||||||
Stock-based Compensation (in Dollars) | $ 83,728 | ||||||||
Granted warrants to purchase shares | 250,000 | ||||||||
Grant date price per warrant (in Dollars per share) | $ 0.33 | ||||||||
Warrant value (in Dollars) | $ 83,728 | ||||||||
Stock price (in Dollars per share) | $ 0.35 | ||||||||
Series A Preferred Stock [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Designated shares of preferred stock | 1,000,000 | ||||||||
Share issued | 0 | ||||||||
Share outstanding | 0 | ||||||||
Series B Convertible Preferred Stock [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Preferred stock, shares authorized | 2,000 | 2,000 | |||||||
Designated shares of preferred stock | 2,000 | ||||||||
Share issued | |||||||||
Share outstanding | |||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Series C Convertible Preferred Stock [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Designated shares of preferred stock | 4,280 | 4,280 | |||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | ||||||||
Preferred stock, stated value (in Dollars) | $ 1,000 | ||||||||
Convertible preferred stock, 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%. | ||||||||
Deemed dividend (in Dollars) | $ 1,403,997 | ||||||||
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] | |||||||||
Sale of aggregate shares | 4,276 | ||||||||
Warrant to purchase shares | 14,253,323 | ||||||||
Gross proceeds (in Dollars) | $ 4,276,000 | ||||||||
Offering expenses (in Dollars) | $ 481,898 | ||||||||
Series C Preferred Stock [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Preferred stock, shares authorized | 4,280 | 4,280 | |||||||
Share issued | 0 | 227 | |||||||
Share outstanding | 0 | 227 | |||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Converted preferred stock | 227 | ||||||||
Convertible common stock | 758,334 | ||||||||
Board Granted [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Exercise price (in Dollars per share) | $ 0.146 | ||||||||
Risk free interest rate | 0.75% | ||||||||
Expected term | 2 years | ||||||||
Expected volatility | 0% | ||||||||
Aggregate of incentive stock options | 342,466 | ||||||||
Stock option value (in Dollars) | $ 30,224 | ||||||||
Expected volatility | 115% | ||||||||
Fair value of unvested stock option | 30,224 | ||||||||
Fair value of the unvested stock options (in Dollars) | $ 15,122 | ||||||||
Issuance of deferred compensation balance (in Dollars) | $ 15,122 | ||||||||
Omnibus Equity incentive Plan [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Shares of common stock reserved and avail for issuance | 8,500,000 | ||||||||
Incentive Stock Option [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Risk free interest rate | 1.18% | ||||||||
Expected dividend yield | 0% | ||||||||
Expected term | 2 years | ||||||||
Expected volatility | 117% | ||||||||
Fair value of the unvested stock options (in Dollars) | $ 59,322 | ||||||||
Stock option | 800,000 | ||||||||
Fair value of stock option (in Dollars) | $ 94,915 | ||||||||
Stock-based Compensation (in Dollars) | $ 23,540 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of stock options activities - Stock Options [Member] | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Stockholders’ Equity (Details) - Schedule of stock options activities [Line Items] | |
Number of Options, beginning balance outstanding | shares | 300,000 |
Weighted Average Exercise Price, balance beginning | $ / shares | $ 0.0001 |
Weighted Average Remaining Contractual Term (Years), balance beginning | 2 years 6 months |
Aggregate Intrinsic Value, balance beginning | $ | |
Granted as incentives, Number of Options | shares | 342,466 |
Granted as incentives, Weighted Average Exercise Price | $ / shares | $ 0.146 |
Granted as incentives, Weighted Average Remaining Contractual Term (Years) | 4 years 6 months |
Granted as incentives, Aggregate Intrinsic Value | $ | |
Granted pursuant to employment agreement, Number of Options | shares | 800,000 |
Granted pursuant to employment agreement, Weighted Average Exercise Price | $ / shares | $ 0.2 |
Granted pursuant to employment agreement, Weighted Average Remaining Contractual Term (Years) | 9 years 7 months 6 days |
Granted pursuant to employment agreement, Aggregate Intrinsic Value | $ | |
Number of Options, Forfeited | shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Remaining Contractual Term (Years), Forfeited | |
Aggregate Intrinsic Value, Forfeited | $ | |
Number of Options, balance ending | shares | 1,442,466 |
Weighted Average Exercise Price, balance ending | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Term (Years), balance ending | 7 years 6 months |
Aggregate Intrinsic Value, balance ending | $ | |
Number of Options, Exercisable, | shares | 600,000 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.1 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 5 years 9 months 18 days |
Aggregate Intrinsic Value, Exercisable | $ | $ 6,030 |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of warrant activities - Warrants [Member] | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Number of Warrants, beginning balance | shares | 17,353,987 |
Weighted Average Exercise Price, beginning balance | $ / shares | $ 0.31 |
Weighted Average Remaining Contractual Term (Years), beginning balance | 4 years 1 month 6 days |
Aggregate Intrinsic Value, beginning balance | $ | |
Granted/Forfeited, Number of Warrants | shares | |
Granted/Forfeited, Weighted Average Exercise Price | $ / shares | |
Granted/Forfeited, Weighted Average Remaining Contractual Term (Years) | |
Granted/Forfeited, Aggregate Intrinsic Value | $ | |
Number of Warrants, ending balance | shares | 17,353,987 |
Weighted Average Exercise Price, ending balance | $ / shares | $ 0.31 |
Weighted Average Remaining Contractual Term (Years), ending balance | 3 years 7 months 6 days |
Aggregate Intrinsic Value, ending balance | $ | |
Number of Warrants, Exercisable | shares | 17,353,987 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.31 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 3 years 7 months 6 days |
Aggregate Intrinsic Value, Exercisable | $ |
Concentrations (Details)
Concentrations (Details) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
One Licensee [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 100% | |
Customer Concentration Risk [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 10% | |
Customer Concentration Risk [Member] | One Licensee [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 100% | |
Vendor Concentrations [Member] | One Licensor [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 100% | 100% |
Customer Concentration Risk [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 10% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Sep. 01, 2021 | Jul. 06, 2021 | Jun. 01, 2021 | Jan. 05, 2021 | Jan. 27, 2022 | Apr. 30, 2021 | Jul. 31, 2020 | Apr. 17, 2020 | Jun. 30, 2022 | Dec. 31, 2021 | Feb. 01, 2022 | |
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Employment agreement, description | The Employment Agreement provided for a base salary of $120,000 and 7,630,949 of vested shares of the Company’s common stock in April 2020. In addition, Mr. Weisblum shall be eligible to earn a bonus, subject to the sole discretion of the Company’s Board of Directors (“Board”). | ||||||||||
Deferred compensation balance | $ 35,782 | ||||||||||
License fee | $ 10,000 | $ 10,000 | |||||||||
Commercial sale term | 10 years | ||||||||||
License agreement expire | 15 years | ||||||||||
Sublicense income, description | The Company or Company affiliates shall pay to UMB a percentage of all income received from its sublicensee as follows: (i) 25% of the Company’s 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 the Company’s 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. | ||||||||||
License agreement, description | the Company shall pay UMB; (i) a license fee, (ii) certain event-based milestone payments (see below for payment terms), (iii) royalty payments depending on net revenues (see below for payment terms), 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 effective date; and (b) $50,000 on or before the first anniversary of the 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 $25,000 license fee on February 17, 2021 which was recorded as prepaid expense and is being amortized over the 15-year term. The Company recognized amortization expense of $4,375 in 2021. During the six months ended June 30, 2022, the Company recognized amortization expense of $2,500. At December 31, 2021, prepaid expense and other current assets – current amounted $5,000 and prepaid expense – non-current amounts $15,625. At June 30, 2022, prepaid expense and other current assets – current amounted $5,000 and prepaid expense – non-current amounts $13,125 as reflected in the accompanying condensed consolidated balance sheets. | ||||||||||
Royalty payments, description | Royalty Payments Terms: (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 | ||||||||||
Prepaid expense and other current assets | $ 838 | $ 838 | |||||||||
Prepaid expenses non-current | 10,615 | $ 11,034 | |||||||||
Non refundable fees | 2,500 | ||||||||||
Non-refundable cash payment | $ 500,000 | $ 500,000 | |||||||||
Net sale percentage | 2% | ||||||||||
Licensor share (in Shares) | 500 | 500 | |||||||||
Aggregate of converted shares (in Shares) | 625,000 | 625,000 | |||||||||
Revenue term | 15 years | 15 years | |||||||||
Number of voting shares (in Shares) | 20,000 | ||||||||||
Reverse stock split vote, description | (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.Prior to the April 12, 2021, issuance of the common stock in lieu of the Series M Convertible Preferred Stock as discussed above, 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 | ||||||||||
Cash received | 500,000 | ||||||||||
Securities received | 531,250 | ||||||||||
Recognized revenues | 34,375 | $ 68,750 | |||||||||
Deferred revenue current portion | 68,750 | 68,750 | |||||||||
Deferred revenue long-term portion | 42,458 | $ 893,750 | |||||||||
Revenue long term portion amounts | $ 859,375 | ||||||||||
Consideration fee payable percentage | 110% | ||||||||||
Upfront license fees | $ 50,000 | $ 50,000 | |||||||||
First commercial sale | 10 years | ||||||||||
Agreement shall expire | 15 years | ||||||||||
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. During the year ended December 31, 2021, the Company fully amortized the prepaid expense of $40,737. | ||||||||||
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, second payment of $40,000 on September 9, 2021 and $20,570 on November 18, 2021, third payment of $60,570 on March 1, 2022, which were recorded to prepaid expense and other current assets – current to be amortized over the two-year period. In 2021, the Company amortized $92,855 of the prepaid expense. During the six months ended June 30, 2022, the Company amortized $68,285 of the prepaid expense leaving a prepaid asset of $0 at June 30, 2022. | ||||||||||
Company paid cash | $ 92,095 | ||||||||||
Company paid second payment | $ 50,000 | ||||||||||
Payment of university | $ 5,000 | ||||||||||
Agreement, description | the Company paid $5,000 related to this agreement. During the six months ended June 30, 2022, the Company paid $10,000 related to this agreement. | ||||||||||
Minimum [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Salary was increased | 120,000 | ||||||||||
Maximum [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Salary was increased | 180,000 | ||||||||||
Sublicense Agreement [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Sublicense income, percentage | 25% | ||||||||||
Sublicense agreement amount paid | $ 12,500 | ||||||||||
Recognized amortization expenses | $ 628 | ||||||||||
Amortization expense | 419 | ||||||||||
Deferred revenue current portion | 3,352 | ||||||||||
Recognized revenues | 1,676 | 2,514 | |||||||||
Master License Agreement [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Upfront license fees | $ 1,900,000 | ||||||||||
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. | ||||||||||
Dr. James Kuo [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Employment agreement, description | James Kuo entered into an employment agreement (“Kuo Employment Agreement”) for Dr. Kuo to serve as the Vice President of Research & Development. The Kuo Employment Agreement shall be effective as of the date of the agreement and shall automatically renew for a period of one year at every anniversary of the effective date, with the same terms and conditions, unless either party provides written notice of its intention not to extend the term of the Kuo Employment Agreement at least thirty days’ prior to the applicable renewal date. Dr. Kuo shall be paid an annual base salary of $30,000. For each twelve-month period of his employment, Dr. Kuo shall be entitled to a bonus whereby amount and terms shall be in the sole and absolute discretion of the Board of Directors (“Board”) and shall be payable at the Company’s sole option in stock or in cash. In addition, an aggregate of 800,000 incentive stock options were granted under the 2020 Plan to Dr. Kou, exercisable at $0.20 per share and expires on January 31, 2032. The stock options vest as follows: (i) 300,000 stock options upon issuance; (ii) 250,000 vests on October 31, 2022 and; (iii) 250,000 vests on October 31, 2023. | ||||||||||
Stock option (in Shares) | 800,000 | ||||||||||
Fair value of stock option | $ 94,914 | ||||||||||
Risk free interest rate | 1.18% | ||||||||||
Expected dividend yield | 0% | ||||||||||
Expected term | 2 years | ||||||||||
Expected volatility | 117% | ||||||||||
Fair value of the unvested stock option | $ 59,322 | ||||||||||
Stock-based Compensation | 23,540 | ||||||||||
Deferred compensation balance | $ 35,782 | ||||||||||
Aikido [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Deferred revenue current portion | 3,352 | ||||||||||
Deferred revenue long-term portion | $ 44,134 | ||||||||||
Columbia University [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Sponsored research agreement, description | 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 which was recorded to prepaid expense and other current assets – current to be amortized over the estimated project timeline of twelve months. In 2021, the Company amortized $359,021 of the prepaid expense. During the six months ended June 30, 2022, the Company amortized the remaining prepaid expense of $71,804. As of June 30, 2022 and December 31, 2021, prepaid expense related to the sponsored research agreement were $0 and $71,804, respectively. |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of milestone payments | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Payment One [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Milestone | Filing of an Investigational New Drug (or any foreign equivalent) for a Licensed Product |
Payment | $ 50,000 |
Payment Two [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Milestone | Dosing of first patient in a Phase 1 Clinical Trial of a Licensed Product |
Payment | $ 100,000 |
Payment Three [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Milestone | Dosing of first patient in a Phase 2 Clinical Trial of a Licensed Product |
Payment | $ 250,000 |
Payment Four [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Milestone | Receipt of New Drug Application (“NDA”) (or foreign equivalent) approval for a Licensed Product |
Payment | $ 500,000 |
Payment Five [Member] | |
Commitments and Contingencies (Details) - Schedule of milestone payments [Line Items] | |
Milestone | Achievement of First Commercial Sale of Licensed Product |
Payment | $ 1,000,000 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Payment One [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Years | Prior to First Commercial Sale |
Minimum Annual Royalty | |
Payment Two [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Years | Year of First Commercial Sale |
Minimum Annual Royalty | |
Payment Three [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Years | First calendar year following the First Commercial Sale |
Minimum Annual Royalty | $ 25,000 |
Payment Four [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Years | Second calendar year following the First Commercial Sale |
Minimum Annual Royalty | $ 25,000 |
Payment Five [Member] | |
Commitments and Contingencies (Details) - Schedule of UMB minimum royalty payments [Line Items] | |
Years | Third calendar year following the First Commercial Sale |
Minimum Annual Royalty | $ 100,000 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of shall pay UMB fees | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Payment One [Member] | |
Commitments and Contingencies (Details) - Schedule of shall pay UMB fees [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 fees [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 fees [Line Items] | |
Payment | $ 92,095 |
Payment description | Upon completion of the project work as outlined in the July 2021 Sponsored Research Agreement |